Managing global uncertainty with borderless banking solutions

International trade has always had its risks. Lately, those risks have felt more intense, more interconnected, and harder to predict. Increased tariffs, a recent devaluation of the U.S. dollar (USD), a trend toward bilateral trade deals, and geopolitical conflicts have created unnerving conditions in global marketplaces.

These volatile conditions have created unexpected issues for companies trading across borders and are particularly challenging for corporate treasury professionals, who strive for stability.

Conventional financial tools aren't enough to face these challenges. Businesses need stable, resilient conditions to help them manage liquidity and mitigate risks effectively. This is a time to turn to banking partnerships that can deliver reassurance and concrete solutions to complex problems, reintroducing some of the stability that has been lost.

Solutions like borderless banking anchored by U.S.-based foreign currency accounts enable businesses to manage a variety of non-USD currency accounts from within the U.S. and are emerging as an innovative tool to fight volatility, reduce risk and protect liquidity.

What is borderless banking?

Borderless banking is a new paradigm for international finance. It allows companies to manage global operations – across currencies, payments and trade – from a centralized U.S. platform. Unlike traditional models that require in-country accounts and fragmented banking relationships, borderless banking consolidates these capabilities under one roof. It’s a strategic shift that simplifies compliance, accelerates execution, and enhances control – without sacrificing global reach – all under the regulatory stability and operational simplicity of a U.S. financial institution.

Managing core risks in a fragile market

Beyond recurring internal quality assurance, pre-shipment inspections can help shield a business from international product risk. These inspections reduce the risk of shipping or receiving defective product while diminishing risk linked to internet commerce (such as phishing and fraud).

Borderless banking offers companies a strategic advantage in managing both of the major categories of risk they face when doing business globally – each layered with its own nuances.

Currency controls are a risk during volatile times. Countries in turmoil often introduce strict measures to keep money within their borders. This can lock corporate funds and complicate cash management. We've seen this in the past in countries as diverse as Venezuela, Argentina, Nigeria and China, in response to a mixture of macroeconomic and political pressures.

Sudden restrictions like these complicate cash management and increase costs for companies holding cash balances outside the United States. Assets can turn into liabilities overnight, which can be especially impactful for smaller businesses that need this cash to fund their working capital.

Supply chain disruptions compound these liquidity issues. In the last few years, we have seen the pandemic, geopolitical tensions, and now tariffs trigger widespread operational chaos. A notable example was the 60% reduction in Los Angeles port activity earlier this year in response to tariff-induced trading disruptions. That demonstrated how quickly changes can ripple through global supply networks, necessitating a shift in sourcing decisions. In response to the U.S. tariffs, for example, Nike announced plans to reduce its reliance on China for manufacturing. This shift is expected to result in a cost increase of approximately $1 billion for the company.

Companies that rely on just-in-time inventory systems have especially vulnerable supply chains. They have scrambled to secure alternative sources or have taken on extra inventory as a buffer. Today, supply chain models are being rethought and designed to be more resilient to shocks, levering working capital and structured trade finance solutions.

Front-loading inventory stresses cash flows, especially for Small and Medium-Sized Businesses (SMBs). It spikes working capital requirements, which traditional credit facilities aren't always equipped to cover. Tariffs are a double whammy for working capital because they also drive-up prices and increase logistical expenses. Given the recent weakness of the U.S. dollar (USD) by over 10% in the first six months of 2025, this creates a triple whammy for importers.

A framework for strategic response

Together, these core risks underscore the urgent need for companies to reassess and strengthen their international financial strategies. That calls for a strategic response, involving both external partnerships and changes in banking structures.

Businesses can pursue stability by selecting banking partners that support systemic resilience. Comprehensive hedging strategies covering foreign exchange, interest rates and commodities can significantly mitigate financial vulnerabilities. Regular stress-testing of financial arrangements against multiple simultaneous shocks is an essential part of risk management.

Flexibility in supply chain management has become crucial, and a centralized U.S.-based borderless banking solution can support that agility by reducing friction in cross-border payments. Strategies such as onshoring, nearshoring, or using regional trade blocs (also called “friendshoring”) can enhance supply chain resilience. Supply chain financing programs can also support businesses with working capital during disruptions.

Lastly, consolidating liquidity and improving visibility across global operations is vital. Companies can benefit from multi-bank reporting systems to ensure real-time insights into global cash positions. Centralization is also a powerful tool against liquidity issues. That means consolidating global liquidity to the U.S. and centralizing treasury management activities. Overlay strategies for USD have long been employed to centralize and control U.S. dollars, and now companies can do this in other currencies as well within the United States.

How a borderless banking architecture helps

At U.S. Bank, we help businesses meet these challenges with borderless bank accounts and supply chain finance solutions. FCAs enable the borderless banking capabilities, allowing companies to hold and transact in more than twenty currencies while the funds themselves are physically located in the U.S. and compliant with and safeguarded under U.S. banking regulations. This approach simplifies international cash management by enabling businesses to manage global currency operations and exposures in the United States, simplifying complex offshore structures typically required for cross-border financial activities. It also offers nimble account opening, liquidity protection, along with the safety and stability of a fully U.S. regulated, FDIC-insured bank.

