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Enhancing Financial and Operational Efficiency with SWIFT: A Middle East Perspective While companies in the Middle East may be a little later than some of their peers in other regions to centralise, optimise and standardise their cash and treasury management operations, they have the opportunity to avoid many of the pitfalls experienced by early adopters and leverage the latest best practices.

Enhancing Financial and Operational Efficiency with SWIFT: A Middle East Perspective

by Helen Sanders, Editor

Corporations headquartered in regions such as North America, Europe and to some extent Asia are familiar with the opportunities that SWIFT offers for efficient, bank-neutral bank connectivity to support their cash and risk management objectives. In regions such as Middle East, the value of centralised cash and treasury management functions, and sophisticated technology to support them, is also now becoming more apparent. Consequently, companies headquartered in the Middle East are now implementing new processes and technology, while multinationals that have not extended these structures to the region are now doing so as their Middle Eastern business reaches a critical mass. This article considers some of the cash and treasury management priorities amongst companies in the Middle East, and the ways in which they are using technology to support these objectives.

Cash and treasury management priorities

Companies in the Middle East are becoming increasingly affected by both the challenges and opportunities of globalisation as foreign companies create more local competition and companies headquartered in the region seek international expansion. In addition, a number of governments in the region, such as in Abu Dhabi, are increasingly focused on financial best practices to build international confidence and enhance competitiveness. As Mark Sutton, Senior Payments & Integration Sales Consultant, Treasury & Trade Solutions, Global Transaction Services, Citi outlines,

“Governments of Middle Eastern states are increasingly promoting efficiency and integrity of processes amongst both state-owned entities and the wider business community, and the regulatory environment is gradually changing to reflect this emphasis.”

The result of globalisation and a focus on financial efficiency and integrity is resulting in companies of all sizes, both state-owned and privately held entities, reviewing and revising their cash and treasury management processes, including payments and collections. Murali Subramanian, EVP, Head Transaction Banking Group, Abu Dhabi Commercial Bank (ADCB) explains,

Murali Subramanian“Corporates in the Middle East have been slowly moving towards a more managed, lower-cost treasury model that allows treasurers to focus on their core priorities of risk and liquidity management.”

Marcus Treacher, Global Head of eCommerce, Payments and Cash Management, HSBC continues,

“Access to appropriate funding and return on surplus funds remains high on companies’ priority lists. We are seeing strong interest in comprehensive cash management solutions which enable more accurate cash forecasting, timely execution, and improved efficiency through automation.”

Centralisation of financial processes such as payments and cash management and technology optimisation is often critical to achieving these objectives, with a growing number of companies now starting to engage in these initiatives. Marcus Treacher, HSBC illustrates that while cash and treasury management technology adoption still in its relatively early stages in some cases, the opportunities are growing,

“With the lead being taken by multinational corporates, adoption of treasury technology is still at an early stage in the Middle East. However, we see a strong interest in effective cash management technology in the region, and effective solutions are becoming more readily available at more competitive costs.” 

Murali Subramanian, EVP, Head Transaction Banking Group, Abu Dhabi Commercial Bank (ADCB) adds,

“Treasurers and finance managers are typically engaged in a positive and progressive journey towards automated technology. For example, many corporates have either implemented a ERP/TMS infrastructure, or are in the process of doing so. While each company will have different objectives, increasing process automation and financial integrity are common drivers.”

One such organisation that has done this successfully is Tourism Development & Investment Company (TDIC) in Abu Dhabi, as featured in the July/August 2013 edition of TMI, and highly commended in this year’s Treasury Today Adam Smith Awards.

Optimising bank connectivity including integration between companies’ internal systems and the bank is an important element of an efficient cash and treasury management infrastructure. As Murali Subramanian, EVP, Head Transaction Banking Group, Abu Dhabi Commercial Bank (ADCB) outlines, however, this is not always considered a priority in every case,

“Company strategies for bank connectivity, especially in a multi-banked situation, vary, however, and bank communication may be a second phase project in many cases, even though bank integration is an important step in optimising the efficiency of the ERP (enterprise resource planning system) and/or TMS (treasury management system).” 

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