An Integrated Approach to Working Capital

by Nick Blake, Head of Global Sales and Strategy, Global Transaction Services, RBS

During the recent TMI Transaction Banking Roundtable, held in association with Fundtech, which is featured in this edition, Shahrokh Moinian, Head of TFCMC Global Solutions & Head of Global Cash Management Committee, Deutsche Bank, made the point that clients do not want their banks to push products in particular segments, such as cash, trade or FX. Instead, as Nick Blake, who joined RBS as Head of Global Sales and Strategy, Global Transaction Services earlier this year, describes in this article, corporate treasurers, and their banks, are taking a more integrated approach to working capital.

Regulatory and market pressures

Integration of complementary business functions, such as cash management and trade finance, has become a priority for banks in recent years, firstly in response to customers’ changing working capital needs, and secondly to reflect the increasing cost of capital. Banks therefore need to balance their offerings given that the cost of delivering trade and trade finance services is now higher. This is driving a closer relationship between core financing, cash, trade and ancillary banking activities.

Corporate treasurers understand the changing regulatory pressures on banks, and despite the possible constraints in terms of cost and availability of financing, they  also see the benefits in terms of improved, more integrated solution offerings that meet their working capital objectives more specifically than a product-led approach. There remain challenges, however. On one hand, corporates need to reward their lending banks with ancillary business; on the other, they need to maintain operational and financial efficiency, which may be easier to achieve when working with fewer banks.

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