Expats in Global Banking System - Essay Example

Topic: Marketing Why Expats Might Be Of Interest to a Global Bank Expatriates, being those who are not resident in their own country, need a lot of flexibility concerning the transfer of money between accounts held in their home country and wherever they may be staying currently. Besides a change in the living structure and the need for other costs previously absent, expats need to settle down in the new country all with the money they have in their home accounts. Paying for services and products in the new country doesn’t only require using different amounts of money but in most cases a new currency needs to be adopted. It thus makes sense to have a bank with a global reach that makes it easy for the expats to access their money in the right currency and amount whenever need arises. Such banks include Barclays, HSBC, Citi Bank among others (Czinkota Ronkainen, 2007, p. 119). One of the main reasons expats would be interested in a global bank is that one can have all the information concerning their accounts at all times. Most global banks offer international accounts accessible from any part of the world. This easiness of information access is one reason expats need to consider global banks. They get to know all the charges incurred in all the transactions they make on their accounts. Another reason a global bank is the right choice for expats is that they have the added advantage of not only accessing their money whenever they need it, they also get it in whatever currency they desire. Due to the bank’s global reach, exchange rates are also deemed to be reasonable as they are normalized all across its branches (Czinkota Ronkainen, 2007, p. 77). It also occurs that due to their large sizes, these banks have the luxury of offering the best exchange rates on the market since they enjoy economies of scale. They thus make profits depending on volume and not exorbitant rates. The expat also gets to build their banking reputation with the given bank thus improving their credit ratings. This is most important when one requires a loan to finance a given project in the new country but is short of funds. Since they have good credit ratings with their banks, they easily qualify for loans without much of a hassle. It is a great way of getting things done. A great advantage with having a global bank is that most of them offer a safe haven for one’s cash. Due to these banks’ sheer size, they are very reliable in terms of the safety of funds. Most of them have been in operation for more than a century and have this most enviable reputation for dependability. Their big sizes also offer excellent ways for tax efficiency given that they mostly normalize their operations across all branches the world over. It is thus to the benefit of the expat to have such an institution at their service whenever they travel around the world. Besides offering peace of mind, these banks enable the expats focus on other matters while they take care of the monetary matters (Czinkota Ronkainen, 2007, p. 103). Financial Services That Might Interest Expats Living in Hong Kong and Singapore C5.2 tabulates countries, according to rank, basing on a few selected factors. Among them is the longevity of residence in a foreign country, earning and saving for the expats, the luxury facilities in these countries available to the expat and the cost of accommodation compared to the expats’ domicile. The financial services that would most interest an expat are the earning and saving capabilities, the availability and affordability of luxurious facilities and the cost of accommodation. The expats’ ability to earn and save money in the new country is of great importance. This depends greatly on the cost of living. If the cost of living in a country is low compared to the amount of money to be earned as an expat working there then that country is deemed to attract a lot of foreigners working and living there. India, Singapore and Hong Kong have the highest rating in this area owing to the low living costs on their residents. Since most expats come from very expensive countries where they save so little compared to what they earn, these countries are good places for them. Luxurious facilities, which include the ownership of more than one property, access to private health care, children’s private education and the owning of a swimming pool with employed staff are of great importance to expats. Most compare the ease of having these facilities in the new country to their domicile (Czinkota Ronkainen, 2007, p. 44). The United Arab Emirates scores highly in this area mostly due to it being a business hub with lots of items changing hands. This ability to have luxury for an expat draws many of them to new countries with the dream of acquiring them. It is no surprise therefore that most expats are business people who have the need for staffing their quarters while they take care of their businesses. A third financial service keenly scrutinized by would-be expats is the accommodation. This is in terms of the cost of renting, buying or building a place to live. It is among the living costs but it is individually very important. It is to the expats’ advantage to have quality living at an affordable price. For those expats who aim to build a home in the new country, factors like the cost of purchasing building materials, hiring builders and land rates can’t be assumed to have no impact since they have; and a big one as such. While India has a good pay to saving ratio, it attracts less expats compared to Singapore due to its poor living conditions. It is thus a most delicate balance that gets to bring in more and more expats to a foreign country. To attract expats therefore, a country needs to have good earnings, saving, affordable luxury and quality but affordable living. Singapore balances all of these factors thus giving reason as to why many expats stay there. How FI Might Assist an Expat Family with the High Cost of Raising Children Financial institutions possess lots of information that is usually of great importance to expats to foreign countries. With such information as the cost of living and currency exchange rates in foreign countries, these institutions place the expat at a great advantage in enabling them smoothly deal with the new environment. It is better to have knowledge concerning what one is expected to have and do in the foreign land to avert cases of heavy penalties due to ignorance. Financial institutions, due to their having information, could greatly help an expat family deal with the high costs of raising children. They can do this by offering the family a plan for example that includes reduced medical costs. The expat family thus gets to spend less on child care compared to not having had the information. Since children need accommodation as much as adults, financial institutions that have links to real estate companies can connect expat families to them companies and strike a deal that will save on the accommodation costs. Travelling costs could also be greatly reduced with plans offered by most financial institutions. These travel costs include taking children to school and to health care facilities (Czinkota Ronkainen, 2007, p. 77). A global bank like Barclays can help an expat to the United Kingdom decide between purchasing or hiring a vehicle. Whichever option is cheaper in that country will usually be chosen. If for example there arises need for a caregiver then the parents are most likely to have help extended their way by the financial institution both in terms of hiring the caregiver and taking care of the costs on the parent’s behalf. It becomes cheaper since the institution will most likely get the expat family the cheapest option. On the part of education for the expat children, financial institutions with good knowledge of the available options for funding their education are usually very handy. The parents get to choose on the most affordable and quality schooling available. It is expected that the financial institutions have solid knowledge concerning the new country’s education curriculum. The parents thus get informed before making a choice. Financial institutions also become of great use in reducing the education costs when they provide special packages for funding the children of expat families. It is a common happening that most countries have special learning packages provided for them by either the government or available financial institutions (Czinkota Ronkainen, 2007, p. 109). The other use of financial institutions to expats in reducing the high costs of raising children would be easing the relocation process for the family if need be. This is occasioned by the fact that financial institutions have the information about how to go about this in the most efficient manner. The Implications of Expats’ Experiences in Europe for Financial Services European destinations are relatively costlier compared to their Asian counterparts. This stems from the fact that most European countries have high taxation levels thus put a strain on expats who go there. Most European nations in the survey carried out have low earnings to savings ratio. It either means there are low wages offered or high taxes are charged with the effect of eating into one’s salary so much little is left for saving. Ownership of luxurious facilities is also on the low in Europe than any other place. This too is due to the existence of high taxes compared to the salaries earned. Little money is thus left to enjoy the luxuries available. High accommodation costs are also observed in most European countries like Germany. This discourages expats from choosing these countries as places to go to for business or other reasons (Czinkota Ronkainen, 2007, p. 200). References Czinkota, M and Ronkainen, I., 2007. International Marketing. New York: Cengage Learning. Read More