Cash & Liquidity Management
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From Regulatory Challenge to Opportunity

An Executive Interview with Thomas Dolenga, Global Head of Product Development Cash Management, UniCredit Bank AG

This edition’s Executive Interview features Thomas Dolenga, who joined UniCredit in Munich earlier this year following seventeen years in Singapore, latterly as global head of product development for cash, trade and securities for Standard Chartered Bank. Since joining UniCredit, Thomas has taken responsibility for product development for cash management, including payments, collections, liquidity, account services, cards and client access, whether web-based, host-to-host or third party channels such as SWIFT. In this feature, Thomas discusses how some of the recent and ongoing regulatory changes are impacting, and will continue to impact, on banks and corporates alike.

What would you highlight as the most significant regulatory change in Europe recently, and what does this mean in practice?

Thomas DelongaMigration to SEPA has been a major change for both bank and corporate communities over the past few years. While the mandatory migration deadline has now passed, and most financial participants have completed their technical implementations, most organisations are not yet taking full advantage of a harmonised payments landscape. For example, SEPA offers unprecedented opportunities for standardisation and centralisation of payments and collections, and simplification of cash management across the Eurozone. Once companies start to standardise and centralise their cash management operations, their ability to respond to market and regulatory change is greatly enhanced, while compliance risk is reduced.

At UniCredit, our focus extended beyond compliance to a proactive approach in helping clients to understand and leverage the particular advantages that SEPA offers for their business, and creating the solutions that enable them to do so. Intelligent process automation is difficult to achieve in a fragmented or decentralised cash management environment, such as automated reconciliation and eInvoicing. The UniCredit solution UC Virtual Accounts allows companies to maintain a single account for payments and collections (per currency) but still differentiate between transmitting and beneficiary entities for automated reconciliation and account posting. Treasurers and finance managers therefore gain the transparency and granularity of information that they require, whilst simplifying account structures and potentially eliminating the need for overlay liquidity management techniques such as cash pooling.

When SEPA was first conceived, there was a view that it would trigger rationalisation in the European transaction banking landscape. This has not happened so far, but can you see this happening once companies start to leverage a harmonised payments area more fully?

Despite the harmonisation opportunities that SEPA offers, there continue to be differences in payment culture across the Eurozone. For example, direct debits are the preferred payment method in Germany, while cards are more prevalent in other parts of Europe. As a result of UniCredit’s depth of local capabilities and expertise in each market in which we operate, combined with an extensive geographic footprint and comprehensive cross-border solutions, we are able to support clients’ harmonisation objectives whilst addressing local payment cultures. Consequently, we anticipate that UniCredit will continue to gain market share.