|Sibos 2014 special edition|
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There are three key factors to ANZ’s push into cash management and related areas, says Alan Huse, acting head of global transaction banking, ANZ international and institutional banking.
Enabling its corporate clients to manage their working capital cycle better through enhanced products and services is one. “Delivering on ANZ’s super regional strategy by providing connectivity for our customers across the region, through access to liquidity, payables, receivables, payments solutions and financing options across multiple geographies,” is the second. And the third, he says, is that transaction banking is important for ANZ because it is a crucial “source of funding, efficient user of capital and provides a ‘flow’ source of revenue and transactions”.
That last reason is exactly why many international banks are focusing so much more time, money and energy on transaction banking, a focus that is beginning to win some of them greater recognition from shareholders.
Gaining recognition among corporate clients is no less difficult, but ANZ is gaining traction in its core market of Australasia, as well as in broader Asia and globally too.
ANZ was ranked 21 as a global cash manager for non-financial corporates this year, its highest position in the last five years, according to Euromoney’s 2014 cash management survey.
In Australasia, ANZ has been ranked third in the past two years, while in Asia this year it was ranked a solid 13.
With some momentum behind it, ANZ is planning to capitalize on the regional footprint it has to push its transaction banking business further.
“With the rapid growth in trade, capital and wealth flows from our home markets into Asia Pacific, there are significant opportunities for us to be more relevant to our customers,” says Huse.
And ANZ’s clients range from global multinational companies, local corporates, banking and non-banking financial institutions to corporate and commercial SMEs, and are spread across industry sectors such as natural resources, agribusiness, property, consumer services, manufacturing, transport and healthcare, among others.
|[We] anticipate building a deep regional renminbi capability across all our product areas|
ANZ is helping many of these clients connect with fast-growing Asia Pacific markets, particularly China. “The biggest change over the last five years has been the continuing trade and capital flows with Asia,” he says. “China is now 23% of Australia’s two-way global trade, compared with 13% just five years ago.”
Improving working capital cycle efficiency is also a priority.
“Overall, working capital is getting far more attention than it did prior to the financial crisis,” says Huse. “The market is demanding greater supply chain efficiency and, increasingly, businesses are being measured on their ability to effectively manage working capital. There is also a global move to more open account financing.”
He adds: “Key priorities for corporate treasurers and CFOs also revolve around regional management of their liquidity and balances, technological ease to execute transactions and diversify risk that they had faced during the financial crisis. As a result, we see more and more customers setting up regional treasury centres in Asian hubs to help manage their regional flows efficiently.”
ANZ operates an integrated transaction-banking model, with oversight of cash and trade businesses across channels, sales and product areas, with the provision of specialization in specific areas where clients need it most.
“This allows us to increasingly develop solutions that address our customers’ broader working capital needs – the best examples of this occur across the receivables and payables finance offerings that combine financing and payment flows,” says Huse.
He adds that ANZ’s new integrated digital platform, ANZ Transactive Global, is another example of where the bank has responded to client needs for greater simplicity, visibility and a more “intuitive, functionally rich account-reporting interface.”
Technological innovations are important, and Huse says ANZ’s host-to-host capability is both innovative and flexible. “At the heart of this is the flexibility provided to our customers to use whatever file formats and processes they prefer working with.”
The bank is also looking to bring to market a new client platform in 2015, he adds, that allows them to access multiple products and services across cash, trade, markets and loans via one channel and one single sign-on.
And on the trade side, ANZ earlier this year became the first Australian bank – and one of 12 banks globally – to offer the trade settlement solution known as bank payment obligation (BPO).
In the next 12 to 24 months Huse says ANZ will continue to focus on maintaining its market share in its home markets of Australia and New Zealand while leveraging “this to support our regional growth”.
“At the same time,” he says, “we see opportunities in supply chain and structured trade finance markets and anticipate building a deep regional renminbi capability across all our product areas, as this currency continues to build international relevance.”