18
CASH VISIBILITY Global cash visibility: a smarter way
At a time when corporate treasurers require ever-greater cash visibility and agility, Ron Kors, Executive Vice-President, Bank Mendes Gans (BMG), a member of the ING Group, and Dick Oskam, Global Head Transaction Services Sales, ING Wholesale Banking, explore alternative routes to cash centralisation
IBS Journal: Why is cash centralisation such a high priority for treasurers today?
Dick Oskam: Continued market volatility is highlighting the need for effective management of working capital and excess liquidity, whilst maintaining corporate borrowing at minimum levels. Mitigating counterparty and country risk are also key concerns for treasury professionals, given the uncertain geopolitical outlook, as well as complying with new tax and other regulations. As such, treasurers are under mounting pressure, both internally and externally, to ensure that they have full cash visibility and accessibility, right across the group.
Ron Kors: In addition to digital tools such as Virtual Bank Accounts and Virtual Cash Management, which Dick will elaborate on, one of the tried and tested ways of achieving the desired level of visibility, control and accessibility is by centralising cash through an overlay pooling structure.
IBS Journal: Is that feasible, a truly global cash pool?
RK: A global cash pool can certainly be achieved, but it depends on the capabilities of the corporate’s chosen cash management provider. Many
www.ibsintelligence.com © IBS Intelligence 2016
Dick Oskam
current cash pool offerings leave companies with no choice but to set up several regional pools, rather than a single global one. As well as failing to deliver full cash centralisation, this can lead to unnecessary FX swaps, if one regional pool is long cash and another is short, for example.
DO: Many so-called ‘global’ cash pools can only be achieved for major world currencies, with corporates unable to add more exotic currencies. What’s more, the vast majority of global cash pools or even regional cash pools do not operate across multiple banks – which is far from
ideal when corporates are required to diversify their banks and manage risk geographically.
RK: At BMG, we offer a global cash pool solution which forms an umbrella on top of the corporate’s existing banking infrastructure. This overlay approach avoids extra in-country accounts and enables treasury departments to change bank relationships when necessary, without disrupting the operation of the pool. It works multi-entity, multi-currency, and multi-bank.
IBS Journal: What are the mechanics
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52