Whitman E. Knapp

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(No Transcript)
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Whitman E. Knapp
President Needs of US Middle Market
Companies for Trade Banking
Presented at the Bankers Association for
Finance and Trade16th Annual Conference on
International TradeConnecting the Dots November
2 - 3, 2006Renaissance Chicago Hotel, Chicago, IL
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What do Middle Market companies need from their
Trade Bankers? . . . . . . . . . . . . . . . . .
. . . . . . . . . and how well banks are meeting
expectations
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• Institutional Needs
• People Needs
• Product Needs
• Traditional Products
• Open Account
• Transition to the Web

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Institutional People Needs
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Importance of Institutional Factors
Self-Stated Importance
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Importance of Institutional Factors
Self-Stated Importance
Very Important minus Not Important
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Importance of Calling Officer Factors
Self-Stated Importance
Very Important minus Not Important
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Top Ten Attributes in Importance
Self-Stated Importance
Very Important minus Not Important
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Change in Rank Order of ImportanceLeading
Attributes
Self-Stated Importance
Institutional Attributes
Calling Officer Attributes
2006 2004 Operational Quality Trade
Services 1 1 Internet-based Systems 2 4 ?
2 Single Contact 3 2 ? 1 Pricing Trade
Services 4 3 ? 1 Operational Quality ICM 5 5 Com
prehensive Trade Services 6 6 Pricing
ICM 7 7 Extension of Credit 8 8
2006 2004 RM Responsiveness 1 2 ? 1 RM
Tenure 2 1 ? 1 RM Trade Knowledge 3 3 Effective
Product Specialists 4 4 RM ICM Knowledge 5 5
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Trend Attribute Importance Has Increased
Compared to 2004
Average Importance Score Top Ten Attributes
Benchmarked 2004 vs. 2006
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Institutional SatisfactionAll Bank Average
Very Satisfied minus Dissatisfied
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Calling Officer SatisfactionAll Bank Average
Very Satisfied minus Dissatisfied
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Meeting ExpectationsImportance versus
Satisfaction
High Satisfaction
Low Satisfaction
HighImportance
Areas in Need of Improvement
LowImportance
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Bank X
HIGH
CORE COMPETENCY
Derived Importance to Customers
LOW COMPETENCY
LOW
HIGH
Differentiation from Competition
LOW

• Operational Product Quality
• Customer Service Quality
• Local Customer Service
• Global Support Network
• Competitive Pricing
• Extension of Credit
• Long-Term Relationship
• Ability to Customize Products
• Risk Management Assistance

• Multiple Currency Provider
• Internet-based Products
• Online Access to Accounts
• PS - Technical Expertise
• Payment Sales Specialist Capabilities
• Trade Specialist Capabilities
• RM Responsiveness
• RM Tenure
• RM Product Knowledge
• RM Effective Follow-Up

LEGEND
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Bank Y
HIGH
CORE COMPETENCY
Derived Importance to Customers
LOW COMPETENCY
LOW
HIGH
Differentiation from Competition
LOW

• Operational Product Quality
• Customer Service Quality
• Local Customer Service
• Global Support Network
• Competitive Pricing
• Extension of Credit
• Long-Term Relationship
• Ability to Customize Products
• Risk Management Assistance

• Multiple Currency Provider
• Internet-based Products
• Online Access to Accounts
• PS - Technical Expertise
• Payment Sales Specialist Capabilities
• Trade Specialist Capabilities
• RM Responsiveness
• RM Tenure
• RM Product Knowledge
• RM Effective Follow-Up

LEGEND
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Product Needs Growing Use of the Internet Bank
Web Sites
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Trend More Are Processing overBanks Web Site
Percent of Services Processed Through
Documentary Collections
Import Letters of Credit
Export Letters of Credit
?
?
?
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Open Account Sales
55
2004
Where Companies Sell on Open Account Canada 63 Eu
rope 63 Central America/Mexico 51 South
America 38 South Asia 38 North Asia 31 Middle
East 20 Eastern Europe 19 Africa 12
64
64
Today
Expected in Two Years
66
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Open Account Buys
Today
Where Companies Buy on Open Account Europe 60 Sou
th Asia 49 Canada 43 North Asia 36 Central
America/Mexico 28 South America 16 Eastern
Europe 11 Middle East 9 Africa 2
70
Expected in Two Years
72
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TrendPercent of All Import Letters of Credit
Opened Outside of US per Year
2004
2006
36
72
63
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Use of Bank Services to Assist with Open Account
Transactions
Use Bank Services
Leading Services Currently Used
Document preparation
Bank reference checking
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Logistics support
Outsourcing of trade data checking
Risk mitigation
Discounting of transactions
Those in the West are least likely to use bank
services to assist with Open Account transactions
(41 vs. 51 in Midwest and East).
Finance inventory in transit
Trade counterparty information
International tax accounting services
Trade transaction information/status reports
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How Important it is that a Bank Provide Internet
Services
via proprietary workstations supplied by bank
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Trend Increasingly More Important thata Bank
Provide Most Internet Services
Very Important minus Not Important
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Satisfaction with Internet ServicesOffered by
BanksAll Bank Average
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Trend Interest in E-commerceRelated to Payment
Initiatives
Percent Rating Very Interested/Interested
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NAFTA US Trade vs. Mexico and Canada
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Institutional Attribute Importance
Very Important minus Not Important
Compre- hensive ICM
Country Risk Assumption
Global Support Network
Operational Quality
Extension of Credit
Price
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Calling Officer Attribute Importance
Very Important minus Not Important
Effective Product Specialist
RM Decision Making
RM Trade Service Knowledge
RM Responsiveness
PS Ease of Reaching