In this final installment of our Treasury Services Expert Conversation, Mark Ridley, Regional Head of Relationship Management for North America Financial Institutions, focused on trade document outsourcing solutions. Earlier in the series, we focused on broad treasury management services and foreign exchange.
What outsourced trade services does BNY Mellon offer to financial institutions?
Ridley: We have a wide range of products and capabilities to support our clients' needs in the trade space, from the basic requirements to a full outsourcing or white label arrangement. Typical services include traditional letter of credit (LC) advising services. Our Asia-Pacific programs include LC relay and reissuance services, which allow a U.S. regional bank to consolidate its MT 700 flow via a single partner, and standalone document examination services where a bank can electronically send import/export document images to BNY Mellon for review.
For a number of our clients, we provide end-to-end solutions for both importer and exporter needs. Other banks pick and choose the products most relevant to them, such as reimbursement services, open account solutions and government programs. Across all of these, our web based portal makes doing trade transactions with us very easy.
What are we offering that helps reduce the friction and streamline cross-border activities?
Ridley: Consolidation of LC flows reduces overall cost, because volume can dictate the fee structure. By acting as a U.S. regional bank's agent on the ground, particularly in Asia, we can offer an enhanced level of customer service. Where we are in the same country as the beneficiary, that definitely also helps expedite the LC turnaround time.
We can also provide in-depth guidance with key challenges in the trade industry such Anti-Money Laundering provisions, Know Your Customer requirements, and OFAC checking to ensure that clients stay on the right side of compliance in a timely manner that facilitates smooth cross-border trade activity.
Why wouldn't a financial institution simply develop its own expertise in the trade documents?
Ridley: Trade services personnel have to be highly skilled, since errors can be significantly costly. U.S. institutions' needs range from already having the expertise to having none at all.
In some cases, there's an aging workforce. Encouraging younger people to become document checkers, for example, is not easy, and attracting money-center based professionals to relocate to remote parts of the U.S. can be expensive.
In other cases, there are banks under pressure to reduce expenses. They seek outsourcing in order to reduce headcount and cost, or in order to redeploy personnel.
For those institutions without robust significant trade service offerings currently, the answer is simple. It’s not always cost effective to buy a third party trade platform or to hire expensive personnel.
How is the trade documentation arena evolving? Are there technical innovations? Are client needs changing?
Ridley: One of the most important areas of development is technology and digitization. Demand for faster delivery and access to information is prevalent. Therefore, banks’ end client needs are changing as they look for transparency in the supply chain process and for easy ways to initiate trade transactions.
At BNY Mellon, we build these innovations on our cloud-based platform. It allows clients to execute and view transactions across multiple devices, and use APIs for plug and play integration between our systems and theirs. This allows for real-time data exchanges and can reduce implementation costs. It further allows for more customized dashboard tools that provide data analytics. These capabilities speak to the cost and speed advantages of outsourcing trade document capabilities to BNY Mellon. Outsourcing reduces cost, and increases our clients’ ability to respond quickly to a changing workforce and technical environment.
For further detail, please visit our website.
Media Contact:
Peter Gau
+1 212 815 2754
peter.gau@bnymellon.com