Banking Clubs: Make the right connection
Posted: 15 June 2015 | Paul Golden, FX-MM | No comments yet
As their customers operate in a wider range of markets, banks are increasingly aware of the value of referring these businesses to trusted partners, writes FX-MM’s Paul Golden…
Membership of a banking club enables a bank to provide access to branch infrastructure in countries where it has no direct physical presence for services such as cash collections, account opening and identification support.
The major clubs – IBOS, Connector, TES, Unico and Unicash – differ in their geographical reach, founding origins and structures, explains Bernd Richter, Partner at Capco. “M&A activity between banking groups will drive down the addressable market for banking clubs, but they still have room to grow. From a geographic coverage perspective, they provide member banks with an alternative to managing bilateral relationships independently.”
Connector enables its members to serve commercial and corporate clients that need cash management and other banking services, ranging from electronic banking and payments to local, specialised activities, says Chairperson Mehtap Yilmaz. “Since member banks are able to both receive and make referrals, there is a bilateral relationship between members.”
Connector members’ clients may benefit from residential bank account opening and products such as MT 101 for payment transactions, MT 940 and MT942 which are sent via Swift channel.
Yilmaz refers to an increase in bilateral agreements among banks. “Many global and international banks prefer these business models to serve their clients with local expertise from preferred partners. We expect formal alliances to grow, either in the form of banking clubs or bilateral referral agreements. Banks prefer formal alliances because it provides them with a standard level of service that they can commit to their clients.”