When it comes to the midcaps in our country, KBC Corporate Banking aspires to be the undisputed benchmark. The international network that the bank is building up for that purpose focuses on its home clients, guaranteeing them maximum added value.
He continues to find it a source of puzzlement: ‘Do you have an office in New York too, entrepreneurs sometimes ask me. As though we could mean much to medium-sized and large SMEs in this country if we weren't represented abroad.’ Wim Eraly is Senior General Manager of KBC Corporate Banking and for him it's straightforward: 80 percent of Belgian GDP is intended for export. That means that virtually any firm with growth ambitions has to cross the border sooner or later.
Even if they lack a foreign establishment of their own, most of our midcaps are international in outlook. And so we are too.
The countries where KBC provides support have been carefully selected in the interests of our home clients. With four branches in Europe, three in Asia and one in the US, KBC is able to assist the majority of its Belgian clients. Compare the KBC network with the countries to which Belgian companies, according to the International Trade Centre, export the most, and you find a striking match: ‘Once our Italian branch is opened as well, we will have a presence in seven of the ten most important Belgian export destinations. We are present where it counts.’
Exclusively for home clients
Even more important than the precise location is the focus of these foreign establishments: they are solely designed to help clients from the home market. No KBC capital is invested in lending to local clients. Wim Eraly therefore calls the establishments ‘dedicated’. ‘The key point of our commercial strategy,’ he explains, ‘is that we want to excel when it comes to customer experience. We want in other words to be the most client-centred corporate bank in Belgium.’ Knowing the client is the cornerstone of the strategy: ‘I think it is fair to claim that we know our clients better than the competition do. We don't just want to know the client itself and what it does, how it works and who the managers are. We also want to be familiar with the market and the ecosystem in which that client operates, we want to know who its peers and its competitors are.'
In order to realise that ambition, the foreign establishments are on an ideal scale. The teams consist of 50 to 60 people, and a maximum of 80 or 90. In the US KBC has a staff of 60. ‘The teams are big enough to provide our clients operating in that country with the support they need,’ states Eraly, ‘but not so big as to need separate governance. For that reason, and also because they act exclusively for clients operating from or to the home market, our foreign staff remain focused on the home country, so that we are able to offer our clients a genuinely integrated network with short lines.’
The integration is a reality at all levels. Staff in a backoffice in Louvain will seek direct contact with a counterpart in Hong Kong, should that be required for a detail in a documentary credit. But the same also happens in respect of more strategic topics at management level. At least twice a month the general managers of the Belgian regions hold a meeting with their American, European and Asian colleagues, at which they exchange information and knowledge about their clients. ‘Fortunately, thanks to Skype and other forms of technology, they don't have to do get on an aeroplane each time in order to meet up.
Furthermore, short lines apply not just to colleagues abroad but also to the decision-making centre. Unlike our competitors, we have our decision-making centre in Belgium. Where necessary, we can team up our clients with the decision-makers. That too is a way of making a difference.'
We already know you
Needless to say a foreign establishment is also more than just a copy of a Belgian branch. Doing business abroad is, after all, not quite the same thing as doing business in Belgium. The added value lies not just in the customer experience but also in the expertise it is possible to offer in relation to the country.
The result of that close domestic/foreign integration, translated into added value for the client, is called ‘convenience’: ‘The client never feels that it needs to build up a new relationship with our people abroad. It is simply the same relationship that we already have with our clients here, which we then extend to other countries. Whether a client gets in touch in Hong Kong or Kortrijk… there's no need for it to explain all over again who it is, what it does and what it needs. The people it deals with are already familiar with it.’
Apart from expats the foreign branches also employ local people: Americans in New York, Asians in Asia, Germans in Düsseldorf. ‘These are people who can explain the specific nature of the local market to our clients wanting to do business there. Providing security in the US is very different from doing so in Belgium. In the Netherlands it is different again.’
Apart from the knowledge of the client on which an integrated approach is based, an excellent customer experience also depends on something else again. In Eraly's story it's called ‘personal’. The client needs to have various points of contact of a personal nature with the bank's team. The bank can only really mean something to the client if the latter's staff maintain personal relationships with various employees of the bank who are able to answer any questions, both big and small. ‘And conversely we also need to have various points of contact at the client: we must be able to speak with the CEO but also with the man or woman in the back office, when that's necessary. We want personal contacts that make a difference.’
Whether a client gets in touch in Hong Kong or Kortrijk… there's no need for it to explain all over again who it is, what it does and what it needs. The people it deals with are already familiar with it.
The close and personal operational cooperation of the KBC teams with the client additionally generates better solutions. ‘We work on the basis that we can be smarter together,’ states Eraly. ‘Since we follow the entire "machinery" of our client at such close quarters, we can also respond to its needs more quickly and precisely.’ KBC has always been proud of its strategic service provision, but in recent years a great deal of tactical advice has also been developed in the field: ‘We have for example observed that clients are often concerned whether they will be able to release enough cash. For this reason we make a particular point of working capital optimisation. That straight away creates all sorts of fresh opportunities for the client.’
Quality of the relationship manager
Needless to say the relationship manager is at the heart of the relationship with the client. He or she is the one who oversees the relationship as a whole and coordinates the team, who puts the client's people and KBC staff in touch with one another and who is the first to be contacted if something unexpected happens. As part of the ‘personal’ concept, a client relationship extending to other countries always involves an operational collaboration between the bank's team and the client's team. ‘I would be the last person to underestimate the importance of the relationship manager,’ Eraly adds, ‘for we have first-class relationship managers with lots of maturity and experience who can sort almost everything out themselves. I can count on the fingers of one hand the number of times I have been called in order to unblock a situation. But that does not eliminate the fact that the client relationship does not stand or fall by the relationship manager. Clients are highly sensitive to the continuity of the client relationship, and rightly so. But precisely because we place so much emphasis on the whole team, or in other words on personal contacts at all sorts of levels, we are able to promote or shift our good relationship managers to a managerial position without endangering the continuity of the relationship.’
In addition the branches of KBC Corporate Banking in Belgium have not just a front office but also a middle and a back office. This combination means that they are able to cover all the client's needs. It is a striking operational model, which differs from what competitors are doing, in that they often have routine activities carried out by the retail bank's back office. KBC, however, has by now built up years of experience with this model, which is highly conducive to the sharing of knowledge.
By way of conclusion, Wim Eraly briefly summarises KBC Corporate Banking's strategy. ‘We do not aspire to become a Citibank or JPMorgan. What we do want to do is become the benchmark for Belgian midcaps, and to do so by excelling in terms of customer experience. The added value we offer our clients is in many respects less tangible than, say, offering a highly competitive interest rate. But the clients we do manage to convince know that precisely because of that they are able to obtain so much more.’
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