Airline-style alliances in banking look set to take off
The Trade Club Alliance, a new 14-bank partnership to match SME exporters and importers, reflects greater willingness among banks – especially in Europe – to work together against low-cost newcomers, while relinquishing their own global ambitions.
A new digital platform linking banks’ business clients across Europe, Asia and the Americas shows the desire of lenders to forge partnerships in the absence of mergers that might otherwise increase their international scale.
Though its official launch in early October went by without much comment, the Trade Club Alliance (TCA) brings together 14 banks with big national and regional market shares in a common effort to bolster their individual and combined client franchises.
It is, therefore, an important step.
According to insiders, this is the first global banking partnership directly modelled on airline alliances. The specific inspiration is Star Alliance: the world’s biggest airline alliance by fleet size and destinations.
Unlike other cooperation agreements between banks, there is no element of in- or out-sourcing, and the platform is not a business in its own right – both the characteristics in common with airline alliances.
Ultimately, the TCA aims to build on the benefits of the large and established national infrastructures and client bases of its banking partners to fight back against their common enemy of low-cost and legacy-free newcomers.
It does this by widening the partners’ combined global footprint in a relatively low-cost, low-risk manner – specifically, in this case, concerning their businesses among small and medium-sized enterprises (SMEs).