ABN Amro has been extolling the virtues of white label alliances for small to medium sized banks, suggesting that efficiency gains of up to 50% have been achieved by FX banks who partner with ABN for its client facing tools, liquidity management and back office services.
The bank cites three key benefits of white labelling: cost reduction, enhanced FX capabilities and integrated wholesale solutions.
“This is not about surrendering control of your business, but rather finding the optimal solution to deliver premium FX products and services,” says Chicago-based John Nelson, global head of FX markets.
As has been observed previously, one of the difficulties of ascertaining the effectiveness of a white label offering is clients’ reluctance to have their names in the public domain. Like UBS and Citigroup, ABN does not publicise names or amounts, but it is widely accepted that the logic of white labelling will see both numbers continue to grow (see Profit & Loss, April 2002).
That said, ABN announced this week that it has formed an outsourcing partnership with Allied Irish Bank to provide what it calls enhanced trade services to the bank’s international trade clients. Allied Irish will link its existing information systems with ABN’s to create a shared platform, the Dutch bank says, resulting in more efficient processing and enhanced reporting capabilities. ABN will process all international trade transactions for Allied Irish trade clients.
Meanwhile, ABN has attracted three new continuous linked settlements mandates with Banca Transilvania of Romania, Banque Marocaine du Commerce Exterieur (BMCE), Morocco, and BLOM Bank of Lebanon. The bank expects the three to be up and running in a very short period through the use of its CLS FastTrack service.
The bank has also announced three Indian mandates for US dollar clearing, with Bank of Baroda, Canara Bank and Clearing Corporation of India (CCIL). In the case of Canara, ABN will provide clearing services for its commercial, treasury and CCIL transactions (in India, all transactions in rupees and Usd are routed through CCIL). The Indian organisation was already using ABN for euro clearing services, but the US dollar clearing mandate has been won from JP Morgan which had held the account for close to two decades, ABN says.
Discussions are also underway with Canara to sign up to CLS testing, and the bank is also said to be interested in discussions on domestic custody services for its mutual fund schemes says ABN.
Finally, ABN has launched FI Dashboard, an information management tool which is intended to help financial institutions manage their trade portfolios online. The system can support letters of credit, collections, guarantees and standby letters of credit, and enables users to carry out a number of functions including accurately managing funding and cash flow, monitoring costs and improving risk management.