Bank of America Merrill Lynch's balance-sheet strength and global footprint – amid global bank retrenchment – has served the bank well in recent years.
Underscoring its market-leading status, the institution took best global transaction services house and best transaction services house in North America prizes in Euromoney's 2014 Awards for Excellence.
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BAML's Dub Newman |
Dub Newman, head of global transaction services in North America, sums up the institution's competitive strengths. “As a result of the financial crisis, many banks are retrenching and going back to their home markets, but we are not retrenching at all," he says. "We are not leaving one country. "We’re even investing in more licences in certain countries and improving the presence we have. But we are only focusing on clients in those countries who value our solutions.”
Paul Donofrio, head of global corporate credit and transaction banking, who along with Newman has been in his role since 2011, explains that no bank can afford to pursue a growth-at-all-costs strategy.
"It has become more expensive for banks to serve their clients," he says. "For example, the amount of capital needed to be in business has increased significantly. To deliver for both our clients and our company [our shareholders], we must focus our resources on clients who need and value the solutions we deliver, especially those solutions that differentiate us from other banks.
“It is inefficient to marshal resources where you don’t have a competitive advantage. We have to concentrate resources on the clients where we can make a real difference. This not only improves our efficiency but also our clients’ satisfaction.”
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There are very few banks who can deliver Dub Newman, BAML |
The bank responded to changes in the market by focusing on their most important clients – the US corporates with a global footprint. As a result of this focus, it banks 97% of the US Fortune 500 companies.
“There is a need to determine the clients to which you can provide the most value," says Newman. "For the global multinational companies, we deliver great advisory in capital markets and GTS capabilities. We want to do those services really well.
“There are very few banks who can deliver for corporations globally. We know we can deliver for clients who need to operate in multi regions. Conversely, we would not try to compete for a client’s local business if we felt a local bank could deliver for that client more effectively.”
Innovation services
BAML has created innovative services in recent years.
For example, the bank has developed digital disbursements, which enable corporates to make payments directly into an account without the recipient having to provide their bank-account details.
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Paul Donofrio, BAML |
It has been successfully used for insurance company Allstate, with its Fast Mobile e-Payment product. The payments can be made directly into the recipient’s bank account using their email or telephone number as a method of verification.
Once the customer has confirmed they will receive their payment through this method, they are sent details by BAML on how to accept the funds. The client then goes through a registration process, with the payment made once the transfer has been confirmed. The payments are available regardless of the bank used by the recipient.
BAML is one of the founder members of Swift’s KYC registry. Amid growing digitization, the bank launched its management tool CashPro Online in 2009. The solution has since been expanded to include CashPro Mobile, enabling corporates to access their cash management, FX and trade finance facilities on the move.