In China where cultural norms are strong, and the regulatory environment is complex and evolving rapidly, selecting a new banking partner may pose huge challenges.
The Asia Treasurers' Peer Group (ATPG) discussed this topic at their recent meeting, hosted by Intel, and sponsored by Standard Chartered Bank. Many companies today use their global banks in China to meet their China cash management banking requirements. The ATPG heard from a guest presenter, who shared their story on the rather unique alternative of partnering strategically with a local Chinese bank.
Choosing this approach to banking in China was a challenge up-front, and included spending a lot of time training the local Chinese bank on the IT and operational needs of western MNCs, but the company viewed it as a worthwhile investment on a long-term banking relationship as the company further entrenched itself in a key market for its business.
One strategy to consider included selecting a first level bank branch (i.e. hierarchically one step away from headquarters control and status) that has a high level of interest in your company’s business to ensure the appropriate level of attention and service from the bank branch. Shanghai branches may not be ideal for some, since there are many big companies located in Shanghai vying for bank’s top client attention. The largest Chinese banks which are pre-occupied with servicing the State-Owned Enterprises (SOEs) may also not be ideal banking partners for the average corporate.
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The Asia Treasurers' Peer Group (ATPG) was founded in 2011 for regional treasurers of large MNCs with treasury operations in Asia. As the first NeuGroup in Asia, it is now the catalyst for other Asia-based NeuGroups that serve members in this region.
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