Cash & Liquidity Management

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Positioning for a New Era at Commerzbank The union between Commerzbank and Dresdner Bank in 2008 was one of the biggest projects in the history of German banks, with major repercussions for customers, employees and the wider market. We talk to the Global Head of CMIB at the new Commerzbank about the integration, and how the bank is positioned for the future.

Positioning for a New Era at Commerzbank

How is the new ‘Cash Management & International Business (CMIB)’ division structured and what are its key responsibilities and products/services?

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.

What were your key objectives when integrating the former Commerzbank and Dresdner businesses?

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.

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