Published: September 01, 2014
With corporations of all sizes seeking to expand their global footprint, it is becoming increasingly challenging for treasurers to achieve compliance with local market practices, regulatory compliance, and payments and collections culture in each market. At the same time, treasurers are seeking to support the liquidity and risk management requirements of the group. With these potentially conflicting requirements, it becomes critical for corporations to work with banks that bring local expertise, insights and depth of presence, combined with sophisticated cross-border liquidity and risk solutions, across the countries in which they do business. To address these growing challenges, Societe Generale has developed the breadth and depth of network capacity, and customer-centric solutions to meet clients’ strategic growth objectives.
We structure our client relationships and cash and treasury management around four basic principles as follows:
Integration – a priority for treasurers is that they can access cohesive solutions across the countries in which they operate, avoiding fragmentation of liquidity and facilitating economies of scale in payments and collections processing. These solutions need to be straightforward and transparent so that senior management have confidence in treasury information and processes.
Partnerships – partnerships are central to our culture at Societe Generale and inform the way that we work both internally and externally. Within the bank, we work closely across business divisions and countries throughout our network to create synergies, and share information and expertise, in order to meet client needs more efficiently and provide a more integrated service. Looking externally, in addition to our extensive direct network, we work in close partnership with leading banks in regions in which the bank does not have a presence to offer global solutions to our clients. For example, to reach 90% coverage in Africa, Barclays was the obvious choice of partner bank to provide clients with comprehensive coverage in an increasingly important key growth region.
Developing and maintaining trusted, long-term partnerships with our clients is pivotal to our culture and objectives. We listen, understand and respond to our clients’ needs, aspirations and constraints, leveraging expertise developed over many years and proven solutions to solve challenges and create new opportunities for managing liquidity and risk and doing business more effectively as our clients expand.
Security – Ensuring the security of client data has always been a priority for leading banks such as Societe Generale, requiring considerable investment in innovative technology and robust processes. With the need to guard against cyber-threats becoming ever more immediate, keeping client information and flows safe and uninterrupted continues to be a primary focus of our business.
Speed of information – The transformed post-crisis landscape combined with the challenges of globalisation means that treasurers are demanding faster access to global information than ever before. No longer is next day information enough for many corporations: instead, they require real-time information across all entities, currencies and countries to facilitate prompt liquidity and working capital decision-making.
These principles have led to the development of some key innovations for our clients that have in turn strengthened our relationships. For example, over the past 12 months, we have been extending our same online platforms from western Europe across 13 countries in Central & Eastern Europe (CEE) and into Asia. This is another step towards our objective to have one team, one solution, wherever in the world that a client works with us.
Mobile capabilities are becoming more important to clients as they come to expect the same convenience and immediacy as they enjoy in their personal lives. We are therefore rolling out new mobile functionality to clients, not only large multinationals but small and medium enterprises too. These tools extend our existing mobile reporting tools to mobile transaction orders and approvals, providing clients with convenient, real-time access to the bank from any location and device, without compromising information or workflow security or integrity. While some of these developments are at a more advanced stage than others, this is a major focus for the bank as we recognise and deliver the enormous potential that mobile banking offers, both for corporate and retail banking.[[[PAGE]]]
Some opportunities, such as technology innovation, offer the potential for new ways to engage with customers on the one hand, but create challenges on the other. For example, cyber threats have primarily affected banks in the past, which have built up substantial expertise in online security as a result. Banks such as Societe Generale are now able to leverage this expertise when developing and delivering mobile solutions to deliver trusted security frameworks to our clients. Corporates too, such as telecoms companies, are now more focused than ever before on minimising the risk of cyber attack, particularly given the increase in the use of mobile devices for financial transactions, and recognise banks’ valuable role in supporting these initiatives.
The growth of mobile banking is closely linked with changing expectations about the concept of real-time banking. In actual terms, ‘real-time’ typically refers to the bank pushing information at intervals, therefore implying a certain time lapse, even if this is quite short. Given the different cut-off times for each currency, and the need to manage working capital very precisely at a global level, a delay of 30 or 60 minutes can make a major difference. As a result, we have made it easier for clients to achieve the transparency and immediacy of information that they require. Rather than pushing data to clients, they can access up-to-date information at any time, with no time delay. This is a complex change, but one that has the potential to radically change the way that treasury and finance departments operate. Treasurers can select precisely when balance and transaction reporting takes place, schedule intra-day reconciliation at the most appropriate times based on accurate data, and adjust cash positions right up to the cut-off time for the relevant currency, minimising borrowing, maximising returns and mitigating counterparty risk.
In addition to active bank account balance management, treasurers also rely on banks such as Societe Generale for more automated account management solutions such as cash pooling. As SEPA (Single Euro Payments Area) enables treasurers to rationalise their Euro bank account structures, liquidity solutions such as cash pooling can also be simplified. Cash pooling becomes more challenging in regions such as CEE where currency convertibility may be limited, or liquidity management is more restricted. For example, in Poland, while PLZ cash pooling is achievable, it is more difficult to transform it within a pan-European cash pool. In these situations, it is essential for companies with CEE activities to have access to a universal banking service, including local payment and collection services as well as cohesive regional solutions.
The need for universal banking to facilitate a cohesive approach to globalisation is not restricted to European companies. Increasingly, we are supporting multinational corporations headquartered in China as they expand into both western Europe and CEE. As a result, our online platforms offer multilingual capabilities, such as Mandarin, not only within China but in regions such as in Africa to facilitate south-south trade routes.
As globalisation, innovation and regulation continue to result in new consumer demands, changing customer engagement models and compliance requirements, effective, dynamic banking partnerships will continue to be pivotal to doing business internationally. Corporations need to be able to develop and maintain confidence and trust in their banking partners both to overcome these challenges and create and exploit opportunities as they arise.
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