It seemed an odd location for a trade processing centre. For years Wachovia quietly operated its centre on the fringes of Hong Kong's high-rent Central business district, complete with sweeping views of the harbour. Today more than 300 staff work round-the-clock to process letters of credit for Wachovia's global network of correspondent banks and their clients, in what has grown to become the bank's largest international branch.
Wachovia's relatively low-profile branch is perhaps appropriate for a North Carolina-based bank that is little known outside the United States, despite being America's fourth-largest lender with assets of just over US$500 billion and the world's eighth-largest bank by market capitalisation. It also challenges some long-held assumptions about Hong Kong's core strengths.
While an increasing number of service companies have been relocating back-office operations to Guangzhou or other low-cost overseas locations, Wachovia's experience suggests that the SAR's talent pool is underestimated and its cost base not prohibitively expensive for such operations.
Swamped by the paperwork involved in issuing and cross-checking letters of credit on behalf of large US retailers sourcing from China, Wachovia invested about US$10 million in scanning technology. Documents were digitised and checked online. The system was so efficient that the bank realised it could offer this capability to other banks and now does so for about 70 correspondents. Wachovia, for example, can process trade paperwork for Swedish retailers, their Scandinavian banks and China-based suppliers. Although it conducts the transaction, Wachovia remains invisible throughout.
'When we first started doing imaging technology here it was only for the back office,' says Steve Nichols, Wachovia's Hong Kong-based managing director and head of global trade services. 'A couple of years later we realised we can actually make it available on the web to our bank clients and other clients. We have separate teams working for different time zones. This is a 24-hour operation.'
To service Swedish clients, for example, the bank's small Scandinavian team works a late shift that coincides with business hours in Stockholm and takes Swedish holidays rather than Hong Kong ones. While Hong Kong worked on Friday, January 6, a handful of Wachovia employees had a day off for Trettondedag Jul, or Epiphany Day.
