Get More from Your Bank

by Neil Ainger, freelance journalist & treasury writer

Knowledge is power. But how can treasurers master the complexity of the global, diverse environments in which they operate? Changing regulations, new technology and a faster economic cycle mean treasurers need knowledge of IT, law, tax, FX and emerging markets, while assistance with change management is often necessary to implement new cash pools. Good advice is essential. Attendees at BNP Paribas’ 8th Cash Management University (CMU) on 29 May in Paris heard about how you can often get it via your bank’s advisory services’ department.

Operational experience, knowledge, being proactive and trustworthy were all cited by Matthias Koch, EMEA Head of Finance at Saint Jude Medical, as desirable qualities in a great advisor. He has found these qualities within BNP Paribas’ implementation service and its team members.

Maria Charskaya, Implementation Project Director at BNP Paribas, has provided technical help, staff communication advice and change management consultancy during the establishment of a new Austrian HQ and EMEA cash pool at St Jude Medical. Together with other team members she was supporting the corporate through its transformation path.

The medical device corporation has benefited from greater centralisation, flexibility and cash concentration, meaning it now has a treasury unit that is more efficient, automated and scalable. It can move money around its operations more easily and act as a financier and value-adding service to the business.

Koch’s emphasis on trust was supported by almost 50 treasury peers gathered at the advisory services and solution design meeting. A live interactive quiz of attendees, including peers such as Peter Kreutzfeldt, treasurer at Leo Pharma, and Nina Rentola, senior treasury operations manager at Kone, found that ‘trust’ and ‘insight’ were the biggest assets of a great advisor.

Responding to the live question: ‘what makes a great advisor?’ on their individual iPads attendees also cited ‘independence’; ‘open-mindedness’; and ‘reputation’ as important qualities.

Fellow CMU advisory panel member, Henrik Garbol-Andersen, Senior Treasury Specialist at Danfoss A/S, advised attendees to look to each other and their treasury peers for support. He relies upon the Nordic treasury network, colleagues, contacts and trade bodies to share best practice tips and knowledge about cutting edge cash management optimisation. He’s not as bank-reliant as Koch, but then his firm “has an in-house bank (IHB)” and “is probably 10 years further down the road of centralisation,” he said when comparing his experiences with Koch.

Danfoss does rely on its bank partners for regulatory support, however, and regional advice in Latin America, “which can be particularly challenging,” admitted Andersen in terms of its local laws.

Danfoss is a global valve, heating and engineering company that employs 24,000 people across 100 countries. Headquartered in Denmark, it had sales revenue of DKK 34.4bn last year ($5.05bn) and tends towards a multibank approach reflective of its global footprint.

Responding to the question: “who are your trusted advisors?” Andersen put peers at the heart of his answer, with consultants low down on his list. Bank specialist advice was welcome where it could add value, but Andersen does not want to be solely reliant on any one “single source of truth” so looks to canvass opinion and facts from various different sources.

Information sources

Session attendees at CMU 2015 simultaneously provided their answers to the question of what information sources they trust via their iPads in the Lenotre room at the Le Pre Catelan venue in Paris. “My bank” was one common answer, but conversely “I trust no-one” was also given as an answer by some more independently-minded treasurers in the room.

‘Google’ was also cited as a trusted advisory source, although as another member of the CMU panel, Filipe Simao, Head of Client Advisory at BNP Paribas, said, “it might perhaps be better to use that as a link library”, reducing the chances of a garbage in, garbage out type scenario where untargeted research provides untargeted results.

Bank support

A number of sample questions that BNP Paribas’ head of client advisory services, Filipe Simao, is commonly asked were shared at the CMU 2015 session, including: “What’s the economic outlook for Turkey?”; “Are there exchange controls?”; “Can I link local accounts to a European cash pool?”; “What’s the withholding tax rate on dividends?”; and so forth.

These types of questions can all be answered, in regard to Turkey or 59 other countries, by referring to the BNP Paribas Atlas compendium of country guides, explained Simao. He also went on to explain to the treasury audience the currency guides, big data analytical tools and other aids available from the bank. This includes an anonymised benchmarking service that allows treasurers to compare and contrast collections efficiency, for instance, versus the norm in the pharmaceutical, automobile or any other sectors, against vertical peers. The amount of data unleashed by modern technology means that such confidential benchmarking analysis is now possible.[[[PAGE]]]

“It’s surprising what additional services, advice and implementation support is available from your bank – beyond just ‘vanilla’ cash management help – if you just ask for it,” said Simao. He characterised such assistance as ‘advisory 2.0’, while stressing the need for more technical implementation support accessible via his colleague, Maria Charskaya and other BNP Paribas Implementation team members. Charskaya emphasised teamwork and training as other non-cash support services valued by the bank’s customers.

The final quiz question of the advisory session at CMU 2015 asked what support the treasury audience would like to see in the future? Unsurprisingly, regulation featured strongly in the responses provided on the interactive iPads, with strengthening sanctions screening obligations, tax and know your customer (KYC) duties no doubt prevalent in treasurers’ minds. “Analytics”; “proactive advice”; “innovative solutions”; and “peer benchmarks” were also prominent answers.

In conclusion the attendees at CMU 2015 were also advised to talk to each other as the advisory session broke for lunch and during the coffee and lunch breaks. After all, conferences are also a good way to share best practice cash management tips, meet peers and find out about the latest solutions.