No matter how many times he travels abroad, Alan Griffith is still astonished at the speed of globalization.
"People fly to London and Paris the way they used to go to Boston and Philadelphia," said Mr. Griffith, 56, Bank of New York Co.'s vice chairman for international banking.
And the pressure is getting more intense. "If you aren't already participating in it or making sure you can compete, you've probably already missed the train," he said.
Under Mr. Griffith's direction, Bank of New York is making its mark internationally through a host of solid but unglamorous businesses.
Rather than mimic Chase Manhattan Corp. and J.P. Morgan & Co. by entering syndicated lending and investment banking abroad, Bank of New York-like Philadelphia-based CoreStates-offers bread-and-butter services such as custody, securities processing, and trade finance.
These are fiercely competitive businesses, with a number of money-center banks competing for paper-thin margins. If you can't compete on price and quality, you lose customers, Mr. Griffith said.
To some extent Bank of New York's international growth is really an extension of its strong domestic infrastructure in areas like funds transfer and documentary processing. But the decision over the last few years to expand internationally represents a new direction for the company.
One of the oldest financial institutions in the United States, Bank of New York was long best known for its retail business in the New York metropolitan region, as well as for its corporate banking and clearing businesses.
That changed, though-first through the 1989 acquisition of Irving Trust Co. Irving, known as a bankers' bank, had a large international network of offices and correspondent banks and was heavily involved in worldwide securities processing and trade finance.
More recently Bank of New York bought the global custody business of J.P. Morgan & Co. and the invoice discounting and factoring businesses of France's Compagnie Bancaire. And the purchase last year of International Factors from Lloyds TSB gave the New York company the largest share of the U.K. market for asset-backed lending, about 20%.
"They got the basics from Irving and used it to build a high-powered processing business," said Lawrence W. Cohn, a banking analyst with Ryan, Beck & Co. in Livingston, N.J. "But what they've got today doesn't look anything like the old Irving."
Another change was speed at which financial markets are becoming global. The pace has been unexpectedly fast and will get faster still, Mr. Griffiths said.
Analysts agree. "Financial companies are going global more rapidly than we expected," said Arthur P. Soter, managing director at Morgan Stanley & Co. "All companies will likely have to reassess their strategic positions as competition in the global arena intensifies."
Still another reason Bank of New York has turned abroad for growth: Revenues from the domestic banking business in areas such as lending and custody are decreasing.
"Banks are under tremendous pressure to generate revenues and develop diversified streams of income," Mr. Griffith noted.
"If you're just making loans and providing basic retail services in your own backyard, you really have to ask yourself how fast you're going to be able to grow that business."
Analysts find no reason to disagree with that conclusion.
"The domestic product suite is generally more mature," Mr. Cohn said. "The quantity of U.S. debt is not growing, so the capacity for that business to grow is limited."
The bank's decision to concentrate on areas like funds transfers and processing, which sometimes includes extending credit, also means that its business worldwide is far more complex than just putting a loan on the books.
It also means that the bank is expanding in parts of the world where risks may be hard to gauge.
"You have only to look at Southeast Asia to see that fast-growing economies can have significant risk factors," Mr. Griffith said. "A lot of money has been lost in these countries, and bankers have short memories."
Still, Mr. Griffith said his company's focus will help reduce those risks.
"We're not a big international lender," he noted. Any credit the bank extends, he emphasized, is usually short-term and self-liquidating.
Despite the risks, Bank of New York's best opportunities for growth are now outside the United States, Mr. Griffith said.
"Privatization, the development of pension fund markets, and trade finance are spreading," he said. "We're very excited about the potential for growth."
Besides, he added, U.S. banks will be increasingly involved in international operations whether they like it or not.
"It's time-consuming, costly, frustrating, and risky, but banks have to recognize that their customers are going to require international services," he observed. "If you can't provide those kinds of services, they're going to go somewhere else."