The do's (and don'ts) of winning a cash management mandate

Kimberley Long
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If only winning a transaction services mandate were as simple as filling in the RFP document – though even that is getting ever more complex. Success requires a full understanding of the business you are trying to win, and the soft skills to make the relationship work. Plenty can go wrong along the way.

DON'T: "I was in full flow at a really important pitch and thought all was going well – until I noticed that the main decision maker we were pitching to had fallen asleep!"                           Illustration: Pete Ellis

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What’s at the heart of a bank’s cash management business? Speak to any banker in the sector and the conversation will quickly turn to subjects such as client solutions, technology, scale and expertise.

But, at its most basic level, cash management is just like debt markets, or equities, or even M&A. What drives success is winning (and retaining) mandates from clients.

Indeed winning a mandate in cash management is perhaps of even greater importance. Business is sticky. Some 56% of respondents to this year’s Euromoney Cash Management Survey said they had been with their current cash management providers for over five years. Changing cash managers is a lengthy and difficult task. The time and complexity of moving to a new banking partner and adapting new technology means corporates do not make the decision lightly.

That doesn’t mean they don’t reconsider their relationships regularly. As this year’s results reveal, almost 50% of the near 20,000 corporates who took part have sent out an RFP to re-evaluate relationships within the past 12 months.

That is the starting point of a long and involved process. It can take up to a year from issuing an RFP for a corporate to begin to use a new banking partner.

RFPs can contain up to 300 specifically-tailored questions as corporates look to find the best match for their business. But aside from simply answering those questions, bankers need to do their homework to increase their chances of winning the mandate. 

Picking the right cash management partner is also increasingly important for the companies themselves. More than four out of five of those taking part in the survey say their cash management operations and partnerships have helped improve the overall efficiency of their businesses, and 57% of respondents say they have greatly done so. 

On both the corporate and the bank sides, a lot rests on choosing the right partners. So what are the key factors to winning a mandate?

Build a relationship


You can fill in as many 300-question RFPs as you like, but you won’t win anything without a relationship with the client.

Shahrock Moinian, managing director and head of global solutions for trade finance and cash management for corporates at Deutsche Bank, says: "The relationship has to be built before the RFP is received. Winning the business is about human relationships." Joanne Scheier, TS product manager corporate market segment, BNY Mellon, says: "There absolutely is a need to have a relationship. It’s a people business. As a rule we would not do a cold pitch, as there needs to be an understanding of the client and their future needs for a proposal to be successful."

Building a mandate-winning relationship does not happen overnight. Any association has to be developed over time to be successful. Mladen Zaprianov, head of CEE trade finance and STEF, UniCredit Bank Austria, explains: "Between the bank and the corporate treasury it is crucial to have a long-lasting relationship. It needs to go deeper and reach the level of general management and commercial business. The relationship is multi-layered and needs to be built up."

How can a bank build up a relationship when there is not one in place already? 


Setting the foundations starts long before the RFP arrives on someone’s desk. This can be tackled proactively, using relationship managers to find prospective clients and pitch services before the point when they issue an RFP. 

Making the most of existing relationships can also create an opening. Every client comes as part of a larger supply network, and treasurers who have had a good experience will be likely to talk to their counterparties. John Campbell, global head of sales management, ANZ, says: "When trying to build up the relationship it can help to leverage off other existing clients. Their experiences can help to sell the business on your behalf." 

And it can pay to look at the bright side and to the longer term even when a mandate bid fails. Benoit Desserre, head of payments and cash management, Société Générale, adds: "A relationship can start with a lost RFP. It can be the first point of contact and if you made a good impression when the corporate will be looking for new services you stand in a much better chance." 

Be thorough in the responses


Having a good existing relationship certainly does not guarantee winning a mandate. The questions included in the RFP document are, after all, there for a reason. Even if the corporate is already familiar with a bank’s product offering the customer wants to know how it can be used to meet its own specific requirements. 

RFPs can differ greatly, often depending on nuances in regulation or culture. Scheier says: "In the US the process for submitting RFPs is very formal, and is often governed by corporate purchasing departments." 

Documents may have strict rules attached, whether it is the exact date and time a document has be submitted by, or down to the length of the reply. 

Even Twitter seems to be having an impact on submissions. "Some corporates are limiting the number of characters that can be included in each response in the RFP," says Campbell. "You need to be sharp and to the point to get the message across."