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PROMOTIONAL FEATURE
Winning the race for corporate share of wallet
Günther Peer, Vice President at Reval, discusses treasury trends to help banks improve their offerings for corporate clients.
The world’s leading banks are afraid to lose customers. Statistics predict a 20% loss in corporate clients over the next five years, being dissatisfied with the cash management offerings of their primary bank. Why are banks under such immense pressure? Because their customers are changing. Reval’s “Global Treasury Benchmarking Survey” of more than 600 corporate financial professionals from all regions understand how corporate treasury is changing and what banks can do to attract new business instead of losing it.
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Globalisation will increase, say 42% of finance professionals surveyed. As corporate treasuries grow internationally, they are challenged to manage cash positions, liquidity, FX and interest rate risks across multiple banks, currencies and countries. Often the growing organisation’s existing treasury set up does not match the new requirements and the finance team starts reviewing organisational structures and tools.
To control cash positions and exposures across the enterprise, most treasuries increase centralisation. Today, 93% of treasuries already have implemented centralised structures in some shape or form, and there is a big push towards further centralisation as companies continue to grow internationally. Within the re-organisation, finance teams also take a look at their bank portfolios.
Corporates are looking for bank partners that offer them comprehensive services in their domestic markets and their new international markets. They prefer banks that have a presence in every market their company is operating in and those that offer services like cash concentration or cash forecasting across borders, currencies and banks. These capabilities enable corporate
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Reval’s survey shows that 86% of finance professionals turn towards technology to optimise their processes, increase centralisation and roll-out global standards. As bank partners are the corporate’s primary advisor in financial matters, corporate bankers are increasingly approached with technology questions.
Traditionally, bank portals give an overview on accounts with the respective bank, while also enabling international payments. For a manufacturing company headquartered in Germany that expands across Asia, this level of technology support was no longer enough. As their primary bank partner does not offer full support in Asia Pacific, the finance team began working with local banks in China and Singapore. Operating in Europe, it was easy for corporate treasury to keep an overview on enterprise-wide cash positions, but as the company entered new markets in Asia, the finance team had to collect financial information from multiple bank portals to determine their daily cash position. Foreign currencies complicated the task. However, corporate treasury needed visibility into all of its accounts, regardless of bank, currency or country. After having
treasury to gain visibility and control into enterprise- wide cash positions, which is where well-established banks begin to feel the pressure.
Mid-sized financial institutions often do not have global coverage and even the world’s largest banks struggle to offer all of their services in all regions. In addition, because corporations have individualised structures and requirements, they require flexible cash and liquidity management solutions, which many banks cannot provide today.
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