Forecasts from the US Federal Reserve suggest only a minor interest rate cut this year, which could significantly impact how US-based corporations with subsidiaries in Latin America handle their liquidity.

While nearshoring has benefitted Mexico and the overall outlook remains positive, companies face ongoing risks in foreign exchange and commodity markets. To navigate these challenges, it’s crucial for businesses to work with banks that have specialized regional knowledge and cash management solutions designed for the Latin American market.

Bank of America, recognized for its expertise with awards for Best Bank for Transaction Banking and Best Bank for Collections, has been active in Latin America for 78 years. Their CashPro platform helps companies manage cash more effectively, offering features such as CashPro Search for tracking transactions across multiple data sources, and CashPro Insights for consolidating key data into a single dashboard with actionable recommendations. In Brazil and Mexico, the Intelligent Receivables tool, which utilizes AI for collections and invoice matching, achieves high straight-through processing rates.

Mencía Bobo, head of Global Transaction Banking at Santander, notes that there is growing demand for digital cash management solutions integrated with services like BNPL (Buy Now, Pay Later) and APIs (Application Programming Interfaces). Santander, which won awards for Best Bank for Cash Management, Best Corporate Cross-Border Payments Solution, and Best Bank for Payments, leverages APIs to enhance integration with clients’ systems and streamline the adoption of new technologies. These APIs facilitate automation, personalized data exchange, and more efficient processing of payments.

Bobo highlights how APIs and B2B2C (business-to-business-to-consumer) models are transforming how large corporates in Latin America engage with small, often unbanked, retailers. By embedding financial products into loyalty apps, B2B2C models support the financial inclusion of small merchants and drive profitable growth, improved sales, and increased customer loyalty.

Latin American companies are also seeking banking partners for enhanced liquidity management and treasury services. Citi, awarded Best Bank for Long-Term Liquidity Management, provides solutions like cash concentration and pooling to optimize cash flow across subsidiaries. Additionally, the Americas Trade and Investment Act (Americas Act), introduced in the US Congress in March 2024, could potentially expand US-Mexico-Canada Free Trade Agreement benefits and provide up to $70 billion in loans and grants to support nearshoring. Although the bill faces challenges in an election year, it represents a potential step towards greater inter-American economic collaboration and resilience.