Cash management for financial institutions: uncertainty breeds competition
Cash management for financial institutions is broadly similar in terms of the kinds of products provided by banks to corporates. Moreover, product development is usually combined in a centralized group that takes input from both FIs and corporates so that new products generate maximum value, although, of course, some solutions are developed for different markets, albeit often using the same underlying technology.
However, there are two crucial differences between cash management for FIs and corporates. The first is that as many FIs are banks they will often require products to re-sell to their own clients. "We operate almost a wholesale model when working with FIs," says Paul Camp, global head of cash management, financial institutions, at Deutsche Bank, which performed strongly among FIs in Euromoney’s poll.
For example, Deutsche Bank’s recently launched FX4Cash offering brings together the bank’s 21% global market share of FX trading with a payment capability that allows FIs to use one account to make payments. "For FIs such as universal banks with retail branches it means they can offer 77 currencies off a daily rate sheet whereas previously they might have been limited to a handful of currencies," explains Camp. "Meanwhile, the real-time feed allows that bank’s head office to provide spot pricing for their corporate clients. Effectively we enable them to do more business."