Political and economic uncertainty, coupled with cyber and data secu-rity, are uppermost in the minds of corporations that do business in Central and Eastern Europe.
As economic fundamentals deteriorated in the region—in 2016, GDP growth fell to 2.9% from 2015’s 3.6%, says Focus Economics—and the political will for economic reforms ebbed, companies were retrenching and banks were refocusing their assets in key markets in the region.
With some western banks retreating from Eastern European markets in recent years, corporate treasurers have had to focus on efficiency gains to ensure liquidity and access to working capital.
At the same time, treasurers in CEE are struggling with some of the same issues that their global counterparts are facing—including the need to define and manage risks involving the rapid pace of technological advances and to learn how best to make use of those advances.
To manage liquidity more effectively, corporate executives need to access higher volumes of data to unlock cash, says Dick Oskam, global head of transaction services sales at ING, which won Best Bank for Payments and Collections in CEE in this year’s awards. “Some of the areas that can most benefit from data analytics are liquidity and cash management, trade finance and risk management,” he explains. Oskam notes that data engineers are using the latest statistical models, machine learning, text analysis and other advanced techniques to study large amounts of data and explore applications.
“There are a myriad of opportunities and applications for data analysis,” says Oskam. “The challenge lies in unlocking the right data and getting the information you need from huge data pools. We are working hard to make data accessible for new analytical techniques—and together with our clients, starting to explore use cases to unlock value with data engineering.”
Oskam says two major issues that concern corporate treasury executives in the region are cybersecurity and data analytics. “There is no doubting the scale of [the cybersecurity] challenge and the importance of industry collaboration. It’s of concern for ING, for our clients, and in our personal lives.” Oskam says that recent cyberattacks have shown that investment and wholesale banks are much bigger targets than retail banks, as they handle larger-value transactions.
“Increased accessibility to knowledge on how to breach cyberdefenses is fueling the volume of attacks,” says Oskam. “At the same time, exploits such as zero-day vulnerabilities, malware on mobile [devices] and botnets using connected devices continue to cause significant damage.”
Corporate treasurers in the region are keenly aware not just of cyber risks, but also of the business and macro risks that they face—from rising instability in Ukraine and Russia to the trade impact of Brexit. In fact, some analysts have suggested that economies in CEE could feel the greatest effect from Brexit. Analysts at Focus Economics note regarding Brexit: “Waves of contagion are expected to hit CEE through trade, investment and financial challenges. Lower confidence will impact investment and trade will suffer due to the expected slowdown in the eurozone.”
And through it all, treasurers in the region continue to focus on managing cash, understanding the impact of regulatory change and ensuring the availability of both long and short-term liquidity.
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Central & Eastern Europe |
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Best Overall Bank for Cash Management |
Commerzbank |
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Best Bank for Liquidity Management |
UniCredit |
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Best Provider of Short-Term Investments/Money Market Funds |
Deutsche Asset & Wealth Management |
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Best Bank for Payments and Collections |
ING Wholesale Banking |
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Best Bank for Working Capital Optimization |
Raiffeisen Bank International |
CENTRAL & EASTERN EUROPE
Best Overall Bank for Cash Management
Commerzbank
Commerzbank has a footprint on the ground in most countries in the region, backed by global cash management solutions. Global Payment Plus, the bank’s online multibanking application, provides global visibility of accounts and transactions, and its corporate mobile app offers best-of-breed functionality and services, including multibank visibility of accounts.
The bank has increased corporate lending by 12% since 2013 and holds a significant share of the trade finance market in the region and is a global leader in export finance. Its working capital solutions help companies benefit from faster flow of funds and increased transparency in the trade cycle.
Commerzbank has a CET1 ration of 13.6%, or fully loaded CET1 ratio of 11.8%.
Best Bank for Liquidity Management
UniCredit
UniCredit has one of the largest regional footprints in CEE, with an on-the-ground presence in 14 countries. It is a top-five bank in most of these markets. The bank provides multibank cash pooling across the region and offers both zero balancing and target-balancing pooling structures. UniCredit stands out for both its regional and its local-market solutions. For example, UniCredit Bulbank, based in Bulgaria, offers not just cash pooling and liquidity and interest optimization solutions, but also physical cash collection services across the country. In Romania, the bank offers zero-balance, target-balance and reverse-balance cash sweeps along with domestic and regional cash pooling. In Hungary, the bank offers cash pooling, along with a product called EuropeanGate, which is a multibank digital banking solution connecting accounts across CEE.
Best Bank for Payments and Collections
ING
ING has a presence on the ground in all of the major markets of Central and Eastern Europe, and has been in most markets consistently for 20 years or more. It offers domestic and multinational corporates a full suite of solutions to supports their treasury and financing needs.
The past year saw the further development and roll-out of ING’s digital banking platform, InsideBusiness, which offers clients a single point of access to the bank’s products and services—including payments and collections, e-banking, financial markets and lending. Last year, the bank launched a single sign-on for all payment services.
But the biggest development in recent years is the ING Virtual Cash Management solution. VCM is a multibank self-service portal to manage group cash, which enables corporate in-house banks to provide both payments-on-behalf-of (POBO) and true collections-on-behalf-of (COBO) for subsidiaries.
The bank also holds annual internal ‘innovation bootcamps,’ during which the best 100 ideas put forward by ING employees are presented, and winners receive a budget to develop and implement their idea.
Best Provider of Short-Term Investments/ Money Market Funds
Deutsche Bank Group
With a longtime presence in the region, along with its European and global solutions, Deutsche Bank is well positioned to meet the investment management needs of both local companies and multinationals.
Given the diverse markets and local banking systems, changing regulatory structures—plus the current investing climate—managing short-term investments can be challenging. And trying to eke out some earnings while focusing on capital preservation and ensuring necessary available liquidity is almost impossible.
Deutsche Bank also offers corporate clients a range of tailored liquidity management services, including automated cash concentration, pooling and intraday or overnight investment services. The bank’s products provide real-time information and offer a global view of cash positions, allowing companies to invest excess liquidity more strategically on an intraday, as well as overnight, basis.
In addition, Deutsche Bank’s asset management arm has Eu186 billion in asset under management in EMEA ex-Germany, is one of the top bank-owned asset management firms in the region and globally, and has a range of investment solutions catering to the current climate and investment needs of corporate clients.
The bank has a CET1 ratio of 11.1%.
Best Bank for Working Capital Optimization
Raiffeisen Bank International
The bank’s longtime presence in Central and Eastern markets have given the bank a truly regional outlook and product set, while also providing solutions tailored to specific markets in the region. On the working capital front, Raiffeisen has unique offerings that match its client base in each market, and enable suppliers—and corporates—to make their order-to-cash or procure-to-pay cycles more efficient and allow them to unlock trapped cash.
One of the big things that stands out about the bank is its focus on solutions that solve problems for clients. As an example, the Cash Management Billing System (an honoree in Global Finance’s Innovators program) may seem like a simple solution, but it answers a longtime desire on the part of cash managers by providing transparency to the bank-corporate relationship.
The bank has a fully-loaded CET1 ratio of 12.3%.
