Cash Management Survey 2015: How to build a banking business around cash
Euromoney Limited, Registered in England & Wales, Company number 15236090
4 Bouverie Street, London, EC4Y 8AX
Copyright © Euromoney Limited 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Cash Management Survey 2015: How to build a banking business around cash

Many banks now say cash management is the heart of their business, not just for the returns it can generate in its own right but also for the opportunity to pump other products and services through their networks. Euromoney’s survey reveals banks still have a lot of work to do to turn aspiration into reality


Results index

When it comes to banking propositions, one stands out more than any other over the past five years. Regardless of whether an institution is a big global bank, or an ambitious regional pretender, it is almost inevitable that the chief executive will have insisted at some point that transaction services lie firmly at the heart of the business.



Take Deutsche Bank, whose new CEO John Cryan is trying to find a long-term plan for a bank mired in a low return-on-equity purdah. Everything at Deutsche appears to be in question – apart from transaction services. That’s no surprise: bank-wide ROE for the first quarter of 2015 was a measly 3.1%. But for full year 2014, Deutsche’s global transaction banking division delivered a more-than-healthy 13%. Take Citi, just about the only bank still offering a truly global network to its clients. At the annual Sibos conference in 2014, a keynote speaker was Jamie Forese, president of the bank and a life-long capital markets and investment banker. He could not have been clearer that Citi’s transaction services business, which proudly transacts trillions of dollars a day for its clients, would be integral to the bank’s growth.

The heart of the business


Buzzwords flow off bankers tongues when they talk about transaction services: it’s sticky, it’s low-capital, it’s high return, it’s the bread and butter of the business, it’s in the DNA of the firm.

That’s all true. But transaction services are attracting attention at the top of the financial industry’s C-suite for another reason: because being at the heart of a client’s daily operations, a close cash management relationship can pump business into other products and services that banks offer them.

Michael Spiegel, head of trade finance and cash management for corporates at Deutsche Bank, says: “The bank has never looked at the transaction services business in isolation.”

Frank-Oliver Wolf, head of transaction services Germany at Commerzbank, says: “Banks have been attracted by the stable revenues – the business does not have too many ups and downs. Cash management is a key element of banking. If you have a good cash management relationship, you will often pick up other parts of the business. You cannot do this unless you have deep communication with the client.”

Lin Hong, director of corporate banking, Bank of China, says: “In recent years, we have seen the transaction banking services as the most important strategic business and taken an active part in bidding for transaction projects initiated by our strategic customers.”

Any banks that haven’t got the point yet may be consigned to playing catch-up. Rajesh Mehta, head of treasury and trade solutions, EMEA, at Citi, says: “Many international banks are realising that they need to start improving their structures. Those that have already prioritized the development of the transaction banking business are ahead of the game.”



"The product-silo approach needs to be replaced with a more client-centric way of thinking, to improve the overall client experience.”
- Rajesh Mehta, Citi

Just how advanced is the push to make cash management the hub for other revenue streams for banks that are desperate to increase their share of wallet with core clients?

The results of the questions put to nearly 24,000 corporates and 3,000-plus financial institutions in this year’s Euromoney Cash Management Survey make for interesting analysis – and paint a mixed picture of achievement and opportunities begging for the banks involved.


First, the good news. If you have a cash management mandate, there’s almost an 80% chance that you will also carry out payments for your client, whether it’s a corporate or financial institution. The surprise, perhaps, is that the figure is not even higher, given the close relationship between cash and payments.

Bankers often talk about the importance of relationships with treasury teams, given how much other business now flows from them. In terms of related products, none is more symbiotic than foreign exchange. Again, the numbers are good – if you’re a cash management provider, there’s roughly a 70% chance that you’ll also carry out FX trades for that client.

For all that cash management is a core business, by tradition no single relationship between a bank and its clients is more important than the provision of credit. It’s perhaps surprising that the two do not go more hand in hand: among corporate respondents, less than 50% combine a lending with a cash management relationship. Unsurprisingly, given the nature of their business, the proportion for financial institutions is only a third.

Next we get into the high-margin business that banks desperately want, but often only the bigger clients need. Among corporates, one-fifth give mandates to their cash managers for capital markets business; among financial institutions, the figure is more than three in 10. Among both corporates and financial institutions, around one in seven employ their cash management banks for risk management. And just 7% of clients have used their cash managers for M&A, which is a much less frequent requirement for most.

Of course, the bigger clients are more likely to use a greater number of these products and services. But our analysis shows that from a products per client point of view, banks can still do a lot more to leverage their relationships.


For companies with an annual turnover of more than $100 billion, the average number of products they use with their cash managers is just three. These, remember, are the biggest clients whom every international bank chases for business. The proportion rises for companies with turnovers of $25 billion to $50 billion, before falling away for smaller clients with fewer needs.

There are a number of interesting discrepancies by region. Given it is the most developed financial market, you would expect North America to have the highest penetration of capital markets (37%), risk management (18%) and M&A (16%) business among corporates of any region.

You might not expect that the region in which lending and cash management are most closely aligned for both corporates (62%) and financial institutions (56%) is Latin America – in both cases, these figures are almost double the percentage in Asia, which is arguably the most vibrant battleground for cash management and ancillary business

Opportunities for growth

This analysis shows that banks have some way to go to reach their stated goals. What are they doing to get there?

First, there’s an opportunity to win business. As Paul Taylor, EMEA head of sales for GTS at Bank of America Merrill Lynch, says: “We are starting to experience some shifts in the market. We’ve seen several GTS banks pulling out of geographies, or the market altogether. This is creating market concern as their departures in some regions leave a potential shortage of supply. No bank can avoid the regulation that is being introduced in some markets. At the same time, our clients need banks to be offering transaction banking in these markets because if the banks can’t offer the range of services that corporates need, then who will?”

