Published: March 01, 2011
In this edition, we welcome Maurice Cleaves, Global Head of Cash Management at Barclays Corporate, who discuss the bank's cash management strategy. Maurice joined from Deutsche Bank, where for the past four years he was responsible for the EMEA region Cash Management Product organisation. During this time he had the responsibility for building and managing an EMEA proposition.
Prior to Deutsche, Maurice was at JP Morgan Chase for 26 years, holding positions in Operations, Product and Business Management Sales, Product Development, and Risk Management with the Cash Management, Securities Clearance and Corporate Trust businesses.
Maurice has also been a Director of SWIFT UK, CHAPS, APACS and a Director of the UK Payments Council.
Our focus has been on defining where Barclays fits in the competitive business of cash management - how to develop our client proposition, and where we have opportunities for growth.
Our expansion strategy is and has been, entirely client-driven.
In the UK, Barclays Corporate has a significant presence, with some client relationships which go back more than 200 years.
Outside of the UK, we have pockets of expertise and pockets of influence, that we need to bring together. So, the first part of our global cash management strategy is an investment programme that brings together the countries where our expertise lies.
We already have substantial business in countries such as Spain, Italy, Portugal and France, so we will be consolidating our activities and have plans for considerable further expansion in 2012, in line with our customers’ requirements. Growing out into the areas where perhaps we’re under penetrated, will be the second part of our global cash management strategy.
In Africa, we already have a unique domestic and regional proposition that is proving increasingly valuable to our clients, as the continent continues to witness stability and growth, presenting exciting new expansion opportunities.
In summary, the way that we will grow and shape our cash management business will partly be on the basis of where our ‘home market’ is, partly on where our expertise is currently, and partly where we need to follow our clients and grow our geographic footprint.
We are now very much looking to strengthen our cash management product set and help our clients with their global cash management needs.
Our ‘home market’ is the UK - many of our clients are headquartered, or have substantial business in the UK.
Our expansion strategy is, and has been, entirely client-driven, and we are committed to providing the appropriate level of service to meet the needs of our clients as they seek to develop their business internationally. Having achieved considerable success in the European markets where we already have a presence, we are confident in our ability to build a strong portfolio of services across Europe.
Also, following years of change in the European cash management space, it’s the right time for Barclays Corporate to take advantage and drive further growth in mainland Europe.
We’re not burdened with a legacy infrastructure, which puts us in a good position to build for the new European environment.
Barclays has always been committed to providing solutions that meet the needs of our clients and helping them to achieve financial success. We continue to innovate and invest in areas such as technology, whilst aiming to make it as easy as possible for our clients to do business with us.
Therefore, clients can expect to see new intuitive interfaces and technological tools to support their communications with us.[[[PAGE]]]
The treasury function operated by our corporate clients is now subject to far more intense scrutiny and the boards of these companies are now more aware of the activities and value that the treasurer delivers to the business than ever before. The responsibility for keeping the company solvent lies with them and therefore their profile internally has increased substantially.
Corporate treasurers face a number of new challenges in today’s climate. The choice of financial partner, consistency of cash flow, a new regulatory environment and the changing sources of cash flow are the key issues on their agenda. Additionally, some of the banks they may have worked with, or wanted to work with, are no longer the same institutions.
So, I think that they have a tricky ‘balancing act’, to ensure they can maintain efficiency and compliance with the new regulatory environment. As a result, they need deeper and clearer relationships with their banks. They also need their banks to understand the increased complexity of their business and support them in driving their growth ambitions.
Treasurers are also now looking far more closely at counterparty risk and how they assess their banks using publicly available data such as credit ratings and CDS spreads, but using only these measures can be like using blunt tools as they do not necessarily tell the full story. Therefore, close communication and co-operation with the banks with whom they do business and place their trust is also important.
In some ways, a treasurer is similar to an anaesthetist, who must maintain the optimal conditions for the surgeon to perform his task, whilst avoiding pain for the patient. Arguably, the treasurer must do the same, as well as ensuring that cash, the lifeblood of the organisation, continues to flow through the company’s arteries!
Clients can expect to see new intuitive interfaces and technological tools to support their communica-tions with us.
We have made and continue to make considerable investment in our cash and trade capabilities, to ensure our clients can maximise the efficiency with which they utilise their cash. We recognise that following an extended period of low liquidity levels in the market, continued constraints on lending and increased scrutiny of credit conditions, our clients are seeking new ways to satisfy their financing requirements.
Consequently, we have also developed new and innovative financing mechanisms that enable our clients to satisfy their long- and short-term funding requirements.
Every bank aspires to take on the role of ‘Trusted Advisor’ for its clients - not least ourselves. If we feel we’re very much on the same side of the table as our treasurers, in terms of what the contingencies are, what the alternatives are for funding and liquidity, then, increasingly we’re seen as a fundamental and essential part of the solution to them.
We continue to pioneer industry developments that benefit our clients by helping them to lower costs, reduce risk and increase efficiency.
For example, Barclays is a key member of the Payments Council in the UK, and we are currently seeking appropriate ways of replacing cheques, with the view of maintaining convenience for consumers, whilst leveraging technology to increase efficiency and control and reduce processing costs.
We are also a pro-active member of the Faster Payments scheme in the UK, which is increasingly seen as a benchmark in Europe, and were among the first banks to invest in the necessary technology and processes.
With a strengthening market, and new regulations pending, such as Basel III, we expect to see further resilience and transparency in the banking market, including more stringent capital and liquidity requirements.
There will be greater scrutiny over the ability of banks to weather a crisis, not only at a proprietary level, but at a client level too.
Corporate governance, both specific and systemic, became more important during the crisis, and we anticipate that this focus will continue. As a resilient and risk-averse organisation, our clients recognise our stability and commitment to long-term, successful relationships based on mutual benefit and open communication.
For more information please contact barclayscash™@barclays.com
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