Sponsored statement: J.P. Morgan - The global advantage
As companies expand their activities across the globe their cash management requirements become more complex. Their banking partners must meet treasurers’ need for greater visibility and control – wherever the company is operating.
|Linda McLaughlin-Moore, international cash management executive, Treasury Services J.P. Morgan
The recovery of the global economy in the aftermath of the financial crisis has accelerated globalization. Corporates, non-bank financial institutions and banks are seeking opportunities in countries with the strongest growth profiles, such as China, India, Brazil, Russia and other emerging markets. Moreover, the speed of expansion into new territories is increasing, with the internet in particular making it possible to begin selling rapidly into new markets. As these institutions increase their footprint their cash management requirements necessarily become more complex. Acquisitions, rapid expansion and changes in currency flows are driving considerations of greater visibility and control through shared services as well as consolidation of banking relationships.
"This trend is further reinforced by the heightened importance of risk management following the crisis," explains Linda McLaughlin-Moore, international cash management executive in Treasury Services at J.P. Morgan. "More than ever before, clients are scrutinizing international cash management providers for financial fortitude; long-term strategies which complement their own and certainty that they are working with trusted, long-term partners."
In response to the increasing globalization of its clients, J.P. Morgan has embarked on a multi-billion-dollar investment in Treasury Services. "There are three main goals as we continue our expansion," says McLaughlin-Moore. "Firstly, we aim to simplify and enhance our clients’ experience. Secondly, we want to bring global capabilities into the local marketplace. And thirdly, we are expanding our footprint."
Delighting clients with an unrivalled experience
Much of the client’s interaction with J.P. Morgan revolves around the multi-country services that it provides and the complexities that characterize this aspect of international cash management. "How we respond to our client needs differentiates us," says McLaughlin-Moore. "Equally important is how we simplify our communication and engagement with our clients, and provide intelligent solution alternatives."
J.P. Morgan has recently opened for business in Brazil and Mexico, and also in Saudi Arabia, and will open two more branches in China by the end of the year. "By the end of 2011, the Treasury Services division will have a physical presence in 44 countries and we will be continuing to expand our branch and office presence aggressively. Our goal is to provide our clients with a single point of touch. This could be through an assigned service officer, and/or through J.P. Morgan’s internet portal or host-to-host channel – enabling our clients to contact us in a language, time zone and method of their choice."
One of the most critical functions of the bank’s service organization is the implementation process. "Transitioning a client to a new product or service is the first point of touch – it’s vital to get it right," says McLaughlin-Moore. "How do we do it? We combine the right technical and service skills, with rigorous process management and discipline."
J.P. Morgan is committed to communication and format standards. It is at the forefront of XML adoption and is a major player in SWIFT. "However, we recognize that clients cannot necessarily all follow the same pace or path in the technological evolution," says McLaughlin-Moore. "Our dedicated team therefore aims to bring the benefits of standardization to clients to as great an extent as possible."
For example, some clients have yet to adopt consolidated ledgers but are eager to gain the benefits of consolidated payables and receivables. "We’ve designed an integration tool that helps achieve a consolidated view," says McLaughlin-Moore. "Clients are then ready to move to the next step where they can simply send us a single mixed batch file that we can execute across the globe."
Another way in which J.P. Morgan is improving clients’ experience is through the use of virtual services. This is an information system that enables in-bound receipts to be identified by a unique ID number. Virtual services enable clients to facilitate quicker receivables reconciliation and therefore help to reduce days sales outstanding.
Driving global capabilities into the local market
In recent years, J.P. Morgan has made a considerable investment in creating a series of global applications that provide clients with consistent information and a similar experience wherever they access them. "Three examples of such applications, among many, are J.P. Morgan international demand deposit account platform, Receivables EdgeSM and J.P. Morgan ACCESSSM Liquidity Solutions," says McLaughlin-Moore.
J.P. Morgan’s new international accounting platform provides significantly enhanced reporting for clients through the system’s real-time capabilities. Clients benefit from greater visibility into their global transactional accounts. The development of the new platform enables J.P. Morgan to roll out enhanced capabilities quickly across the globe without the burden of integrating in-country legacy systems.
Receivables EdgeSM is J.P. Morgan’s receivables reconciliation tool. It combines advanced image and data capture technology to create an exception management workflow tool which supports quicker reconciliation and quicker follow-up of customers who are experiencing delays with their own payments. Receivables EdgeSM has now been rolled out to over 80% of the markets in which J.P. Morgan operates.
J.P. Morgan ACCESSSM Liquidity Solutions provides clients with a complete picture of their global liquidity online, giving them greater visibility and enhanced control to make better informed decisions. It can provide information on global cash positions, details on concentration structures, tools for intercompany loan administration, investment initiation capabilities and robust, consistent reporting.
"By creating a uniform touch and feel with these and other applications and by facilitating universal availability of our product offering, we enable our clients to do business in a common way anywhere in the world," says McLaughlin-Moore.
An expanding presence
J.P. Morgan is building its global presence in two ways. Firstly, the bank is expanding its branch network organically, with specific focus on the emerging markets in Asia and Latin America. In addition, the firm will build on its branch services in Russia and will continue to pursue an aggressive expansion programme in Central and Eastern Europe and Africa.
J.P. Morgan is also focusing on the Middle East. In January it launched treasury, money market and FX operations in Saudi Arabia – and will be the first US bank to offer a full cash management capability there. "Our network expansion plans include the addition of new bank partnerships to extend our footprint beyond our own physical presence, enabling our clients to use our technology and simplified service across an even broader geography," says McLaughlin-Moore. "We leverage other banks for an assortment of local services – coin and currency, remote branch counters, check processing and sometimes even local ACH-like services." For example, in the second quarter of 2011, J.P. Morgan will launch a new network in Pakistan which will enable clients to use JPMorgan ACCESSSM to leverage a comprehensive suite of cash management services made available by our chosen partner bank. .
"Our goal is to be available to meet the cash management banking needs of our clients today and tomorrow".
Working with treasurers
J.P. Morgan recognizes that the scale and breadth of tasks demanded by companies of the treasury function continues to widen even as the resources available to treasury teams shrink. "Everybody knows that treasury teams are getting smaller and their remit is growing," says McLaughlin-Moore. "Technology from global banks needs to be there to fill the gap."
This decade will require a step-up in how treasurers manages their banking relationships and cash management partners. "J.P. Morgan’s focus is to help its clients rise to the new challenges by making it easier for treasurers to find out where their cash is and making it more straightforward to manage," says McLaughlin-Moore. "We simply want to do the best – and be the best – for our clients during these critical years."