The Americas

While countries such as Mexico are becoming increasingly recognizable players within the Americas, the region as a whole is still largely defined by US – and to a lesser degree, Canadian – economic activity.

Thus IBOS majors in the US and Canada, with further coverage of  Mexico and the Caribbean area.

Each banking market is very different. The US is a very large market but still fragmented from a banking point of view.

The customer’s concerns in the US and Canada will centre of the efficiency of the collection and disbursement process, the use of electronic payments rather than cheques, and then the concentration and mobilization of liquidity.

The Central and Latin American markets are characterized by a wide array of currencies and economic stabilities, as well as varying regulations. There is also a lack of easy ways of injecting and extracting cash into some economies.

Cross-border trade is frequently in US Dollars, not least because the seller is afraid of currency devaluation when invoicing in local currency.

The customer’s concerns will be efficient and secure local paying and receiving, due to the intricacies or absence of local interbank clearing. A company may have to use different banks by region in the country. They may also need to move cash balances between banks by armored truck or by bank draft that has to be transported securely.

A second concern is managing foreign exchange exposure such that if the company is importing goods from the parent, the value in local currency to be paid does not rise dramatically prior to payment. If there are exchange controls in place, it will be a priority to ensure that the foreign currency can even be obtained.

A final concern is managing local liquidity to avoid having large balances in either direction. Debt may be charged high rates of interest and there can be problems in availability. Companies will want to ensure stable local credit facilities, which are frequently only available from foreign-owned banks. There is also a risk of having cash balances that – in extreme circumstances – are frozen in the local banking system.