The debt crisis in Greece and other parts of Europe has lots of people predicting carnage in the European banking sector. And while that remains to be seen, Wells Fargo is ramping up its treasury management technology in an attempt to give worried international corporates a better handle on financial positions and concentrations of assets in local banks.
"In regards to the European crisis, if you think about the scenario of a parent firm that's monitoring their finances, they are going to be looking at a concentration of balances," says Judd Holroyde, senior vice president and head of global product management, claiming Wells' steady financial position in the U.S. positions it to offer improved treasury management visibility to corporate clients.
"A lot of American companies are concerned about using local credit lines with smaller, tier-two or tier-three banks," he says.
The bank, which has plied its stability relative to other financial institutions to propel recession-era growth strategies in the past, is taking that pitch on an international corporate banking tour. The bank says it is expanding its aggregation capabilities and extending its cash management solutions to European companies that have interests in the U.S. The bank is also targeting U.S. firms with subsidiaries in Europe. Wells is selling a portal that lets customers access local and pan-European payments systems, including ACH payments in 40 countries, as well as their Wells Fargo accounts and cash positions around the world through a single-sign on to the bank's Commercial Electronic Office business portal.
"What a parent company can do is manage their balance sheet so that they have zero balances across local banks," Holroyde says.
The CEO portal and its CEO Mobile companion are designed to give executives the ability to approve payments, receive alerts about transactions and other items that need attention, review account balances and transactions, manage commercial card expense reporting, review rates for expiring term loans and administer and reset passwords. New are the cross-continental capabilities and the bank's strategy to use its "my CEO" tech tools to assuage corporates concerned about the economic and currency crisis percolating in Europe.
"A corporate may not want to build a balance too high at any one bank, so they may want to concentrate on [mitigating that threat], so they are comfortable with their balance sheet," Holroyde says.
Holroyde says that by providing more visibility into financial relationships, accounts and positions, Wells Fargo is providing more control to corporates on both sides of the Atlantic by giving them a more frequent and accurate picture of their cash flow — and how that flow may be impacted by the credit or institutional risks of a certain country. "A lot of companies are very sensitive to risk. This added control gives them the ability to see what their balances are, and which transactions are happening with which accounts," he says.
Holroyde says the underlying tech that combines Wells Fargo's payments and deposit systems with its corporate treasury system and account aggregation engine, was built in-house by Wells and is integrated with Wells' core banking platform. "That platform is the same in Europe as in the U.S., so it's interoperable," Holroyde says.
Enrico Camerinelli, a senior analyst at Aite, says Wells Fargo's move is a competitive play against U.S. bank rivals, such as JPMorgan Chase, that he says are better known in international treasury management circles.
"Wells could add trade finance along with a treasury management function that also allows companies to improve their liquidity, receivables, collection management, and payables on the same platform that does cash forecasts," he says, adding that Wells can also reach out to corporates worried about how the strength of the dollar versus the Euro impacts their liquidity in the Eurozone.