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Treasury & Capital Markets
What corporate treasurers want from banks
Corporate treasurers find most valuable a transaction bank’s ability to help with centralizing account management in view of challenges pose by varying market infrastructures and complex FX regimes across Asia, a new survey reveals.
Darryl Yu 28 Sep 2016
Corporate treasurers
Corporate treasurers find most valuable a transaction bank’s ability to help with centralizing account management in view of challenges pose by varying market infrastructures and complex FX regimes across Asia, a new survey reveals.
Over half (53.8%) of the survey participants say that they saw centralization as a top three requirement from their service provider. “Centralization is attractive to corporates because they can improve the return on cash positions and gain more control of their cash flows,” according to the 2016 World Payments Report by Capgemini and BNP Paribas.
Looking to address this centralization issue, corporates have started to actively establish shared service centres, regional treasury centres and in-house banks. Treasury data from The Asset Benchmark Research reveals that close to a quarter (24%) of surveyed Asian companies have centralized treasury structures in place.
Already several banks have started to guide corporates on their centralization journey. Last week for example Deutsche Bank executed its first cross-border renminbi netting transaction for Bosch allowing the German corporate to centralize its FX management from its German headquarters.  
The WPR also cited the increased transaction optimization as a key goal going forward with 50% of surveyed participants seeing it as a top three service from their partner bank. Optimization in the form of automation is driving banks to experiment with technologies such as blockchain.
“By enabling direct transactions, the blockchain could make most business payments cash-like, reducing or eliminating late payments and so freeing up capital,” comments a UBS blockchain whitepaper. Standard Chartered Bank, for instance, made a strategic investment into Ripple, a distributed ledger company and recently leveraged in Ripple’s technology to execute a cross-border payment in less than 10 seconds.
Increasingly, treasurers are seeking digital and analytics-based solutions to better support the decision making process of the overall business. The survey shows that 35.7% of participants considered this as a top three requirement in transaction banking. “Analytics are also helping corporate treasurers to identify and mitigate risks that arise in procurement and inventory management,” says WPR. In Asia, banks such a Singapore-based DBS Bank have been offering a working capital advisory based on the data of 65,000 companies to clients aiming to unlock cash.
While the key transaction banking requirements from treasurers are clear, the challenge for banks going forward will be to break down the silos of legacy technology. More than 85% of banks and non-bank executives from the WPR believe changing internal infrastructure will be a significant challenge for transaction banks in the future.
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