Global Transparency in Banking with the Virtual Network Bank Concept

Posted: 15 September 2017 | , | No comments yet

With the global economy more competitive than ever, businesses of all sizes have started to expand beyond their own domestic borders. There are a number of factors that have enabled medium-sized and even smaller companies to venture into foreign markets, including technological advancement and the ever-growing Internet. However, going global is not without its challenges – no matter the size of your company…

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International banking needs
One of the main concerns when going global is the setup of the right bank portfolio. Often, companies expanding globally find that their existing banking network is not adequate to meet the needs of all markets. They face the challenge of finding a banking structure that will cater to both old and new markets. More often than not, this is a time-consuming and complicated process: how to find the right bank? What costs do I face? What legislative and regulatory hurdles are there? And even once you have completed this laborious process of searching for a bank and have fought your way through lengthy negotiations, you still face a double challenge: dealing with all the administrative efforts that come with opening an account and connecting to the bank from a technological point of view.

Today, companies have a host of options when it comes to banking communication, ranging from standard communication channels, such as EBICS, to host-to-host connections or to becoming a member of the SWIFT Network. However, what makes the onboarding process so complex and time-consuming is often nothing to do with the technical connection. Rather, the reason it can take months to open an account is that the administrative framework is overwhelming! Frequently, corporates struggle to learn the exact scope of a bank’s services, and neither contract terms and conditions nor the fee structure are transparent. The legislative and regulatory framework can be confusing and differs from country to country. Add to this the KYC process (Know Your Customer) which requires banks to obtain specific information from their corporate clients at regular intervals and which is often laborious and confusing: what data do I need? Who is my contact person? The overall administrative effort is simply enormous.

The Virtual Network Bank concept: standardising administrative onboarding
More transparency and efficiency in the administrative onboarding process are urgently needed. But how can we streamline the process? The answer is the Virtual Network Bank concept – a groundbreaking new approach in Global Transaction Banking that involves literally a virtual network of banks. It enables corporate clients to select banks in the countries they require and to assemble a portfolio that exactly meets their needs. The time-consuming search for suitable banks becomes a thing of the past: no matter where a company wants to go, the network offers the right bank in any country and for any profile.

The key to improved transparency is standardisation: corporates benefit from a standardised contractual framework, negotiated by the provider of the Virtual Network Bank services and a standardised part of the network. While the company continues to be the account holder and has a contract with the bank, the terms and conditions of this contract are fully transparent up front. The same goes for the banking fee structure: thanks to standardised prices, corporates don’t need to fear any hidden costs. The same goes for the KYC process, which is completely standardised. This standardisation creates transparency, and together they generate maximum efficiency.

Benefits for corporates and banks
Virtual Network Bank services enable corporates to save valuable time, money and effort. But they’re not the only ones who stand to benefit: the Virtual Network Bank concept also delivers enormous advantages to participating banks. They no longer need a separate onboarding process for each company, with all the contractual negotiations and KYC requirements this presents. In addition, banks have a chance to do business with a new customer segment, translating to tremendous market potential.

In doing all this, the Virtual Network Bank concept significantly exceeds any consulting services traditionally offered in the context of the technical onboarding process. Instead of customised support services we’re looking at a standardised solution that fills an important gap: dealing with administrative onboarding issues. Corporates can say goodbye to having to put in endless hours in trying to find the right bank and having to overcome countless administrative and legal obstacles. Instead, they gain access to an “off the shelf” onboarding solution and a standardised portfolio. Whether it is the scope of an offering, the contractual framework, fees or KYC questions – the whole process is enormously streamlined.

The Virtual Network Bank – part of the BELLIN GTB Services offering
We have seen that establishing and maintaining a global banking structure is one of the main challenges companies face when expanding their business. It is certainly not the only challenge though! This is why BELLIN has set up the new GTB Services Unit to develop innovative solutions and services meeting market requirements that are system-independent and open up our knowledge and expertise to non-tm5 users. The Virtual Network Bank service is the first product launched and there is much more to come. Because going global can be daunting – but it doesn’t have to be!

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