How Commerzbank helps businesses expand internationally

Transcript

The World Trade Organization predicts that world trade will grow just 2.8 percent this year; 3.6 percent for 2017. Getting back to pre-crisis levels of growth requires banks specialising in international trade to be efficient, client-focused, and future-proof. Commerzbank’s Roland Boehm argues that 150 years of supporting German industry and European trade means his company meets these standards. He describes how the bank’s structure and network facilitates its client-centric approach, explaining how it works with European clients exploring overseas, and international clients with an interest in Europe. He also introduces the latest addition to Commerzbank’s international family: a subsidiary opening in Sao Paulo, Brazil.

World Finance: The World Trade Organisation is predicting world trade will grow just 2.8 percent this year; 3.6 percent for 2017. Facilitating a return to pre-crisis levels of growth means banks specialising in international trade must be efficient, client-focused, and future-proof. Does Commerzbank meet these standards? Joining me is Roland Boehm.

Roland, Commerzbank’s been at the heart of Germany’s industry for 150 years, you’re now at the heart of Europe’s trade. Talk me through your international expansion.

Roland Boehm: World trade is something we’ve been focusing on for most of the bank’s history, as a leading German financial institution with over 100,000 corporate clients in Germany, and an extensive branch network with 70 sites in over 50 countries. Trade is something that we do, and it’s something that’s really ingrained in our DNA.

Besides our private client network, we offer very actively client-centric investment banking services. But the heart of the network really is the corporate banking that we do – for German companies, obviously, and European companies that go into the world, and for major corporates that go and look to Europe for their banking services.

World Finance: So, following your clients overseas, building positive client relationships; how does Commerzbank’s structure facilitate that?

Roland Boehm: Well, I think a lot of banks talk about being client-centric; it’s actually a lot harder than it would appear. And we’ve put a lot of work into designing processes and structures that really work to ensure seamless communication with our clients over the geographies that we cover.

We’ve got a lead relationship manager, wherever the client is located. And they’re the facilitator for the client into the network. It means that in all major questions the client has one central person to talk to, whose job it is to facilitate the client request in an efficient, effective manner, throughout the network, wherever that may be. Feed the answer back, and to make sure that the client has the competent people to talk to locally, wherever he desires them.

You need to design process around being relatively simple and open. So that communication is facilitated, so that people know who to reach. That you’ve removed barriers to doing business, there’s no discussion about internal revenue sharing and other things. And that means you can focus your energy, your time, and the components of your product offering on your clients, and how you can help them solve their issues.

The interface is there; the process is quick and efficient. It sounds easy, but it’s a lot harder to do sometimes than you may imagine.

World Finance: So talk to me about the network then: you have an international network of subsidiaries, branches, offices, correspondence banks. How wide is it, and what can you achieve with it?

Roland Boehm: We’re very excited about the fact that we as a bank built around trade are able to cover about 85 percent of world trade. And just to throw some figures out at you, Commerzbank processes around one third of German foreign trade – so one third of German exports go through Commerzbank. About 17 percent of eurozone exports. And that makes us really a trade powerhouse. And that’s something that internationally oriented clients – particularly in a world that continues to globalise – really value.

World Finance: What does that help your customers achieve; can you give me some examples?

Roland Boehm: Happily: let’s follow an Asian client looking to invest in Europe. We’re not only assisting the client in the capital markets activity, tying down the investment. But there’s a lot of nuts and bolts work involved in bringing the local expertise to the client, and helping them facilitate and tie that down, so that they can seamlessly operate between the jurisdictions that they’re in.

So I think, tracking international clients into Europe is one part of that. The other example, where a German client or a European client invests in another country: we’re very much available with the expertise both locally, to ensure that tying that down is possible and seamlessly works after they’ve arrived; and but also in getting them there, and making sure that the acquisition – or whatever it is that they require to tie that down – is handled competently.

World Finance: Talk me through your digital strategy, because this really is key to keeping corporates efficient.

Roland Boehm: Absolutely, and we’re seeing transformative processes everywhere.

Digital is something that the bank is really closely tied to, and two of our largest subsidiaries – that’s Comdirect in Germany and mBank in Poland – are really innovation hubs. Not only in their countries, but for the industry as a whole.

Getting digital right means largely focusing on having the right kind of end-to-end processes. So, really finding solutions that help make clients’ business easier as we move into the digital world. But there’s another leg to it, which I’m also relatively excited about. We of course see a lot of the business that our clients do, so I think we very much see what’s happening in the digital space overall. And advising clients, I think, in managing processes that are attached to industry 4.0, is also a value-added service that we can do.

I think the bank is also very actively engaged in the fintech space, looking to invest in the technologies of the future, see where banking goes. We want to be an active part of that.

World Finance: So to the future then: any new plans for products or expansions you can tell us about?

Roland Boehm: Well you’ve certainly hit us at exactly the right period of time. We’ve just very recently – in fact a couple of days ago – opened our newest subsidiary, the newest member of the international family, in Sao Paulo, in Brazil.

Sao Paulo is one of the most important destinations for German capital outside of Europe, and also the gateway to Latin America. And we are very excited, and very very pleased, to be opening a major subsidiary with around 50 people to support our clients going to Brazil; but also Brazilian and Latin American clients looking to go to Europe.

As I said, regardless of the figures of world trade, globalisation continues. The world is becoming more interconnected. And we’re very excited to be an active part in that.

World Finance: Roland, thank you very much.

Roland Boehm: It’s been a real pleasure Paul, thank you.