Strategic Treasury

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Great Expectations or Pride & Prejudice? What do treasurers really want from their banks? The Editor discusses the key themes from the corporate panel at SIBOS 2016, where the panellists emphasised the value of long-term partnerships with their banks.

Great Expectations or Pride & Prejudice?

What do treasurers really want from their banks?

Great Expectations or Pride & Prejudice?

by Helen Sanders, Editor

“If you want to go fast, go alone. If you want to go far, go together” (African proverb) quoted Phil John, EMEA Treasury Director for Mars, concluding the corporate panel at Sibos, and encapsulating many of the key themes discussed during the session. The four panellists, Phil John, Tobias Thiessen (The Global Fund), Betsy Clark (Alliance Data) and Shahrul Azman Mohd Moktar (Felda Global Ventures Capital) emphasised the value of long-term partnerships with their banks. However, they expressed a number of frustrations and areas where they recognised the benefits of greater collaboration and standardisation both within banking organisations, across banks and across the wider financial and regulatory community.


Bank-agnostic channels and formats

Connectivity and visibility was the opening theme of the panel. While banks are often keen to promote proprietary systems, this is unhelpful for multi-banked corporations, who are then forced to maintain multiple systems, interfaces, security tokens and user rights. Instead, panellists emphasised the importance of SWIFT as a bank-agnostic channel. However, adoption amongst banks is still patchy, with far fewer banks in regions such as Latin America, Africa and Asia supporting corporate access to SWIFT than international banks. Furthermore, companies cannot necessarily rely on being able to access all branches of these international banks or use all message types, such as trade finance instruments. Onboarding processes can also be complex, costly and inconsistent across banks.

It is not just fragmented channel strategies that are creating challenges for treasurers, there is often not enough information passed through the transaction process to categorise transactions. This means that a lot of time is taken identifying flows and trying to define rules to automate reconciliation, a problem that is then replicated across banks. As every bank uses diverse formats, integrating every bank is effectively a new implementation, with different mapping, processing and rule-based intelligence. Although XML ISO 20022 formats appear to address this, panellists urged the need for more multi-bank collaboration. Currently, the focus appears to be more on aggregation than compromise: rather than being prepared to change or adapt formats, banks are simply adding more lines to ‘standard’ file formats to accommodate their own variations. Banks need to realise that connectivity and standardised exchange of information is not a differentiator, it is a basic service.


Maintaining bank accounts

While connectivity is a basic service, so too is the ability to open, close and maintain authorised signatories on accounts. Panellists highlighted instances where it has taken two years simply to update signatories, with quite different requirements between banks in the same jurisdiction, leading to significant risk and resource implications. While there have been various initiatives to develop and promote BAM (bank account management) and eBAM (electronic bank account management), progress has been in fits and starts. Some treasury technology vendors have developed BAM tools within their applications which have proved successful, while in other cases, corporations have developed their own; however, there is still no universally accepted platform for conducting basic BAM tasks. The concern expressed by some panel participants was that while automation of BAM will be very valuable, the underlying processes that the bank employs must first be efficient – “you can’t automate a process that doesn’t work”.


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