Published: May 01, 2011
CMIB is a highly innovative business division that integrates all the key transactional activities for our corporate clients, not simply in cash management, but also trade finance such as letters of credit and structured exports. We recognise that managing and processing cash, wherever and however it originates, is key to our customers. Consequently, our sales and product teams are responsible for designing solutions that extend across our clients’ financial value chain, address their requirements and optimise the creation, collection and use of cash. Structured export and trade finance is particularly important, and our customers frequently require solutions that enable them to sell their products. This was a priority during the financial and economic crisis, but it remains critical today. At Commerzbank CMIB, we are delivering export finance services in domestic and international locations, and we have developed close links with the relevant export credit agencies.
In many banks, trade and cash are often segregated, at least from a product management and support perspective, which makes it difficult to deliver integrated solutions across the entire financial value chain. Our approach is entirely relationship-oriented, based on a commitment to understanding and responding to our clients’ needs at a detailed level, according to their industry, customer profile, geographic coverage, supplier base and future strategy. We are then in a position to devise and deliver comprehensive solutions that address our clients’ transaction processing, liquidity, counterparty risk and currency risk management needs, without being hindered by internal product silos with separate profit & loss and financial targets that hinder the efforts of many banks.
There are other benefits to the new CMIB organisation in addition to our integrated approach to cash and trade. For example, our sales strategy and product management units are closely aligned under single leadership, resulting in a short decision process with few interfaces, enabling us to respond to changing customer demands in a flexible and responsive way. We recognise the vital contribution made by each individual and every department, and we ensure that everybody’s roles and objectives are closely aligned, under a single functional head, to ensure that we are devising, delivering and supporting innovative and pragmatic solutions to our clients.
The integration process first started in September 2008 on the initial announcement of the merger. Major transactions such as this always give rise to questions about how the new business will work, so our aim was to integrate as quickly as possible and to make sure that our customers and employees remained informed and engaged in the process.
Our approach is entirely relationship-oriented, based on a commitment to understanding and responding to our clients’ needs.
We have progressed rapidly, and inevitably with a project of this scale and complexity, the ‘80:20’ rule applies, so we have focused our efforts on the most challenging areas. We recognised that our clients needed to see rapid progress so communication has been a major theme throughout the process. We have also been clear about the implications of integration throughout. For example, we had to decide on one electronic banking and transaction processing platform, rather than attempting to combine the two legacy platforms. Not only have we achieved this, but we have also been able to deliver advantages to customers of both predecessor banks. For example, Commerzbank customers now benefit from new locations in Zurich and Vienna, whilst Dresdner customers gain the advantage of new home markets in Central & Eastern Europe.
Some legacy products are becoming redundant, but others are emerging that provide greater visibility, automation and integration, and therefore enhance our ability to meet our clients’ current and future needs. Especially regarding our Cash Concentrating offer, payment conversion and routing solutions customers benefit from an extended product range. For example, we have new technology based on virtual accounts, ‘Commerzbank Cash Collection’, which enables clients to identify, reconcile and post collections rapidly, making working capital accessible and freeing credit limits with customers.[[[PAGE]]]
While a great deal of work has had to be done to align our product, service and technology offerings, cultural integration between two previously diverse entities has been vital to success. We have therefore conducted a series of staff workshops and worked collaboratively to establish a new approach, strategy and culture that everyone can commit to. There have, naturally, been some difficult decisions. The integration affected CMIB very strongly, and was a major challenge and extremely complex; because of our products and solutions (e.g., Commerzbank Cash Concentrating) we are very dependent on IT. However, the IT migration has been very successful, with a smooth transition for our customers – it is very important to us that they should be able to benefit from our extended product offering and know-how. Customers who previously had relationship managers from both Commerzbank and Dresdner Bank now have one central point of contact, so it has been important to make sure that we provide continuity and maintain the wealth of knowledge and relationship quality that has developed over a number of years.
We do not segment our transactional business into trade and cash, but provide an integrated approach.
At the end of April we completed the final stages of integration, with the final switchover of systems etc. This has proved very successful due to the discipline, professionalism and enthusiasm by our staff and customers.
Throughout the integration process, as well as the final steps in migration to the new business, we have been very encouraged by the response of our staff, customers and the wider market. We conduct regular employee questionnaires to gauge satisfaction levels and respond accordingly. We also conduct independently managed customer surveys to ensure that we maintain an objective picture of our clients’ needs, concerns and aspirations. Not only have the results of these research initiatives been very positive, but we also increased our market share during 2010, a year that proved difficult for many banks. We have been privileged to win a variety of prestigious industry awards, including the Euromoney award for ‘Best Domestic Cash Manager Germany’ in 2010, only 18 months after the new bank was founded. This reflects the market perception that the new Commerzbank is an active bank with a forward-looking strategy and the ability to achieve it. This confidence is important for our customers and employees, and enables us to look outwards, focusing on customer needs rather than internal processes.
CMIB is an entirely new business, building on the strengths of our predecessor banks but with a new approach to meeting and exceeding our clients’ expectations. As I mentioned previously, we do not segment our transactional business into trade and cash, but provide an integrated approach across all aspects of our client's cash activities. Within this, however, we recognise that customers of different profiles have diverse needs so we provide dedicated services to Large & Multinational Corporates, as well as Small and Medium Enterprises. This allows us to provide service delivery, technology, products and services in an appropriate way, with a suitable pricing structure, according to each customer’s profile. Our customer base comprises both German customers seeking a bank with a strong profile both at home and abroad, and international companies seeking an expert banking partner in Germany and in the wide range of complementary markets in which we do business.
Whatever the size, industry and geographic profile of our clients, we are entirely committed to working with each company in a collaborative way, building on a relationship of trust, that allows us to anticipate and respond to our customers’ needs, and support their business success.
Regarding our products and services we are able to provide unique offerings that deliver considerable value. For example, with the multibank application of our corporate banking portal, Global Payment Plus, customers can access interbank account information, process it centrally and manage their global transactions by using a signature stick. The signature stick allows customers to work even more flexibly, giving them the opportunity to make secure mobile payments at any time from any location.
Furthermore we continue to work closely with SWIFT and to make SWIFT-based services accessible to our clients as we recognise the benefits of independent connectivity with industry-leading security and resilience.
Finally, we recognise that while some areas of our business are best managed in a centralised environment, our customers also value proximity and direct contact. In many banks the handling of letters of credit and guarantees is increasingly centralised to often remote centres. As a matter of fact, the documentary business needs know-how and experience due to its complexity. To provide local support and ensure a smooth and fast settlement of our clients’ trade finance transactions we offer our services in 21 competence centres for documentary business in Germany and in 19 locations abroad.
The combined network provides us with greater breadth and depth of geographic footprint which is very valuable to our client base, and we will continue to expand our reach in accordance with our clients’ evolving needs. We remain committed to our home markets, such as Germany, providing reassurance to the many companies who were affected when many foreign banks exited the market or wound down their activities subsequent to the financial crisis.
As a result of our relationship-based model, we have a unique insight and appreciation of our clients’ business and their needs, constraints and ambitions. Many customers seek to leverage our resources, expertise and knowledge of their business to understand and implement industry best practices, and to optimise efficiency and automation. Our consultative approach, rooted in a relationship of trust, is a strong differentiating feature of the new Commerzbank, and is particularly appreciated by our customers.
How Thought Leadership Can Reduce the Cost of Sales by Patrik Havander, Havander & Partners A focused attention on the costs incurred by the global sales and marketing processes is becoming increasingly important for corporate banks and their transaction banking departments. While the client/bank relationship remains vital, research has shown that in fact relationship selling […]
