North America: Tuning In To Treasury Needs

In the wake of the US tax overhaul, corporate treasuries brace for repatriation of assets.

US-based corporations hold around $2.6 trillion in earnings overseas; so President Trump’s new tax plan, which involves a repatriation tax holiday, should see companies move at least some of their cash back to the US.

Whether this means companies will reinvest into their core business or buy back stock remains to be seen. During the last repatriation holiday, in 2004, most businesses merely bought back stock. Between January 1 and February 6 this year, buybacks doubled over the same period last year.

With interest-rate hikes anticipated in 2018, though, it’s likely that companies that borrowed in the US in order to avoid taxes will pay off some of that debt. When rates rise, treasury teams focus more on working-capital optimization.

Martha Beard, head of corporate sales in North America treasury services at J.P. Morgan, believes it’s critical that banks respond to market demands for a frictionless, consistent experience. “From real-time reporting, visibility and data insights, it’s about removing silo operating models and leveraging new tools to solve our clients’ problems,” she says. “When this happens, the end results are payment and banking services
that embrace simplicity and focus on the client experience with scalable, global architectures.”

Beard points to an “explosion” of services designed to enhance the client experience and to simplify and speed payments. “In some cases, these product offerings bypass treasury and direct their services to product and strategy groups,” she says. “Treasury plays an important role in providing counterparty discipline and the risk oversight needed to deliver flexible, durable payment operations and controls.”

One problem that banks will soon solve for US businesses is late payments. As the implementation of The Clearing House’s long-anticipated Real-Time Payments system went live in November, BNY Mellon and U.S. Bank became the first to transact over the new rail. The system will help the US catch up with the UK, where the Faster Payments scheme has been in place for nearly a decade, and Singapore, where Fast And Secure Transfers has operated for more than three years.

Adding agility to innovations can also drive future efficiencies. BNY Mellon’s Cloud-based NEXEN platform helps solve challenges, with scale, data, automation, speed and access to third-party solutions. It also generates predictive insights to drive decisions and anticipate client needs. By monitoring clients’ usage, BNY Mellon can continually enhance its offerings through NEXEN.

In Toronto, meanwhile, CIBC recently launched CIBC Innovation Banking, focused on providing strategic advice and funding to technology-sector clients as well as providing services from cash management and capital-markets advisory to deposits and personal-wealth management.

Vincent Iarocci, managing director and head of corporate cash management for crosstown rival TD Bank, stresses the importance of tailoring services to fit clients’ needs. “Our customer-service culture translates into high levels of customer satisfaction in treasury management,” he says. To achieve this, TD Securities employs a dedicated relationship management team, including four individuals who remain with the relationship before, during and after implementation. Each business, furthermore, has a designated cash-management relationship manager who is a consistent point of contact. “The true measure of our success,” Iarocci says, “is through the depth and tenor of our client relationships.”

North America

Best Overall Bank for Cash Management

J.P. Morgan

Best Bank for Liquidity Management


Best Bank for Payments and Collections

Wells Fargo

Best Provider of Short-Term Investments/Money Market Funds

J.P. Morgan Asset Management

Best Bank for Working Capital Optimization

Bank of America Merrill Lynch