The Treasurer’s Voice: Connectivity

by Helen Sanders, Editor

In this month’s cover story, ‘From London in 2012 to Basel in 2013’ we highlight the fact that one of the important outcomes of Basel III is the development of relationship banking. Relationship banking should not be seen as a fuzzy concept of going out for lunch every so often and asking after each other’s children. Instead, it reflects a closer way of working, based on the full spectrum of a corporate’s, and a bank’s needs, not simply the delivery of particular products and services. For a relationship banking model to work, corporates need to communicate effectively with their banking partners. Furthermore, in addition to exchanging information efficiently, this data needs to be integrated with internal systems to automate financial processes such as reconciliation, cash positioning and payments. These all rely on an effective connectivity strategy. In this edition’s Treasurer’s Voice, we look at how corporate treasuries and shared service centres (SSCs) are connected with their banks and the outstanding challenges that remain.

Treasurer’s Voice participants

Over 140 companies participated in the Treasurer’s Voice over a four-week period between June – July 2012, of which 50% represented organisations with a turnover of $1bn or more. All regions were included, with 40% from Europe and 41% from North America. Forty per cent of respondents were finance directors/ CFOs, group treasurers or regional treasurers. A further 37% also held senior treasury positions, while most of the remaining 23% were responsible for treasury technology. These statistics reflect the high quality of the findings, with people who are responsible for, or who have a good level of understanding of bank connectivity issues responding to the survey.

Connectivity background

Until relatively recently, corporates in most countries (with the exception of France, Germany and Belgium) had relatively little control over how they communicated with their banks, and were effectively beholden to their banks in terms of the tools they were provided with. This often resulted in a proliferation of banking systems, which frequently used different formats. This led to increasing difficulties in creating a single view of cash and inefficient processes for payments and reconciliation, as well as high costs to maintain multiple systems.

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