The ability to understand regulatory changes and compliance is now a distinct competitive advantage in winning financial institution (FI) business, believes Richard Yorke, executive vice-president and head of the international group at Wells Fargo. "The compliance piece is not a business hindrance."

 

In Asia where FI clients are moving to consolidate banking relationships, he says that Wells Fargo has been able to win business as a result of its compliance programme. "Customers are choosing banks that are able to show better compliance standards." Apart from issues relating to Wachovia, which the bank took over at the height of the 2008 global financial crisis, Wells Fargo's legacy business is one of only a few international banks that have avoided penalties imposed by the regulators.

 

Yorke notes that international banking is going through a structural change and the partnership model is gaining credence. This especially holds true now that banks, faced with the increased cost of doing business and the regulatory burden, are focussing back to their home markets. He explains this fits into Wells Fargo's partnership model, where in the international markets, it does not do local-local business. "We are not seen as a competition to the local banks," he points out. "We have been able to grow our business 3x faster in a down cycle than up."

 

The bank is three years into its build-out of its international business, which is around the network of the former Wachovia. While it continues to maintain relationships in the FI space, where Wells Fargo has a long history in providing services such as payments, trade, foreign exchange and deposits, it is deepening them to now encompass securities, debt capital markets, interest rates, factoring and asset management.

 

Wells Fargo's international push also includes global banking servicing commercial banking and corporate customers. Commercial banking are US customers with sales turnover of from US$20 million to US$500 million with requirements in the international market. The bank is also targetting international investment-grade customers looking to expand into the US market.