What Is a Financial Export?

Malcolm Tatum

A financial export is a type of business arrangement in which a domestic entity provides some sort of financial services on behalf of a foreign business firm. Sometimes known as offshore financial exporting, this approach essentially calls for a financial firm located within a country to offer its services to businesses that are based in other countries, usually on some sort of contract basis. The idea behind this type of activity is to encourage those foreign companies to outsource some of their basic financial activities such as invoicing and billing, payroll, or general accounting to the domestic firm. In order to accomplish this, the in-country firm will often offer services at rates that are highly competitive with other service providers.

Man climbing a rope
Man climbing a rope

The exact nature of the financial export will vary, depending on the scope of services offered by the provider and the types of services required by the client. One common characteristic is that the services provided will all revolve around essential financial activities that would otherwise be conducted within the organization of the client’s business structure. The concept is viable because the provider is willing to perform the necessary tasks for rates that are well below the costs of managing those same functions in-house. For example, a bank may choose to outsource the management of certain instruments such as mortgages to an offshore company simply because doing so makes it easier to operate the bank with fewer employees and also allows employees to focus more on activities that generate revenue for the bank and less on administrative details.

It is not unusual for smaller nations to make use of a financial export model as a means of utilizing resources within those countries to generate money that helps to fuel the local economy. This is especially true when domestic industry is somewhat limited and providing service and support to companies in other nations is one way of generating jobs for citizens. This in turn lowers unemployment and causes more money to circulate through the local economy. Even larger nations, such as the United Kingdom, engage in a fair amount of financial export, especially as it relates to the banking and shipping industries.

The scope of financial export service and support covers a wide range. Along with mortgages and other types of loans, domestic entities may provide foreign clients with support in managing different types of bank accounts, investments, or just about any other type of financial activity that can be imagined. When considering the possibility of a financial export as a means of reducing expenses, clients should look closely at the experience and expertise of the provider and the ability to mirror the culture of the client when interacting with customers, and generally ensure that the move will produce the desired results without creating any issues that could ultimately damage the client’s reputation or hurt the business in some manner.

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