Staying agnostic

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Corporates want connectivity standards that will work with any bank, enabling them to move their cash flows from one institution to another quickly and easily.

Etienne Bernard, Head of Transaction Services Origination, EMEA, RBS

Meanwhile, Swift's Bank Payment Obligation (BPO), supported by the Trade Services Utility (TSU), is also facilitating the trend of moving towards more electronic trade exchanges.

The TSU is a centralised matching and workflow engine providing interbank electronic exchange of corporate purchase agreements or any related document such as commercial invoices. It uses a common connection for cash management and open account-type transactions.

It significantly cuts down the transaction lifecycle and improves working capital management, while delivering security. The BPO TSU remains at a relatively early stage but for larger, more sophisticated corporates it could play an important role as a cash and trade bank-agnostic solution.

"In trade, as with cash, the flow is the commodity and the connectivity has to be efficient and secure in order to achieve corporates’ objectives,"says Bernard. "The role of banks is increasingly to add value and enhance efficiency: that may be by developing scorecards using information associated with flows to help corporate treasuries detect scope for further improvements, or by simplifying documentation management - with uses such as electronic Bank Account Management or by upgrading customer service allowing customers to access banks' back-end transaction engines."

Case study: SAP

Headquartered in Walldorf, Germany, SAP is the world's leading provider of enterprise application software, business analytics and enterprise mobility – supporting more than 183,000 customers through 55,000 employees worldwide.

Over the past 10 years RBS has forged a close working relationship with SAP, acting as a core transaction services and hedging adviser. The bank's role has grown as the relationship has developed and today RBS is a member of SAP's leading group of banks that provide financial services and advice across a broad range of banking products. RBS currently runs commercial accounts for SAP across Europe, North America and the Middle East as well as settling treasury payments across 8 countries. In addition RBS also operates a euro cross-border cash pool, enabling SAP to manage liquidity efficiently and maximise use of its working capital.

While integrating the recently acquired Sybase Corporation into SAP's Enterprise Resource Planning (ERP) system, SAP wanted to further improve its treasury efficiency. It decided to implement the new XML CGI formats for credit transfer and payment status, triggered by SAP's application SAP Bank Communication Management, for payment processes.

The new technology ensures that SAP's overall cash management infrastructure is more flexible – while also highlighting its technical ability. The key challenge was to introduce the new formats across an established payment factory that handles thousands of daily payments for 55 subsidiaries across more than 45 countries, using the SAP standard solutions for the entire process.

Seen as an important strategic technology for SAP's future growth, the new CGI solution ensures greater efficiencies and enables the company to operate at the lowest cost possible. RBS’s pivotal role in ensuring the success of the European roll-out has created a solid platform for full global implementation.

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