BAFT 2003 Annual Meeting

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(No Transcript)
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Bridget-Anne Hampden
Chief Information Officer Corporate
Investment Banking Wachovia Corporation Technology
Trends in International Banking
Presented at the Bankers Association for
Finance and Trades81st Annual MeetingThe
Global Marketplace-At the Crossroads May 4-7,
2003The Arizona Biltmore, Phoenix, AZ
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Table of Contents

• Wachovia Overview
• Wachovia International Banking
• Challenges in International Banking
• Using Technology to Help Meet the Challenges
• Summary

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Wachovia At-a-Glance
The 9/1/01 merger of First Union Corporation
Wachovia Corporation created a new entity
retaining the name Wachovia Corporation
Management G. Kennedy Thompson, Chairman,
CEO President Headquarters Charlotte, North
Carolina U.S. Rankings Largest deposit share on
East Coast 3rd largest share in U.S.
2nd largest cash management provider 3rd
largest branch network 5th largest in
assets 4th largest brokerage firm Total
Assets 334 Billion Loans 158
Billion Deposits 188 Billion Customers 20
million Employees Over 80,000
Wachovia Corporation Headquarters
Investment Banking Offices
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Wachovias Corporate Investment Banking Business
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Wachovia International Division Footprint
A Global Presence
London
Hamburg
Frankfurt
Paris
Milan
New York
Seoul
Istanbul
Philadelphia
Winston- Salem
Beijing
Tokyo
Madrid
Washington, D.C.
Los Angeles
Guangzhou
Shanghai
Dubai
Charlotte
San Diego
Cairo
Miami
Hong Kong
Taipei
Bangkok
Mexico City
Manila
Mumbai
Cebu
Kuala Lumpur
Bogota
Singapore
Jakarta
Guayaquil
Sao Paulo
Johannesburg
Sydney
Santiago
Buenos Aires
International Processing Centers
Offices
Overseas Branches
Global Government Banking
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Wachovias International Business Keys to Our
Success

• Over 245 years of serving the needs of our
  corporate customers
• and the needs of our foreign correspondent
  banks
• (over 7,000 foreign correspondent banking
  relationships across 130 countries)
• Business strategy centered on operating as
  Partner not Competitor
• Maintain a major focus on two core business
  competencies
• Correspondent Banking
• Trade Services
• Highly responsive global customer service
  capabilities
• Same Time Zone Availability
• Local Language Support
• Strict Turnaround Performance Standards
• Solid reputation as an Innovative Solutions
  Provider in the markets we serve
• Technology.Technology.Technology

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International Business Lines A
Multi-Dimensional Product Array

• International Correspondent Banking
• U.S. Correspondent Banking
• Global Trade Services
• Trade Outsourcing
• Global Government Banking
• Structured Trade Finance
• International Treasury Services
• Currency Risk Management Services

Trade Outsourcing is a good example where the
technology being deployed in support of Wachovia
trade services customers was combined with a
strong trade services operations core competency
within the bank to create a new business line
where Wachovia provides private-label trade
outsourcing to other banks.
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Technology Challenges
Lack of standards
Paper-intensive transactions
Varying technological sophistication /
availability
Real-time information needs
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Technology Answering those Challenges With

• Internet and web-technologies
• Masks many of the sophistication / availability
  issues
• Supports real-time delivery of information to
  multiple devices from the computer to the PDA,
  cell phone, etc.
• Brings standardization through the use of
  ubiquitous technology
• Messaging standards
• Emergence and greater adoption of XML and
  messaging protocols
• Transport / Translation Technology
• As an example..IBMs MQ Series allowing the
  linking of customer ERP systems to the banks
  trade services product suite

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Typical Trade Services Environment

• The Letter of Credit is embedded in a process
  that involves various paper documents, a
  continuous information flow, and ultimately funds
  movement.

Purchase orders
Importer (applicant)
Exporter (beneficiary)
Payment
LC
Presentment Docs.
Discrepancy Info.
Discrepancy Info.
Presentment Docs.
LC Info.
Payment Info.
LC (MT700 / MT701)
Discrepancy Info. (MT734)
Payment (MT202)
Presentment Docs.
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Applying Technology to the Trade Services
Environment
The Web browser replaces the manual functions for
the exporter as they manage information. With
technology, the exporter gets paid days earlier.
MQ, XML and the Web browser replace the manual
functions. PO data is sent electronically as
well as, discrepancy information.
X
Purchase orders
Importer (applicant)
Exporter (beneficiary)
Payment
LC
X
X
Presentment Docs.
Discrepancy Info.
Discrepancy Info.
Presentment Docs.
LC Info.
Payment Info.
LC (MT700 / MT701)
Discrepancy Info. (MT734)
Payment (MT202)
X
Presentment Docs.
Images and digital data replace the physical docs
required before payment.
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Serving Beyond the Traditional Banking Role in
Trade Services
Internet

• Technology enables Wachovia to step past the
  traditional fiduciary role into providing
  value-added services to all trade services
  parties.
• Value-added services include
• Reduced costs
• More timely information exchange
• Improved cash flow
• Basis for standardization

Exporter
Importer
Inspection
Freight Forwarder
Shipper / Air Freight
Customs Agents
Internet
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Summary

• Wachovia has a tremendous history in
  International Banking that dates back to the
  earliest days of US banking.
• The recent challenges of serving an International
  Banking division included
• Customers in countries with varying levels of
  technology sophistication
• Many traditional commercial transactions heavily
  reliant on paper
• Transaction processing moving to a 7 x 24
  operating model
• Customers requiring more real-time information
• Overall lack of message standards beyond SWIFT
  making straight-thru processing more difficult
• Technologies including the Internet / web
  technologies and image / electronic document
  management coupled with protocol message
  standards are all but eliminating many of these
  historic challenges.
• As depicted in the Letter of Credit example, the
  huge cost of integrating this community of
  trading partners, banks, and 3rd parties of each,
  drives us to seek refuge within the inherent
  openness of the Internet and its ability to
  integrate with other technologies such as image.
• Lastly, the fusing of these technologies with
  other core competencies are not only improving
  the way we serve our International corporate
  customers and foreign correspondent banks, but
  also creating entirely new Business Lines as
  Wachovia leads International banking into the
  21st century.