Insider Q&A: Beyond Tariffs and Disruption - Streamlining Global Trade in a Volatile Market

The global trade landscape presents a complex web of challenges right now. Heightened geopolitical tensions, tariffs, trade disputes and supply disruptions are just some of the key threats that can disrupt the flow of goods and impact end-to-end networks. Optimized international transactions have become table stakes, but not all organizations have the technology infrastructure in place to automate and streamline the traditionally cumbersome trade finance process.

From his South Florida vantage point, Michael Walker, executive director, middle market banking at Synovus, says organizations are increasingly turning to their banking partners for help navigating the complexities of global trade. “South Florida’s economy thrives on global trade and business,” says Walker. “Synovus manages both domestic and international banking services and provides the expertise companies need when managing relationships across the global economy.”

Tariffs are an especially hot topic right now in the market, not just here in the U.S. but also in many other countries around the world. To address this challenge, organizations are assessing the potential financial impact of the tariffs and figuring out how to pass the costs along to their own customers. And if those customers can’t or won’t absorb those increases, companies are looking closely at how the tariffs will impact their own profitability.

“Companies are also looking at sourcing and/or manufacturing options in alternate countries, where the tariffs are lower or non-existent,” says Synovus’ Head of International Banking Jeffrey Beisler-Snell. Unfortunately, this introduces a new set of risks as companies seek out reliable suppliers operating in unfamiliar regions. For help, companies are turning to banking partners like Synovus, which can help them address and manage those and other risks while also streamlining their interconnected, global supply chains.

In this Insider Q&A, Walker and Beisler-Snell discuss the current risks companies are facing, the role of regional banks in the global supply chain space, and how these trusted partners can help decrease risk through better visibility and financial tool automation.

Q: What’s the general sentiment about global trade among business owners right now?

A: Companies are looking for more automation, less paperwork and a more digital experience. This has been a challenging transition for trade finance, which has historically been a paper-intensive business when it comes to documentation and the sharing of information with financial institutions and trading partners. We’re now noticing that companies are looking for technology that makes things easier and allows them to focus on managing their business, versus worrying about how to manage their banking transactions (e.g., trade finance products).

Q: How are financial institutions like Synovus responding to the transition to digital global trade?

A: That technology piece is becoming important because it makes our customers more efficient and banks more efficient as we handle transactions. It makes the entire process more efficient as other financial institutions around the globe also look to digitize the international trade experience. This has been a trend for the last few years, and it’s definitely intensifying now.

Customers tell us they really want visibility into where things are. Where the historical model may have been, “I need to reach out to my bank and my bank needs to reach out to another bank,” this approach is time-consuming and manually intensive. It also impedes visibility, which is a critical aspect of helping companies be more efficient in the global trade environment.

Q: Has the current global trade situation affected demand for logistics-related banking products and services?

A: As the focus on risk becomes more prominent—something that usually happens in volatile, uncertain environments—organizations are thinking about how to manage risk related to trading partners potentially running into trouble and being unable to pay their bills. With this in mind, they’re looking for ways to manage the risk and guarantee receipt of payment. There’s a wide variety of trade finance instruments they can use to achieve this goal depending on their risk tolerance.

The more risk that a company has taken on, the more control it will want to put around that risk—namely by putting a risk management plan in place. In terms of typical banking products, letters of credit are becoming increasingly important for obtaining guarantees from a financial institution to “guarantee” that payment. This is one popular tool that ensures a higher level of comfort for trading partners doing business with each other

Q: How do regional banking players like Synovus help businesses navigate the ins and outs of global trade?

A: In today’s volatile supply chain environment, it really starts with the consultative approach. Our local relationship managers enlist the help of subject matter experts (SMEs) who are talking to our customers around the clock. Synovus uses this relationship approach to guide companies through the situation at hand. Sometimes we’re providing guidance and advice, for example, and in other scenarios we’re talking to customers about best practices for their companies and industries.

Our Accelerate Trade Platform gives customers visibility and control over their global trade instruments, including letters of credit and other important documents. This gives them control over where a transaction is at any given time (which is important if you have people around the world working on trade finance transactions). Companies can log in anytime and see exactly what’s happening at that moment wherever they are in the world.

Q: How does the Accelerate Trade platform help companies conduct business in a seamless, safe and secure manner?

A: Accelerate FX and Accelerate Trade provide one seamless, automated and transparent experience for customers, who use one sign-on for all of their international transactions. They can manage their global payments, foreign currency accounts and trade finance transactions in one place. A lot of financial institutions try to do that, but generally the end result is a very disjointed experience.

Accelerate Trade unifies the entire process on a single platform that all authorized users can access. On the automation side, companies want to automate their payables and receivables globally. The platform does this for them—starting with wire payments and going all the way through trade finance transactions. This allows companies to spend less time banking and more time running their business.

Q: How does the platform help minimize data security risks associated with global transactions?

A: As I mentioned before, global trade is pretty paper-intensive and always has been. Companies work with physical documents and email; manually fill out paperwork; and then send that information to the bank via mail or email. Email also increases the risk of hacking, phishing and other cyberthreats that can put companies at even more risk.

Synovus helps them avoid those challenging situations and reduce risk with secure log-ons. Accelerate Trade also lets companies manage their workflows and requires more than one user to approve or release a transaction. And if someone needs to edit a transaction, the platform requires approval from a different individual, effectively preventing internal fraud as well.

Q: Does Accelerate Trade enhance visibility and tracking of international shipments and transactions?

A: Yes. Companies submit information electronically and communicate with Synovus electronically. The platform gives them a direct connection to the bank, in addition to being able to upload beneficiary information and manage beneficiary details and letters of credit. It also saves templates for future use, which helps reduce the amount of time it takes to create and submit documents. From a total visibility perspective, the platform shows companies the current status of all transactions. They know when payment has been initiated, for example, and they can track it from beginning to end.

Q: Can Accelerate Trade handle documentation and compliance requirements for various countries?

A: Yes. The platform connects to systems that reveal restrictions in terms of what can be traded and whether a certain product is sanctioned by a particular country. Our platform automates that process and gives companies peace of mind that they’re adhering to all regulations on a country-by-country basis.

Q: How does the platform manage currency exchange and payment processing for cross-border transactions?

A: Our customers can upload a bulk number of payments in a single file, and in all 120 currencies. This simplifies payment initiation and allows companies to automatically lock in foreign currency rates through the platform. From a foreign exchange perspective, this gives companies much more control over how they manage their foreign currency risks.

Q: Why should companies consider working with a regional banking partner and using a platform like Accelerate Trade?

A: The environment is very volatile right now and isn’t expected to “normalize” anytime soon. Changes are happening all the time and companies have to put a solid plan in place not just for today, but also for tomorrow, six months from now and 12 months from now. This is just one of the many reasons why now is the right time for businesses to explore the entire logistics process from end-to-end and leverage the most current, relevant global finance tools that are available.

This will not only help streamline international supply chain operations, but it will help shield companies from the potential risks that are lurking out there. The best approach is to stay proactive when planning for the inevitable: changes are going to happen. By partnering with a regional bank and adopting platforms like Accelerate Trade, businesses can build a resilient, future-proof framework that anticipates and navigates the ever-shifting currents of global commerce.

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