For every bank that withdraws from the market, there’s usually at least one bank attempting to grow its business. Carole Berndt is trying to do just that across Asia and beyond for ANZ. Before becoming managing director of global transaction banking at the Australian bank, she had a similar global role at RBS, which after her departure announced the closure of its international cash franchise.

 “I don’t have to fight for attention in this role as I have done in previous positions, where GTS wasn’t always the top priority,” says Berndt.

She is enthusiastic about the opportunities she sees from her new base in Hong Kong. “Asia is a great place to play. It is constructive experimenting, trying things out in a fast-changing environment,” she says. “Over the last decade ANZ has pushed into the Asian market in a way that has been unmatched by other domestic banks. This needs a solid approach to the business, it is not possible to move out rapidly across a whole geography without having aligned partners, resources and technology to support it.”

Lum Yin Fong is global head of product management for cash management and trade finance at Singapore’s DBS Bank, another bank looking to expand its regional footprint through transaction services. Over the last five years, it has invested heavily in the business, which now accounts for 18% of group revenues.

“As the contribution to the world’s economic output continues to pivot towards Asia, we’ll see an increasing number of Asian companies internationalising and seeking the requisite transaction banking solutions to support this,” says Lum. “Western MNCs, on the other hand, need to ensure that their core global bank relationships reflect the economic construct of the globe. As a result, banks, including DBS, are adjusting to the rising demand for transaction banking solutions in this region.”

Berndt believes the rest of the world could benefit from seeing how Asian banks approach the business: “To see what corporate banks will look like tomorrow, think about markets and the investment banks playing along together, the way the Asian banks do in their markets,” she says.


Moving GTS forward is not as simple as pumping resources into the business. It requires encouraging various teams in the bank to break down silos and work together. ANZ has pushed to expand into the Asian market in a slow and controlled way. Berndt says: “The model we run in international and institutional banking is collectively managed. We work together on making decisions that are for the greater good of our customers and business.”

The collaborative approach is being used elsewhere. Joanne Scheier, transaction services product manager for corporates at BNY Mellon, says: “Internally we have projects and structures in place to encourage collaboration. Teams will work with the sales people to identify opportunities in other lines of business and in other geographies.”   

It’s not just the bigger global banks from developed markets that are taking such an approach. DBS’s Lum says: “To comprehensively serve customers’ needs, we created a one-bank model. We built multiple linkages within the bank between customer segments (consumer, wealth, corporate and SME) and our product groups (treasury, transaction banking, capital markets and research). This enables us to offer the most relevant products and services to every customer. By breaking down product and customer segment silos, we are able to manage customer relationships holistically.”

The potential for greater collaboration between businesses is possibly best represented by increasing collaboration with FX teams.

Citi’s Mehta describes the rationale: “The move towards the FX team is extremely interesting. We are working closely with our counterparts in FX and in markets. It is at a stage where the product-silo approach needs to be replaced with a more client-centric way of thinking, to improve the overall client experience.”

But banks would be mistaken in thinking there is a one-size-fits-all model to follow. Mladen Zaprianov, head of CEE trade finance and STEF in UniCredit Bank Austria, says: “All the banks are now claiming that transaction banking is important. But it comes down to the ability of each of the players to recognise and think through their individual approaches. Each bank needs to find its own model.”

Strategic alignment

Bringing the teams more closely together means pushing down the walls built up by old working methods. Alex Manson, global head of transaction banking at Standard Charted, says: “We orchestrate collaboration as a formal process and, for example, set up joint ventures with sales and product groups within the organisation.”

Steve Everett, global transaction banking director at Lloyds Bank Commercial Banking, says: “To be successful, you need to ensure teams responsible for delivering these services to clients are aligned against strategic objectives.”


A crucial factor is the need for banks to get their technology right. People might be working more closely together, but the impact of this will be limited if internal systems cannot relate to each other.

David Hennah, head of trade and supply chain finance at Misys, says: “We’ve been seeing more banks investing in transaction services since the financial crisis. It is a pivotal strategy of the banks now, albeit one that for the banks is under threat from other financial institutions and third-party platforms.”

Pulling different areas of the bank into the existing systems is relatively easy. “On the tech side it can be very simple to just add additional users through a new profile and issuing extra tokens,” Hennah says.

Relationship management

But banks have to be careful about how they share information internally. “There are considerations around the rights of access to each section. Not every department can have full access to sensitive client information,” Hennah says. “For example, a bank that is executing payroll will not want everyone to be able to see what the CEO is receiving.”

This points to a new and vital role at the heart of transaction services – that of the relationship manager. Banks know that they can quickly alienate clients if they receive multiple phone calls and emails from different individuals within the bank. Receiving pooled levels of service was cited in the cash management survey as the prime reason to look for another provider: 80% stated it would be the main reason to make a change. Unhappy clients are likely to vote with their feet.

Commerzbank’s Wolf says: “The focus is on the relationship manager and the specialist. Both have to understand everything that is happening for the client. The treasurer does not want to receive calls from different people trying to push their services. The relationship manager needs to know who is contacting them.”


Manson at Standard Chartered says: “Our relationship managers are product neutral and incentivised to maximise collaboration across the bank, and we report by client segment, not on product lines.”

Not all banks are getting the structure right, says Henna at Misys. “A challenge across the different verticals seems to be who owns the customer. There will be someone in treasury team who owns them, but then someone else in lending, cash, in trade. They will all have separate P&L but they will be trying to pull the client together as a single entity for their business.”

Gift this article