Connecting the Dots

With a traditional, bread-and-butter, domestic-centric portfolio frequently consuming the lion’s share of attention, resourcing and prioritization at financial institutions, it’s easy to lose sight of the importance of competitive differentiation that complimentary, innovative products can bring to the equation. 

International services can bring attributes to your bank or credit union that ultimately reinforce your core offering and may elevate your profile in the industry. 

With performance data, metrics and peer group comparisons being front and center in assessing how your institution stacks up relative to the intense universe of competitors, including burgeoning fintech entrants, let’s look at how international services enhance all important indicators of financial well-being. 

As a depository institution, assets, liabilities and capital are an integral part of your DNA. The ability to attract deposits is perhaps the quintessential gauge of confidence clients have in your bank or credit union. 

When a prospective client, whether it’s a business or individual, evaluates the attractiveness of a financial service provider, they may base their decision on the ability to competently offer a one-stop-shop with respect to services they require. 

With millions of small to mid-size businesses, high-net worth individuals and people at large requiring services that are global in nature, international payment services are a critical component of your offering that in today’s world you can’t afford to overlook. 

On the flip-side of the balance sheet are, of course, loans of various shapes and sizes. Intelligent lending is a prerequisite for maintaining a healthy level of capitalization and viability in the marketplace. The ability to extend credit is an essential consideration across all corridors of our economy. 

From an individual’s first home, installment credit, all the way to providing working capital and longer duration commercial facilities to businesses of various shapes and sizes, lending goes hand-in-hand in promoting growth and vitality.

With international trade comprising approximately 26% of our economy’s total output as measured by Gross Domestic Product (GDP), banks and credit unions need to be in a position to serve as catalysts to their clients who are involved in import or export, or who invest or travel abroad.

With the aforementioned macro forces in motion, connecting the dots by weaving international services more prominently into your existing portfolio will likely be a prerequisite for success with many segments of your client base.

Promoting awareness of this with the leadership of your institution should be a focal point. Leveraging insightful analytics, including providing a scorecard of how well your institution ranks relative to peers, is an area where we can help.

We’ve developed a framework that looks at overall revenue potential from cross-border payments and foreign exchange, in conjunction with capturing the positive impact this has on overall competitiveness relative to industry benchmarks. The end result is a comprehensive roadmap to unlock your international potential.

Stephen Kuhl, CFA