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PCBB Banc Investment Daily June 28, 2013
Banc Investment Daily
June 28, 2013

Worldwide Exposure

Recently in cities around the world it was time for the annual June event, the World Naked Bike Ride. This international event takes place each year in a number of cities and has grown as pieces of clothing have disappeared. Like a naked flash mob on
???bikes, this weirdness is all over the world. As a bit of history, the first official ride took place in 2004 in 28 cities in 10 countries. The dress code for the ride specifies "bare as you dare" and full to partial nudity is encouraged, but not mandatory. There are costumes and body painting and in general a festival atmosphere. It is uncertain which local club or country exported the idea originally, but it has spread quickly around the globe, taking place in 74 cities in 2013.
Even without taking off all of one's clothing, it seems almost everyone likes the idea of importing and exporting. A recent survey by the National Small Business Association showed 64% of small businesses have sold their products to foreign customers vs. only 52% in 2010. For many of these businesses, exports were a relatively small portion of their business, 10% or less for many. In addition, most were selling to fewer than 5 countries, so this is not overly complicated and is now an important piece of their business.
In addition to the increase in the number of small businesses already exporting, there was an even larger increase in those interested in exporting (from 43% to 63% over the same time period), as long as their concerns were addressed. The primary concern was how to get started and how to get paid. This is where your bank can come to rescue. Small businesses are your customers already so there is a business opportunity for you.
International services can be an important component of the product offerings in community banks, but some banks shy away from providing these services. If your bank doesn't provide international wire transfers and instead refers good customers to larger banks for these transactions, you are jeopardizing your relationships. Just think, if one of your competitor's customers came through your door because there was a service your competitor could not provide, wouldn't you try to steal that client?
Providing international services is not as complex as imagined. Some banks are concerned about Reg E and the new rules around consumer wire transfers. To get involved in international services, your bank will need someone to help you provide the service and as with all out-sourced or partnered product offerings, whoever your bank decides to use is critical. Close behind that, the responsibility of keeping up with all regulatory issues surrounding that service is also critical.
That is why we ask any community banker reading this to give us a call to discuss offering international services to your clients. We aren't a competitor and we have worked with community banks for years in providing international services. Transactions are completed and tracked through an easy-to-use online platform and we will train your staff how to use it. We also take care of the regulatory part so you can help the customer.
Providing international services at your bank allows you to be a resource for small businesses and capture new clients. It also generates fee income for your bank as it keeps customers happy. We prefer to bike in our clothes, so give us a call.