James Rausch, head of Canadian client coverage and global head of transaction banking for banks, brokers and exchanges with RBC Investor & Treasury Services, speaks with Global Finance on bespoke customer service, innovation and trade flows.
Global Finance: How can banks ensure they match the client-centric trade finance services offered by more-agile newcomers?
James Rausch: I would say, first and foremost, that it is critical to take pride in being a client-centric organization. There is no substitute for delivering an exceptional client experience; but it is important that banks continue to adopt a more-agile approach to delivering the products, technology and services that clients need and expect.
Letters of credit are used in major markets, such as Asia, and help buyers or importers obtain preshipment finance or working capital from their banks. This will remain in place, as it serves a need. Clients in the developed world are moving to an open account structure, and we are seeing a shift by providers to offer these solutions to clients.
The new entrants in this field are very focused on technology; while the banks have an established competitive edge in providing credit products, such as trade finance. I think there is great opportunity for banks and new entrants to have a symbiotic relationship, bringing different skills and capabilities to the table. There will be an advantage to working together on niche technologies and being first to market.
GF: How can you help your clients meet different regulatory requirements involved in cross-border transactions?
Rausch: One of the strengths we have at RBC is our ability to provide bespoke service to our clients, depending on their needs and capabilities. Larger corporate clients will have the resources to monitor and respond to regulatory requirements, whereas small and medium-size enterprises may require assistance in navigating the regulatory environment.
Our teams are specialized by industry, enabling them to provide guidance on the broader view and on the industry or particular sector they cover.
GF: Are you looking to innovation to bring down the cost and complexity of compliance requirements?
Rausch: Absolutely. Innovation remains a priority for all of RBC. We are creating an environment that nurtures innovation and collaboration, with a laser focus on the client. RBC is also encouraging employees to seek better, smarter ways of working across teams, fostering entrepreneurship and finding new approaches to problem solving. We are investing in a trade-finance modernization program that will create further efficiency to our existing processes.
GF: What effect will a forecast rise in commodities values have on the flow of trade globally and in Canada in particular?
Rausch: Canada is an exporting nation, and Canadian companies have a great deal of experience in this space. As we know, commodity values can be cyclical. They are returning to moderate levels from where they were a year or 18 months ago; and the effect should be positive for Canadian companies, as they will continue benefiting from a lower Canadian dollar. Also, many companies have removed excess costs from their supply chains and are more agile and efficient.