LatinFinance - November/December 2014 - 30

as collections and tax administration, but
they have international ambitions of their
own.
Brazil's Bradesco, for example, already
has branches outside Latin America in New
York, London, Hong Kong and Grand Cayman. "We also have an international strategy," says Roberto Medeiros Paula, executive
general manager focused on transaction
banking at Bradesco.
"We have a strategic presence in countries where we believe we are adding value
for our customers going abroad, and also
where there are the head offices of multinationals that have an important presence in
Brazil. So we want to be in the US, and the
same in Europe."
Growing allure
One country which holds particular shine
for transaction bankers today is Mexico,
where a series of investor-friendly reforms
and the creation of the Pacific Alliance
trade bloc are set to boost regional and
Asian trade, bankers say. Mexico's foreign
currency reserves hit a record high in April,
amid soaring export growth.
Bradesco is among those to have spotted
the opportunity and last year applied for
a full Mexican banking license to build on
its existing consumer credit business in the
country.
"The idea is not to expand in retail but
more in corporate and investment banking," says Medeiros Paula, speaking of the
strategy in Mexico. "We follow our clients in
the region, and for the moment that means
focusing on Mexico, and keeping a close eye
on Chile, Colombia and Peru," he says.
Another player that has placed Mexico at
the center of its regional expansion strategy
is Deutsche Bank, which has around 100
people on the ground in Brazil, Argentina
and Chile, and operates in the rest of the
region through a non-present coverage
model.
"Our biggest focus for Latin America in
terms of expanded geographies is TFCMC
(trade finance and cash management for
corporates) in Mexico," says Kika Ricciardi,
Deutsche's head of Latin America global
transaction banking, which also includes
institutional cash and securities services.
"We have had a small team on the
ground [in Mexico] from the beginning
of this year in trade finance, and we also
added another group of corporate banking officers more recently. Our focus will
be on both large local Mexican companies
growing regionally and global multinational

30 L ATINFINA NCE.COM - November/December 2014

CARLOS ELIZALDE, BBVA

"WE THINK OF CLIENTS
AS BEING ON A JOURNEY, BEGINNING WITH
SIMPLE BANKING
NEEDS, AND
PROGRESSING TO
MORE SOPHISTICATED
SERVICES SUCH AS
REGIONAL TREASURY
CENTERS, INTRACOMPANY LENDING,
AND CENTRALIZATION
OF TRADE PRODUCTS
AND FX"
corporates that are expanding into countries such as Mexico and Brazil."
Over the coming months, Deutsche Bank
is looking to broaden its New York-based
trade finance booking system onto an
onshore Mexican platform. It also plans to
roll out its FX4Cash product, a global crosscurrency payments solution, to Mexico,
Argentina and Chile.
"This is a significant investment in expanding Deutsche Bank's footprint in the
region," Ricciardi says. "The fact Mexico has
become such an important focus reflects
our prioritization of Latin America."
One aspect of the growth of transaction
banking opportunities in Latin America
is the regionalization of Latin American
corporations, such as Chilean retailers Cencosud and Falabella, as well as banks such
as Itaú: and subsequently those companies'
greater needs for effective management of
cross-border capital flows.
Carlos Elizalde, BBVA's head of global
transaction banking for Latin America,
gives the example of Mexican microfinance
firm Compartamos Banco, which is expanding in Peru and Central America. Its strategy
is representative of the new confidence of
Latin American corporates, he says.
"We like to think of our clients as being at
a stage on a four-part journey, in which they
begin with simple banking needs, and progress to more sophisticated services such as
regional treasury centers, intra-company
lending, and centralization of trade products and FX," he says.

"More than half of our clients in Latin
America are still in the first two stages, with
multinationals at stages three and four, but
now what we are seeing is intra-Latin America companies exporting capital from their
countries to the region, and requiring more
sophisticated regional solutions," he adds.
Technology focus
To exploit these revenue opportunities, banks are not only changing where
they serve their clients in the region, but
how they do so. For global banks, that
often means relying less on third party
institutions, and making best use of their
global networks. For example, Citi recently
opened a China desk in São Paulo to support trades flows, according to Steven
Donovan, the bank's head of treasury and
trade solutions in Latin America.
Meanwhile, for local firms, changing
how they serve their clients often means using technology to better leverage their local
network. Foreign exchange services benefit
here, for example.
Bradesco this year launched an online
currency platform called Câmbio On-line,
aimed at small- and medium-sized enterprises and mid-market firms. The bank is
also ramping up its cooperation with Swift,
and redesigning its electronic cash management services.
"We do serve large corporates, but we realized a couple of years ago that we needed
to enhance our service to small- and medium-sized [companies], so we launched an
online platform and we are already seeing
results," says Medeiros Paula, discussing
Câmbio On-line.
Paz at BCP also points to technology as
an important part of its strategy to defend
and grow its transaction banking business
in Peru. He says one advantage it has over
both smaller and international rivals in
Peru is the size of its local sales force. But
new tools can help the bank further improve its service, and keep and win more
clients.
"We are a big brand in Peru and to some
extent we are helped by technology, which
we are better able to customize than the
global banks, which have an off-the-shelf
solution," says Paz. "On that basis, in cash
management, we can compete directly
with the global banks and maintain our
market share.
"International banks are pushing hard,
but we see new technologies such as hostto-host as offering big opportunities for
us." LF

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LatinFinance - November/December 2014

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