Delegate biographies: Learn more about the panelists
Executive summary
• Corporates and banks are working together towards standardization in cash management and treasury.
• Global businesses still require local banks on the ground in many countries, slowing the move to standardization.
• The Single Euro Payments Area came into being this month but is still several years away from full implementation.
• Technological developments can still offer many improvements in efficiency in this market. |
JL, J&W Associates What direction are you taking with cash management systems and services drivers?
DJ, Shell The main driver at Shell is process standardization. We have a major standardization programme running across the group to rationalize systems, implement standardized processes using SAP and to migrate more activities to shared service centres. In treasury we are very aligned with this programme and our main objectives are to continue the roll-out of our standardized treasury model and focus on the core fundamentals, operational excellence, risk management, global and standard operating models, while continuing to keep abreast of market developments.
IJ, Merck Merck is moving towards a single instance of SAP and to shared services and standard global processes. It’s a wonderful opportunity to start from scratch, and decide on the best banking structure and treasury-systems infrastructure to support the business over the next 20 years. It’s a very interesting time because of what’s happening with SwiftNet Score, ISO formats, XML, Sepa and digital signature development. Our aim is to incorporate all these, to help get the global cash visibility from the treasury side, and to help the other shared-service initiatives realize benefits more aggressively and quickly.
JL, J&W Associates Is this a senior management drive or is it coming from inside treasury?
DJ, Shell At Shell this is driven by the Global Finance Vision led by our CFO. Everything that we’re doing across the finance organization is aligned with this.
IJ, Merck In Merck, this is a CEO objective. The company is committed, with a view to big savings by 2010. It’s a tidal wave through the organization.
JL, J&W Associates Is this a model for the modern company?
DJ, Shell We have already made considerable progress in centralization and standardization and we now want to take this to the next level. We are looking to take further advantage of market developments such as SwiftNet, XML, digital identities, improved global information and liquidity solutions.
BI, ING We see a trend towards standardization. Coping with Sepa [the Single Euro Payments Area] costs money and resources, and the need to pay off these investments changes the scope of ING. We are looking at a more standardized offering. We used to fight for loss-making deals. Now we happily allow other banks to take the losses. We understand what we want and for which corporates we want it. That means that when looking at RFPs, we are looking at the requirements and to see if there is a good match for us. If the match is good, we will go the extra mile.
SR, ABN Amro Our experience is that with corporate clients, the senior management have the mandate to drive change through local treasury functions and in-country operations. Clients often have different abilities in relation to their own organization structures and their ability to drive through standardization at a local level. Some companies have standardization embedded within the culture, others aspire to that, but still need to manage and support their local offices, and their traditional way of doing business, because they’re unable to get them to adapt.
BI, ING There is overcapacity in the industry. If not, you can’t explain the irrational behaviour of some of the banks in some deals.
RM, Citi For global customers, standardization is a given, along with the value that brings. The infrastructure is forcing banks to spend. If you have standardization, it becomes a scale game. That could explain why people are picking up these deals. It explains partnerships. Banks have to play nicely with each other because you’ve got customers asking for standardization.
PNP, Volvo All corporates should request standardized solutions from the banks. That needs to lead to flexibility in banking relations.
RT, HSBC At HSBC we want to focus on understanding the corporate cashflows and processes of the customer. By understanding these we can provide solutions to ensure clients get the synergies they are looking for. It’s useful if, as a bank, you’re at both ends of the supply chain. We bank companies around the world that have gone for a single ERP, and because that’s such a costly decision, that drives benefits through to treasury. There are companies that have gone for one process, one payment methodology, one ERP system, one treasury system. The banks look to see where they can capitalize on that, from a transactional and a liquidity base.
In my mind, the discussion is moving much more towards the IT world. We’re getting into realms that banks have not got into before, to do with the integration and standardization of channel. The advent of developments such as Swift for corporates will drive the way that we deliver products.
RM, Citi The issue is how you can face off against an organization pushing for standardization without being standardized yourself? Even some global banks that think they are standardized are being taken to new levels.
RT, HSBC Across multiple regions the big banks have to follow this through. Companies want to see the same liquidity reporting and ERP integration, whether it’s in Asia or Europe.
SR, ABN Amro Working with corporates drives how banks standardize and how they provide efficiencies. We have to make sure that we drive the efficiencies at a local, regional and a global level.
MS, Dyson I’m not quite in the same place with standardization. I’ve spent a lot of time on Canada, Russia and China and the level of standardization across our operations in those three countries is negligible. It’s fine talking about standardization in mature economies, but most of our growth will be in fringe places, where standardization is difficult.