Cash & Liquidity Management

Page 1 of 2

Reflections and Resolutions What lessons can we learn from treasury management trends in 2014, and what can we expect from 2015? We talk to Andrew Reid of Deutsche Bank and gain his expert insight.

Reflections and Resolutions

Reflections & Resolutions

An Interview with Andrew Reid, Co-Head of Cash Management Corporates, EMEA, Deutsche Bank

As the New Year gathers momentum, thoughts turn to the outlook for the next 12 months. Andrew Reid, Co-Head of Corporates Cash Management, EMEA, Deutsche Bank, reflects on 2014 and outlines his expectations for 2015.

What would you highlight as the most significant trends and events of 2014?

Clearly, the social and political upheaval in Ukraine, the devastating effects of extremism in Syria, Iraq and Nigeria, the ebola tragedy in West Africa, and more recently, events in France, have dominated the headlines for some time. These all continue to demand our attention and, where necessary, our support.

Given the uncertainty and volatility these events have created on a macro level, access to comprehensive and timely data has never been more important to corporate treasurers. Banks such as Deutsche Bank are committed to the provision of real-time information to facilitate efficient, automated processes, high quality reporting and analysis and informed decision-making. In tandem, the convenience and sophistication of technology continues to develop, with new market entrants creating opportunities for partnerships and alliances that enable us to support our clients in innovative and exciting ways.

From a transaction banking standpoint, it is impossible to discuss 2014 without reference to SEPA. Following months, indeed years in some cases, of preparation, the SEPA migration end date was a milestone for harmonisation throughout the SEPA-zone. In many ways, however, it is the starting point of the process. Having implemented a common framework for payments and collections across the Eurozone, there is now an unprecedented opportunity to achieve standardisation, efficiency and automation that benefits all market participants. In the past, new initiatives have often been limited to single countries, but the potential for innovation now extends across the Eurozone and beyond, with opportunities, particularly, for multinational corporations.

What are treasurers now focusing on in a post-SEPA environment?

Now that treasurers have achieved SEPA compliance, many are reviewing their cash management and banking structures to simplify and standardise wherever possible.

From a Deutsche Bank perspective, we worked closely with clients in the run-up to SEPA. There were two phases to this – the first being ‘SEPA musts’ – i.e., the tasks that need to be undertaken in order to achieve compliance. The second phase is what we are calling ‘SEPA coulds’ – how to leverage SEPA as a catalyst for reorganisation and re-engineering.

Our clients have been particularly interested in working with us in this area, closely looking at the working capital cycle to identify opportunities for efficiency and value creation.

To support this, we have expanded our working capital advisory group to offer the depth of expertise our clients are looking for. This has resulted in projects to increase standardisation and centralisation, with a growing number of companies implementing in-house banks that make payments-on-behalf-of (POBO) and collections-on-behalf-of (COBO) group entities. We are helping companies to set up these structures and fully leverage the advantages, such as using virtual accounts to refine and automate bank account reconciliation and account posting.

How do you see these trends evolving in 2015?

More than ever, treasurers and finance managers are taking an integrated view of working capital and looking at their activities across the financial supply chain. Within this overall theme, treasurers have different objectives. For some, operational efficiency is the priority, leveraging structured information provided by counterparties (both commercial and financial) to create sophisticated automated processes. For others, the fundamentals of liquidity management continue to be important, i.e., ensuring access to cash to fund liabilities, a significant challenge in the Basel III environment. This is leading to a greater focus on extraction of liquidity from the working capital cycle through a combination of working capital efficiency and alternative tools such as receivables financing.

Next Page   2 

Save PDFs of your favorite articles, authors and companies. Bookmark this article, or add to a list of your favorites within mytmi.

Discover the benefits of myTMI

 Download this article for free