- Eleanor Hill
- Editorial Consultant, Treasury Management International (TMI)
By Eleanor Hill, Editor
The pace and scale of change in cash management is unprecedented. As such, treasurers need a banking partner who can deliver on the fundamentals while developing innovative solutions to keep treasury at the forefront of digital transformation. In 2019, HSBC excelled in sharing knowledge with clients and creating leading edge solutions to fit treasurers’ current needs and future aspirations – making HSBC the undisputed winner of TMI’s Award for Global Bank of the Year for Cash and Liquidity Management.
Digital innovation is changing the face of corporate treasury. From artificial intelligence (AI) to open application programming interfaces (APIs), a world of new efficiency opportunities is opening up to corporate treasurers. But determining which technology is the correct fit for treasury’s needs can be tough. Finding the budget to invest in the latest solutions isn’t easy, either. As such, corporate treasurers are looking to their banking partners to share best practice and innovate on their behalf.
In June 2018, HSBC announced a plan to invest USD$15-17bn on technology over three years to ensure that clients continue to benefit from world-class solutions. The bank’s approach to innovation and digital transformation allows HSBC to anticipate and assess the impact of emerging technologies and leverage these to deliver market-leading propositions. Close collaboration with fintechs, regulators, central banks and clients is an important component of this strategy.
One example of the bank’s deployment of technology in 2019 is the introduction of Next Generation Virtual Accounts Management (NgVAM). To date the solution has been rolled out in the UK, Netherlands, Singapore, Hong Kong, UAE, US (receivables only) and a further deployment is due in Ireland Q1 2020.
This innovative solution allows clients to operate their day-to-day banking activities with fewer physical bank accounts, supported by multiple underlying virtual accounts. The NgVAM application allows clients to manage and design their virtual account structure in line with their business needs via their existing HSBCnet account. Both single currency accounts and multiple currency structures are available. As such, technology investment by the bank is enabling clients to centralise their treasury function or establish In-House Banking capabilities – which have long been sought-after treasury objectives.
Empowerment through self-service
Elsewhere, HSBC is actively upgrading its infrastructure to make treasury banking simpler, better and faster for customers, from small to medium enterprises through to public sector and large multinationals. This is critical in a business environment that demands fast, secure and error-free handling of financial data on a global scale.
Corporates also want the efficiency and convenience with technology that they experience in their personal lives to transfer into the business ecosystem. As an HSBC representative, who received the Award on behalf of the bank explains, HSBC is achieving this by “Giving control back to our corporate clients by providing them with self- service tools wherever possible.” One recent development connected with this is HSBC’s Beneficiary Self-Management [BSM] proposition which was launched across continental Europe in 2019.
In a nutshell, BSM empowers the bank’s clients to self-serve via HSBCnet. Registration for the service is easy and once signed up, treasurers can initiate payments with as little information as an email address. Beneficiaries can also receive real-time notifications via SMS or email, thereby improving their experience, while enhancing productivity and reducing operational costs for the payment initiator.
An additional digital innovation that has recently been rolled out by HSBC is the Liquidity Management Portal (LMP). The portal provides clients with vital insights on their liquidity needs. A data visualisation tool included in the portal gives treasurers an accessible, real-time view of their cash and cash-equivalents, across multiple banks and products. Clients can drill-down from a consolidated view of their balances globally to an individual account, providing greater visibility and control of their short-term liquidity. It enables clients to make changes to their liquidity structures, or investments at their own convenience, to suit their dynamic business needs.
New ways of working
To help corporate treasurers stay at the forefront of industry developments, HSBC is also leveraging APIs to give treasurers convenient access to payment and account services on demand. Using HSBC’s Treasury APIs, treasurers can make payments from their own workstations, without logging into a proprietary bank platform. Clients receive confirmation that a payment request has been received and can track payments from their accounts to the beneficiary – improving visibility over transactions.
Corporates can also use HSBC Treasury APIs to check account balances and transactions on demand, in real-time. This avoids reliance on reports or statements, and helps treasurers to make dynamic cash management decisions. The APIs can be used for real-time payments – another area where HSBC has been investing, through its Real Time Payment Programme.
“Our corporate clients increasingly seek to operate a real time treasury model. They want to be able to manage their transactions, execute trades and make payments, all in real time,” observes an HSBC representative. HSBC’s global real time proposition is currently live in 18 markets with plans to expand into North America and extend the bank’s reach in Europe and Asia Pacific.
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Going above and beyond
As well as helping corporates to explore digital opportunities, HSBC is assisting them in managing the risks associated with the increasing use of technology – such as cybercrime. HSBC is strengthening its controls to help protect against fraud cyber-attacks and providing our clients with the tools to manage their own security, based on the risks within their segment or jurisdictions. One such example is to explore the impact of a digital validation within a payment flow to facilitate ‘proof of life’ and ‘proof of identity’ before businesses release funds.
In addition, HSBC conducts training and educational sessions with treasurers, and produces informative articles and videos related to cyber security created by HSBC and industry experts. The bank has also issued thought leadership publications such as a Sustainability Guidebook for Treasurers to help corporate clients understand how they can positively influence their firms’ goals through focusing on social, environmental and governance topics.
Together, these inititatives have led to HSBC acting as more than just a banking partner to its clients – one of the major factors influencing the judges decision in this Award win. “It is our belief that how we do business is as important as what we do; our responsibility to our customers, employees and shareholders goes far beyond simply being profitable. We want to be trusted advisors on a broad range of topics that impact our clients and we are delighted to win TMI’s Global Bank of the Year for Cash and Liquidity Management as this validates the investments we are making to enable treasurers to stay ahead of the curve,” says an HSBC representative.
Beneficiary Self-Management Case study: Transport for London (TfL)TfL was looking to reduce costs and generate better value for the taxpayer by reducing onerous and manually intensive processes. One such process was the refunding of Oyster card (a payment method for public transport in London) balances. Travellers, including those from overseas, are able to reclaim the unspent balances on their Oyster cards. In the past, TfL handled Oyster card refund claims manually. This was an arduous and expensive process. It was also lengthy and inconvenient for the payment beneficiary, who would receive the reimbursement in the form of a cheque that they would need to deposit at their bank. Working closely with HSBC’s GLCM team, TfL introduced HSBC’s Beneficiary Self-Management solution in order to speed up repayments and avoid the inefficiencies of making one-off, low value Oyster card refunds. A traveller seeking a refund can now submit their claim to TfL, with basic information such as their name, email address and Oyster card number. HSBC then sends the customer a unique reference code, which the customer uses on the TfL website to provide their bank account details, and they receive a credit into their bank account within 48 hours of posting their request. There are neither cheques nor expensive correspondent banking fees, and payment is automatically converted to the claimant’s local currency, using TfL’s preferential FX rates. |
