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Treasury Strategy & Transformation
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Leveraging Trends in Europe to Achieve Business Transformation

An Interview with Treasury and Trade Solutions, Citi Transaction Services

In this month’s Executive Interview, we are delighted to talk to Citi's Treasury and Trade Solutions, discussing the cash management trends and opportunities that are emerging both in Europe and more widely, and suggesting how corporate treasurers can best take advantage of these to enhance their financial and operational efficiency and control costs.

What would you identify as the most important cash management trends in Europe today?

We have seen a focus on enhancing operational efficiency and managing counterparty risk for some time now, and these continue to be important to treasurers. However, the opportunities that exist to achieve these objectives are changing. For example, a long-held ambition amongst treasurers has been to simplify, standardise and automate bank communications, such as cash and trade flows and bank account administration. With initiatives such as eBAM (electronic bank account management) and standardisation through XML-based ISO 20022 gaining momentum, corporates are in a better position than ever before to enhance efficiency and standardisation, and reduce costs.

What we are also seeing is that companies are looking to gain more efficiencies from their existing shared service centre (SSC) setups. While historically the focus of the SSCs has been to centralise and process vendor payments, there is now a realisation that this can be further expanded to cover other payment types such as payroll and tax. Furthermore, collections are also beginning to be centralised and standardised under SSC setups, and more attention is now being paid to the management of the cash application process, using additional automation tools.

Another outcome of the global financial crisis has been a greater recognition of the importance of managing liquidity and working capital.