An Interview with Diane S. Reyes, Global Head of Payments and Cash Management, HSBC
Diane Reyes joined HSBC as Global Head of Payments and Cash Management in September 2011, building on a highly successful career at Citi. In this article, we are delighted to feature Diane’s views on trends and opportunities for technology in the payments and cash management space.
What particular challenges do you see your customers seeking to address at present?
The most significant issues that we see clients seeking to address remain in the liquidity arena. Although this is not a new trend, there has been a subtle shift over the past year or so. Before the crisis, investment yield was an important priority within companies’ cash investment strategy. The global financial crisis resulted in a seismic shift in priority, as preservation of principal and liquidity became predominant themes, and yield no longer figured as the primary consideration. Over time, we have seen a gradual rebalancing of priorities. Principal preservation and timely access to liquidity remain crucial, but treasurers are now focusing on their ever increasing cash holdings.
Treasurers’ need for yield has developed during a period in which the available instruments has become constrained. The Eurozone Sovereign debt crisis and ensuing downgrades have caused treasurers to re-consider guidelines regarding acceptable counterparties and instruments that comply with investment mandates. Additionally, concerns about the sponsors of MMFs, the challenges of monitoring composition thereof, and the relative cost/return have resulted in a lower appetite for passive investments into pooled assets. In order to achieve the desired return treasurers extended the maturity of their cash portfolio, using an actively managed array of deposits and selective purchases of qualifying securities. The extension of maturity has put heightened pressure on corporate treasurers’ to ensure they have the appropriate visibility and control of their operating cash, so that they can meet their daily requirements while being able to invest on a longer-term basis. As a consequence, more treasurers are using multi currency cash concentration and pooling techniques to enable them to streamline their funding process.