Published: January 01, 2000
As we enter 2014, I want to reflect on some of the trends that we have seen over the past year, and how these are likely to evolve in the year ahead. While treasury departments face a wide range of challenges and opportunities, there are some key issues that are common to companies in all industries and regions.
The evolving regulatory environment brings with it uncertainty and change, and there is understandably much dialogue around the approaching SEPA end date. We believe that corporations of all sizes, whether their activities are domestic or cross-border, have no time to lose in completing their migration plans. Companies should work with a trusted bank advisor that has the expertise and solutions to support migration. This is vital to minimising compliance risk and enabling treasurers to position their company to leverage the opportunities for standardisation, centralisation and harmonisation that SEPA presents. Additionally, banking partners can play a critical role in helping companies understand the new constraints proposed by Basel III and Dodd-Frank, and to construct solutions that comply with the new rules.
While many large companies have already built up considerable experience in doing business internationally, there’s an increasing trend for small to medium-sized enterprises (SMEs) to seek growth in new markets. At Bank of America Merrill Lynch, we are seeing year-on-year revenue growth of 40% amongst our US middle market clients as they expand internationally. In Mexico alone, more than 160 of these US clients have tapped our cash management and trade solutions to support their business expansion. We expect this number – and globalisation generally - to accelerate in 2014. We are preparing to support this trend – and our clients’ growth ambitions - by investing in our services and our solutions that will help them reach their goals while minimising risk and ensuring they have visibility and control of cash. We are actively supporting flows between countries such as Japan and Brazil, including supporting Japanese FDI as well as companies expanding their customer base in the country. In contrast, smaller banks are stepping back from non-core markets and solutions in which they are unable to invest to the required level.
Corporations are also seeking new sales channels across their geographic footprint. For example, a growing number of companies, from small retailers to the largest eCommerce companies in the world, are leveraging Bank of America Merrill Lynch’s transaction services to drive efficiency and support innovation through web-based and mobile channels.
Earlier this year we rolled out in Asia the ‘intelligent receivables’ solution that enables clients to automate reconciliation and re-engineer their entire collections process. Next year, we plan to release the solution globally. Clients’ focus on efficiency, cost and visibility applies equally to payments, where we’ve seen tremendous acceleration in the conversion of paper to electronic as more and more companies adopt commercial card, ePayables, and travel and entertainment (T&E) programmes.
Treasurers still face ultra-low interest rates, as well as difficulties calculating risk in new international markets. Their focus is on liquidity and risk rather than yield on cash investments. At Bank of America Merrill Lynch we offer treasury departments a full investment continuum, from a market-leading suite of on-balance sheet products (e.g., deposits) to off-balance sheet (e.g., money market fund) solutions. On average we have more than $340bn in wholesale deposits and $270bn of off-balance sheet investments we have helped our clients place. Separately, we provide a range of custody and agency services to support the needs of our corporate customers at every stage in the investment cycle.
Over the coming year, we expect cost savings, process efficiency and the core principles of cash visibility and control will continue to be key priorities for all treasury departments. With our customer base extending from the world’s largest multinational and domestic corporations through to US mid-cap and SMEs, this year we will be investing in solutions that support the strategic goals of our entire customer base. Whether their growth objectives are domestic, regional or global, our clients will have the benefit of advisory and product expertise across transaction banking through to corporate and investment banking. We are committed to helping our clients overcome challenges and take advantage of market opportunities in order to create competitive advantage and sustainable growth.
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 […]