Borderless banking enhances payment processes through the centralized and transparent execution of international transactions. Businesses can pay directly from their U.S.-based accounts while accessing the relevant local clearing channels such as SEPA in Europe and Faster Payments in the UK, or even CHATS in Hong Kong, reducing complexity and increasing control. In fact, the businesses can also be paid by their own clients in Europe/UK via the use of virtual IBAN numbers. In a sense, these borderless bank accounts look and act like local in-country accounts but with the safety, simplicity and efficiency of a U.S. bank account. Supply chain finance solutions also help businesses maintain operational continuity during disruptions by stabilizing cash flow, ensuring liquidity and payment flexibility, and strengthening supplier relationships with global partners.

Additionally, FCAs can provide a contingency payment capability – offering a reliable fallback when traditional banking channels are disrupted. Whether due to geopolitical instability, local banking outages or market volatility, businesses can continue executing critical payments from their U.S.-based FCA infrastructure. This built-in redundancy helps ensure operational continuity, even when in-country accounts or local partners are temporarily inaccessible. Beyond resilience, this model offers additional advantages over traditional in-country accounts, including faster onboarding, simplified regulatory compliance backed by U.S. laws, and seamless integration with existing financial systems.

While borderless banking provides the infrastructure for global operations, global liquidity solutions are a key pillar within that framework – focused specifically on optimizing cash visibility, control, and consolidation across currencies.

At the heart of this capability is the FCA. These U.S.-based accounts not only enable international transactions – they also serve as centralized liquidity hubs for non-USD currencies. This allows clients to manage global cash positions more efficiently, all from a single, U.S.-regulated platform.

Traditionally, overlay structures like physical pooling have enabled companies to centralize USD liquidity across jurisdictions. Now, FCAs extend that same power to multi-currency environments, including EUR, GBP, and others. Clients can consolidate surplus balances across currencies, improving working capital efficiency and enabling more agile foreign exchange strategies.

This centralized model enhances:

• Liquidity control across global operations
• Risk management through consolidated visibility
• FX flexibility, allowing companies to hedge or convert based on real-time needs

These factors may change over the course of a trade relationship, impacting trade partners at several points of the supply chain.

An implementation roadmap

Banking without borders should be part of a broader resilience portfolio. At U.S. Bank, we look at the implementation in three phases:

Plan

Adoption of borderless banking starts with planning and research. Begin by mapping and quantifying your international exposure risk and employing rigorous stress tests across various scenarios. This initial assessment will help you set a road map with clear triggers for strategic shifts, guiding your decisions in periods of uncertainty. Leverage the 80/20 rule in this assessment. Not all accounts can or should be replaced by accounts in the USA. For example, certain countries require in-country capabilities for tax or payroll purposes (e.g., Mexico). Your banking partner should be able to help guide you with what is possible but ultimately companies should assess this against their own tax and legal advice.

Execute

Putting planning into practice involves a mixture of technical and organizational tasks. Integrate U.S.-based FCAs with existing Enterprise Resource Planning (ERP) and treasury management systems. Run change management programs that include appropriate training for treasury teams, enabling them to adapt smoothly to new processes. Centralized banking arrangements will give you more visibility into your finances and more control over liquidity.

Monitor

Finally, building internal capabilities and organizational resilience is key. After execution, explore continuous monitoring and portfolio rebalancing based on evolving risk landscapes to ensure that you're always attuned to what's happening and prepared to pivot where necessary.

Develop in-house expertise in international risk management and establish agile cross-functional response teams. Externally, look at forming strategic partnerships with specialized service providers to help you adapt to new global challenges. One important strategy is to implement global forecasting and stress-testing capabilities. These can easily be plugged-in via your banking provider or directly with a treasury management system provider. Costs for these capabilities have dropped significantly in the last few years, making them more accessible for smaller businesses.

Lean into a volatile future

Businesses must acknowledge that the ongoing changes in economic policy aren't just an aberration; they're a seismic shift that will remap the economic landscape for decades to come. The implications are profound.

Smart companies are not only reacting quickly to immediate challenges but also responding to this longer-term change by rethinking their capabilities. They are asking questions about their financial visibility, their ability to adapt in the face of volatile events, and their resilience to unexpected changes.

Flexibility and central control are both important characteristics in this new environment. They will help businesses in areas ranging from liquidity management and foreign exchange risk management to supply chain volatility.

Companies that get this right stand not just to protect themselves in a new, volatile world but to prosper. They will become 'anti-fragile,' moving beyond mere resilience to become more competitive as others fall behind in a disordered world. Innovative solutions that provide a bedrock for financial management will be a crucial part of the equation.

Doing business today requires a global perspective and a partner with the expertise to help you manage international payments and mitigate the impact of volatile exchange rates. To determine if borderless banking solutions would benefit your business, contact your U.S. Bank representative.