| Spring 2010 |
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Build on Best Practices to Expand Globally
Every US corporation is somewhere along the global expansion continuum. Some are just starting out; they may be manufacturing a product or offering a service locally and beginning to consider the possibility of expanding into new markets. Others are farther along the continuum — in some cases, not only exporting their product or service to multiple countries, but also establishing local operations in one or several of those countries. Some have expanded into developed markets, while others have forged ahead into emerging markets. Large US corporations are looking to grow and enter new markets. They are looking at "going global" these days, to one extent or another. To facilitate global expansion in today's market, lean corporate treasury departments are being asked to pursue cost reduction, greater efficiency and better risk management. They're investing in centralization, standardization and automation — more specifically, in tools and structures such as enterprise resource planning (ERP) systems, treasury workstations, in-house banks and shared services centers. Deutsche Bank is committed to providing our clients with the support their global expansion requires. Not only do we have the products to help companies go global and support these tools and structures, but we also understand what it means to walk a few hundred thousand miles in their shoes. Why? Because many of our clients have already set out on the path to global expansion and we have been right by their side. Expanding Our Global Branch Network We've learned that the best way to proceed efficiently with our expansion plans is to develop and refine best practices and processes along the way. As you expand, it's important to note what you're doing well in markets where you are entrenched, and apply those best practices when you enter new markets. The goal is to do it just a little bit better each time. Support for Your Best Practices One heightened opportunity is in the export arena where the US government, as part of President Obama's National Export Initiative, has pledged to offer new trade finance programs and stronger support for US exports. The administration has stated a goal of doubling US exports in the next five years. Yet, this initiative comes at a time when exporters are increasingly concerned about foreign buyer risk. In this edition of TreasuryPulse, Deutsche Bank's trade finance expert, John Baranello, describes the resurgent role of the letter of credit in mitigating buyer and foreign bank risk. He also discusses the need for exporters to address another major challenge — trade regulation compliance. Another article looks at the challenges that globally expanding companies face as they seek to centralize payments, particularly cross-border, cross-currency payments, and describes how Deutsche Bank's FX4Cash global cross-currency payments solution can help. Finally, we offer an update on adoption of the Single Euro Payments Area (SEPA) payment instruments — the 2-year-old SEPA Credit Transfer and its just over 6-month-old sibling, the SEPA Direct Debit. Adoption of these instruments to date has been slow, for reasons our story explains. However, the article also outlines why it's probably only a matter of time before all companies operating in Europe will need to use these instruments, and why they should be working with Deutsche Bank today to leverage SEPA to create a more efficient bank account structure.
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By Patrick Rittendale
Current Trends and Practices in Trade Finance