Tax, Accounting & Legal
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The Importance of Standardisation to Today’s Treasurer

by Carlos Gutierrez Salan, Global Head of Cash Management, Santander Global Banking & Markets

Under the current economic climate, corporate treasurers are seeking to improve efficiencies and gain better visibility and control over their global cash positions, any time of the day, any place in the world. Increasingly, treasurers are also looking to automate transaction initiation to reduce costs, time and resources associated with it. More and more, they are looking to centralise their traditional treasury activities in one or just a few regional centres for bank account management, consolidation of information, liquidity management, payments/receivables execution and full integration with local or regional supply chain financing solutions. As they optimise the way internal and external payments are made, they try to make the best use of internal liquidity to reduce the need of external funding. The larger the company and the more countries it operates in, the more challenging it is. There are tax, regulatory, and security issues to consider amongst others that in many cases prevent them from achieving optimal structures.


Standardisation is a key word when trying to achieve all these aims. Not long ago, a regional treasurer had to make very large twists to come up with a solution that matched its needs in the different geographies where he was doing business. The primary mechanism for corporate-to-bank communication was host-to-host connectivity, different connections to each bank and all the different and odd formats with which they had to comply. Nowadays, different standards have come into place. As a response to this, the banking community increasingly adopted market standards and even allowed SWIFT access to non financial institutions. This means non-proprietary, multibank solutions that offer a secure channel for information exchange and transaction execution between large corporates and their partner banks.

Under this new offering, large multinationals can easily use different bank providers under the same standards, gaining operational efficiencies and flexibility to choose or change bank providers based on their cash management capabilities for the markets where they operate. Moreover, all these changes have also ‘perfected’ the way banks regard this business by focusing more and more on the financial services rather than competing in the way information exchange is set up with each particular client.

A new paradigm:

While one may still argue that corporates and banks will still need much space for customised protocols and formats, this is something that will be solved by adding flexibility to adapt standard solutions to the reality of each implementation. What is clear, though, is that the times of customer retention on the basis of the cost of change are over. Under the new paradigm, service quality, market positioning and product capabilities are the key elements to increase market penetration.