73. Banking Channels Branches ATMs PC Banking Internet Banking Wireless Banking Low Tech High Touch High Tech Low Touch Cost Efficiency 1970s 1980s 1990s 2000+
74. Banking Channels Corporate Multiple products Deposits Loans Mortgages Insurance Securities Payments – Cards Multiple channel delivery Multiple segments Branch PC Call center ATM Sales agent Retai l Large Business Private Affluent Medium Size Business Mass Small Business
107. Mortgages – Cognizant Expertise Involvement at all levels of IT value chain System Integration Infrastructure Outsourcing Application Development & Maintenance IT Enabled Services IT Consulting New Line of Business e.g. HELOC (Home Equity Line of Credit) Enterprise Application Integration using BizTalk, Enterprise Security Integration System Management Server (2003), Empirix Monitoring, Server Upgrades New LOS Implementation, Maintenance & Support to existing LOSs IT Helpdesk
150. Forex management…Example Need 2 million Euros after 90 days, I do not want the exchange risk. What to do Exporter Bank A Forward contract for 90 days for importer to buy Euro against USD OK, forward contract entered with importer. But what if Euro appreciates after 2 months. We need to cover the risk. Bank B Importer Forward contract for 90 days for exporter to sell Euro against USD Will receive 2 million Euros after 90 days, I do not want the exchange risk. What to do OK, forward contract entered with exporter. But what if Euro depreciates after 2 months. We need to cover the risk. Forward contract where Bank A would buy Euro 2 million from Bank B after 90 days
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154. Cash Management Payments to vendors from payment accounts at factory locations Collections from dealers to collection accounts at sales office locations Corporate head office account Bank Pharma company Manages multiple account surpluses, deficits, provides reconciliation statements, invests surpluses in money market instruments Payments to Factory employees Payments to sales and admin staff
163. Key Market Players APPLICANT BENEFICIARY ISSUING BANK The party that requests the bank for opening the LC-usually the importer or the buyer of goods. Description Examples ADVISING BANK CONFIRMING BANK The party to which the LC is favored, usually the exporter or seller of the goods. The bank that actually issues the LC. Bank that advices or informs the exporter that an LC has been received in its favor. Bank that confirms the LC which constitutes a definite undertaking of the confirming bank’s liability to make payment if the documents presented conforms to that required in the LC. Any Corporate manufacturing, wholesaler (Importer) Any Corporate manufacturing, wholesaler (Exporter) BNP Paribas ABN Amro American Express, Bank of New York REIMBURSING BANK Agency that clears trades and settles trading accounts Allied Irish Banks
172. Factoring vs Forfaiting Factoring Forfaiting Factoring work mostly with consumer goods Forfaiting usually work with capital goods, commodities, and large projects Factors work with short-term receivables (up to 180 days) Forfaiters generally work with medium and long-term receivables (180 days to 10 years), Most factors do not have strong capabilities in developing regions of the world where legal and financial frameworks are inadequate and credit information is not readily available through affiliate factors. Forfaiters usually require a bank guarantee; most factoring houses are willing to work with receivables from these higher-risk, emerging markets. Factors usually want access to a large percentage of an exporter’s business, Forfaiters will work on a one-shot basis Once the creditworthiness of the importer has been checked by the factor in the land concerned, merely the veracity of the claim has to be proven. Forfaiting takes place on the basis of certain collateral
212. Key Market Players INVESTOR INVESTMENT MANAGER BROKER / DEALER Source of money that gets invested into a “fund” Description Examples EXCHANGE CUSTODIAN DEPOSITORY Person(s) who decides what securities to buy/sell with the money invested in the fund Entity that actually trades the securities on the exchanges Place where the trading occurs – Auction or Dealer market Fiduciary entity who oversees the cash and securities that a fund/corporation/entity holds Place where traded securities end-up, are safeguarded and are transferred Individuals, Mutual fund and Pension fund investors Fidelity, Prudential ICICI, Vanguard JPMorgan, Merrill Lynch, Charles Schwab NYSE, NASDAQ, NSE Mellon, Chase DTC, CREST CLEARINGHOUSE Agency that clears trades and settles trading accounts NSCC, London Clearinghouse
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