From the September/October 2012 issue of Treasury & Risk magazine

Back to Basics

Building Blocks for Next Generation Treasury

Akbar Poonawala, Deutsche Bank’s Americas Head of Global Transaction Banking, says that the crisis of 2008 and its ongoing aftermath has impacted the way that business is being done.   Today, cash management depends on a variety of sophisticated services designed to enhance efficiency and transaction visibility for companies around the world. Especially now there is increased focus on introducing innovative solutions that help Treasurers add value for their companies.  While many of these new services appear complex at first glance, they are built on the basic stepping stones of efficiency and transparency.

Deutsche Bank Global Transaction Banking’s Shahrokh Moinian, Head of Trade Finance and Cash Management Corporates of the Americas, and Martin Runow, Head of Cash Management Corporates, North America, discuss the region’s latest treasury management trends.

What are the corporate cash trends for North American multinationals?

Shahrokh Moinian (SM): Multinational corporate (MNCs) in the Americas are adapting to the great amount of change in terms of cash and treasury management.  With the need to increase controls while driving efficiencies, Treasurers are finding themselves going “back to the basics” as this often times holds the key to meet their objectives.   Focusing on centralization, automation and standardization facilitates the control corporates require, but also helps create other efficiencies at global, regional and local levels. Treasurers are using these processes for greater visibility of cash balances, more reliable cash flow forecasting, tighter cash flow control and enhanced process efficiency.  The challenges are really the same but intensified, and interestingly the answer often lies in the fundamentals.



Martin Runow (MR): Treasurers are refocusing their attention on utilizing centralized treasuries, in-house banks, shared service centers and payment factories.  Shared service centers and payment factories for instance offer a single interface across all divisions, facilitate standard accounting treatment, uniform controls and oversight and optimize resourcing. Many North American MNCs are now seeking to take these structures further and drive the next levels of efficiencies to produce greater control over working capital, liquidity positions and risk exposures. For instance, more and more corporates are evaluating payable on behalf structures, whereby one entity pays on behalf of the others, thereby reducing the need for current accounts.  Others are looking to link financial supply chain services to their payment processes to allow the recipient to receive early payment at a discount.

What do treasurers need not to lose sight of?

SM: Treasurers are expected to deliver more than ever.  Moving your company to the next level is no small task as it is quite easy to lose sight of the larger strategic picture when mired in the hectic daily challenges of treasury management.  MNCs need to continually evaluate the solutions that are available as there are some real opportunities to move the needle.  Many of our MNCs are utilizing Deutsche Bank’s Next Generation Treasury Solutions such as integrated working capital management and comprehensive liquidity management.

MR:  Visibility of cash is of particular importance to corporate treasurers who are under increasing pressure to do more with less.  Treasurers have fewer staff and less financial resources and are trying to reduce debt and free-up trapped cash.   You can’t manage to a blind spot, so it has to start with having better visibility to your global cash positions.

How important is it to focus on working capital management?

MR: The world of working capital has expanded since the credit crunch of 2008.  Credit is scarce and expensive and finding external funding sources is likely to remain challenging.  Therefore, identifying internal funding sources is critically important.  Additionally, company priorities have changed and many corporates are increasingly concerned about counterparty risk and working capital management in their supply chains.  As a result, banks are now offering financial supply chain products that offer an automated and efficient way of delivering liquidity and counterparty risk mitigation.

SM: Financial supply chain (FSC) is an area where there has been dramatic progress and the US is one of the leading regions in this resurgence.  Deutsche Bank’s Next Generation Treasury Solutions offer an integrated working capital structure for corporates that combine supply chain and payment factory structures using the same platform.  End-to-end working capital management can be achieved through the combination of Cash Management and Trade Finance to meet working capital needs. 

Cash has always been a challenging aspect for corporates.  Where do you see it heading?

MR: Wringing cash and checks from collections is a major focus.  The Internet and mobile devices serve as cashless collections communication channels for viewing and approving invoice information.  Clients can take advantage of a consolidated hub for transaction matching, reporting and reconciliation. 

SM: Cashless collections streamline, automate and control collections while eliminating certain weaknesses such as costs of transport and security, fraud risk, manual processing and exception handling, as well as long delays in payment receipt.  Overall, it improves working capital by eliminating idle balances and increases operational efficiencies and control.  Additionally, cross-border ACH and virtual accounts add value by reducing the need for currency accounts, to bridge global barriers to efficiency.

How is Deutsche Bank using advances in technology to improve the customer experience?

SM: Deutsche Bank has responded with the development of the Autobahn App Market, launched by the Bank’s Global Markets Division at the beginning of 2011.  The Autobahn App Market is the first App-based electronic offering for clients in the financial services industry – allowing them to benefit from enhanced treasury functionality.

An App-based operating model, provides a single access point to different bundles of services. The key benefit of such a system from a Treasurer’s perspective is that it allows cash and liquidity management products and services to be grouped according to individual company requirements and business cycles –Treasurers can select the precise tools they need in a clear and efficient manner.

MR: The App Market offers ease-of-use in addition to enhanced functionality.  As the corporate world becomes increasingly influenced by technology developments in the consumer space –for example, the rising popularity of social media tools – product usability is emerging as a key corporate requirement and differentiator among banking technology providers. In addition to enhancing operational efficiency and improving the transparency of information, reports and records, today’s treasury tools should be intuitive and easy to use. Consumer products have set a high standard in this respect, and it is the challenge of banking technology to keep pace.

One way in which the Autobahn App Market seeks to do this is through offering a degree of customization and by allowing customer involvement and feedback to shape the development process. Deutsche Bank adopts and advocates a flexible architecture model with respect to solutions development that is based on client input and ongoing feedback. Using the Autobahn App Market as an example, this development model means the solution allows users to consolidate the services they use in a convenient – and consistent – way.

What should we expect to see in the future?

MR: Change has been the only constant.  Deutsche Bank is committed to staying at the forefront of this sustained change.  In an evolving market, Deutsche Bank continues to invest in improving and evolving its offerings by focusing on clients.  We need to provide the basics and remain on the cusp of innovation so that we can drive value across the organization.

SM: Clients are really looking for a consultative approach.  By conducting “white board” sessions with clients, we walk through their processes in and work to identify potential areas of improvement.  This is through Deutsche Bank’s dedicated advisory, Trade & Cash Solutions, which was established in the Americas to assist our clientele.  These sessions can generate much more – this is yet another opportunity to listen to our clients.  In exploring the intricacies of their processes we develop a deep understanding of their needs and requirements. At times, this has led to untapped market needs, which may evolve into a Next Generation Treasury Solution that is appropriate for them and replicable for other clients.  This “Private-banking” type of coverage and service approach has improved the overall client experience in conjunction with our “back to basics” offering that supports our Next Generation Treasury Solutions.


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