Published: September 8, 2016
Providing services across borders presents a major challenge to transaction banks operating in the EMEA region – particularly when it comes to complying with local market regulations. Liz Salecka examines why partnering with a local bank represents one of the best ways to address these issues.
Large transactional banks operating across borders in the EMEA region face numerous challenges when managing trade transactions and making payments and collections. These complexities range from having to deal with major variations in regional and individual country regulations to managing different standards and practices. As one would expect, language and cultural issues can present problems as well.
“Transacting cross-border business is far more complex than transacting domestically, presenting significant strategic and operational challenges,” says Dominic Broom, head of treasury services EMEA, BNY Mellon. “Faced with the rapidly shifting financial environment in areas such as regulation; technological innovation; the emergence of non-bank payment providers; and evolving client needs; there are ever-more challenges for banks to address.”
Banks wanting to compete internationally need to be consistently investing in systems and people. Paul Thwaite, head of transaction services, RBS highlights that both strategic and practical considerations need to be considered when initiating cross-border business.
“At a macro level, we are looking to support our customers across international borders in an efficient and transparent way, and one of the most relevant issues here is regulation, which can be country specific or broader,” he says, identifying Know Your Customer (KYC) regulation and complying with sanction regimes, as typical of the regulations that banks operating across borders must be constantly up-to-date on.
“As we reach out further into other jurisdictions, different legal frameworks kick in and this is particularly the case in trade finance. For example, there may be local legislation or requirements with respect to documentation.”