Being the fourth largest US bank with assets of US$754.2 billion and market capitalisation of US$95.3 billion (as of 30 September 2007), Wachovia Bank NA is an expert world leader in the field of international trade finance, leveraging on more than 200 years of experience which has guaranteed it a firm global foothold.
Specialising in trade solutions ranging from negotiating to transaction financing, Wachovia facilitates both import and export trade swiftly and professionally. Joseph Lee, vice president and insourcing operations manager, Wachovia Bank, NA Hong Kong Branch says that with a client base of around 70 multinationals, and more than 300 trade specialists Wachovia's Hong Kong office represents the world's largest scale of insourcing operations. The scope of services includes letters of credit, payment processing and document examinations for large financial institutions and corporations in Europe, the Americas and Asia.
Wachovia Hong Kong's customers include major banks on every continent. "Our niche lies in the provision of expert skills in specialised areas. We provide an array of professional services to our clients at a cost and quality that are best in class."
These services include unfettered access to global infrastructure. For example, Wachovia boasts more than 3,000 correspondent banking relationships in 130-plus countries; account relationships with 80 per cent of the largest non-US banks; international processing centres in New York, Philadelphia, Miami, Charlotte, Winston-Salem and Los Angeles; and operations in major European and Asian cities including Hong Kong.
Mr Lee notes that Wachovia's insourcing business encountered some typical teething problems when it was initially established 10 years ago. He recalls that persuading banks to outsource their operations was a challenging task. "However, after serious analysis, escalating labour costs, particularly in Europe, and the specialised knowledge required by individual banks to deal professionally with such a huge cross section of operations made a partnership with Wachovia a sound business decision for many. Our clients also realised they could minimise operational risks by employing us as a processing agent in the trade finance procedure," he adds.
Another obvious plus for customers is that Wachovia's role as an agent is invisible to the respective parties in the process. "For example, in cases where we issue a letter of credit on behalf of a bank to an exporter, our insignia does not feature on the letter. In essence, it appears the bank issued the letter directly," he says.
In addition, Wachovia's operations are not limited to Asian office hours. Due to international time differences, Wachovia Hong Kong runs a 24-hour operation to cater for the business hours of the Asian, European and American markets. "A European customer can issue documents for processing at the close of business and find the completed documents on their desk the following morning when they open for business. We fully utilise the time difference to the client's advantage," Mr Lee says, adding that by using Wachovia's service, clients in effect streamline their operations.
Wachovia has also embraced technological advancement by being the first bank in the world to initiate letters of credit over the internet. The bank continues to focus on innovation and technology — particularly relating to the evolution of the financial supply chain and making this technology available to its trade insourcing partner banks. Urgent overnight documentation includes checking commercial invoices, transport documents and certificates of origin.
Rules and regulations
High levels of technical expertise are indispensable since international rules govern the industry. Specialists in the trade must demonstrate a thorough knowledge of Uniform Customs and Practice for Documentary Credits, ICC Publication No.600 (UCP 600) and International Standard Banking Practice for the Examination of Documents under Documentary Credits (ISBP). Laid out by the International Chamber of Commerce, these two sets of rules govern the use of documentary letters of credit.
Wachovia offers specialised training for its staff followed by ongoing developmental coaching. It takes a new recruit about a year to become a specialist in trade operations and two additional years to achieve trade documentary specialist status, a key position that is responsible for validating compliance of trade documents.
Wachovia provides comprehensive training to both new and existing staff members, the ultimate aim being to create trade specialists by upgrading their existing skills. The bank provides professional examination subsidies for staff to help each individual gain internationally recognised qualifications such as certified documentary credit specialist (CDCS) endorsed by the International Chamber of Commerce. "Wachovia has the highest percentage of CDCS qualified staff in the field of trade documentation. This explains our capability in providing unrivalled expertise," Mr Lee says.
"Our global client base also means we have in-depth country knowledge when dealing with specific documentation areas. This field is important for trade document specialists as theoretical knowledge of international trade rules does not suffice by itself. Staff build up their specialist knowledge through hands-on experience," he adds.
Regarding recruitment, Wachovia targets candidates holding a higher diploma or vocational school graduates in disciplines such as trade, supply chain management, business and law. "Our staff receive comprehensive support from an IT expert and the resourceful administrative and human resource departments. Staff who work on shift are entitled to generous allowances. We want people who aspire to become experts in the industry and we provide all the necessary resources for them to succeed," Mr Lee concludes.