In a survey of treasurers who deal with LatAm, footprint and coverage were most important.
More than capabilities or global relationship, treasurers overwhelming prefer a bank that has a large footprint when it comes to doing business in Latin America.
Latin America, particular big growth areas like Brazil, has been on many an MNC radar screen during the last couple of years. Companies see LatAm and other emerging markets as the last areas where they can generate growth. So banks that can serve the needs of these multinationals are going the Willy Sutton route and going where the money is. They’ve been realigning coverage models to emphasize global relationships that deliver all the bank’s geographies to the customer.
And geography is the operative word. In a pre-meeting survey of the NeuGroup’s LatAm Treasury Managers’ Peer Group, 60 percent of respondents said they prefer footprint/geographic coverage more than system capabilities (20 percent) or global relationship (20 percent).
Hurdles. Ironically, one of treasurers’ biggest wishes has also been one of their biggest obstacles. That’s because there are few truly global banks with a large enough footprint in the area, which brings up the issue of a lack of competition. Several in the LatAm group have expressed a concern that there is a decided lack of banking partners in the region.
A lack of SWIFT capabilities in the region was another hurdle having been consistently mentioned at LatAm peer group meetings. Many companies are looking to become less dependent on any given bank for transactional needs – regardless of size and scope – by looking into bank-agnostic infrastructure solutions like SWIFT for access to banks and standardized messaging.