Cash & Liquidity Management
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Changing Times for Corporate Cash Management

The ongoing economic turmoil has led to rapid developments in treasury and cash management. Banks and their corporate clients need to stay abreast of developments to ensure they emerge from the crisis unscathed, says Marilyn Spearing, Deutsche Bank’s Head of Cash Management Corporates.

The past year has presented some unprecedented challenges for both banks and their corporate clients. Difficulties in obtaining short-term liquidity following the start of a global downturn have painted a very bleak picture indeed. However, the changing – and at times unpredictable – conditions have taught some important lessons to banks and corporates. And those that come out of the current crisis unscathed should find that they emerge well-placed to make the best of improved conditions.

Corporate concerns

Of course, one of the main areas for corporate concern during a period such as this will be efficient cash management. As short-term liquidity funding becomes difficult to obtain and the broader economic climate impacts turnover, making best use of cash balances and minimising external borrowing may make a life or death difference for some corporates. As a result, we have observed a “back to basics” approach in many corporate treasuries.

Key themes here have been a focus on maintaining day-to-day liquidity – ensuring, at the most basic level that corporates can continue to transact – and squeezing efficiencies from the most essential of processes. Unfortunately, one downside of an extended run of favourable conditions is that there may have been a lack of impetus to address processes and structures where small efficiencies could be yielded.