Global Winners: Leveraging Change - Global Finance Magazine

Regulation and technology have transformed treasury since 2008. Our global winners have turned those changes to advantage.

For most corporate treasurers, the 2008 global financial crisis may seem eons ago now. But there is no question that it has changed the treasury- and cash-management business indelibly. While the large, global cash-management banks remain fundamentally the same institutions, regulation has changed the way they operate and view short-term overnight deposits.

The banks still offer the same fundamental suite of cash-management services—payments, collections, liquidity and investment management—that they’ve always offered. Treasurers still grapple with centralizing treasury operations, managing interest rate, foreign exchange (FX) and liquidity risk, commodities and cash visibility across their global operations. The only problem that has gone away is a shortage of liquidity. However, the banks are more risk-averse and, because of regulation, they have to hold more capital on their balance sheet, which impacts their willingness to lend and the investment solutions they offer treasurers.

Markedly different, however, are the array of technology solutions now on offer to treasurers and the choice of providers. Fintech companies have well and truly entered the treasury- and cash-management domain, picking off niches of functionality: payments, working-capital management, FX and lending, where they can add more value than the banks. Treasurers, being risk averse, are not necessarily rapid adopters of these new technologies.

But the million-dollar price tags of most traditional accounting and enterprise resource planning software packages have meant that a lot of treasurers still use Excel spreadsheets. In the future, though, automating parts of their treasury and cash-management business processes should be as easy as purchasing an app. At least that is the promise under the Second Payment Services Directive and open banking. And who is to say that, in the future, our global awards for Treasury & Cash Management will not comprise a wider mix of technology companies and banks?

In fact, that’s already happening. While banks are becoming more like technology companies to compete in this area, new players are leveraging tech for new opportunities. Having the broadest global footprint is no longer enough to dominate. Technology is a great leveler, and local and regional banks are catching up with, if not surpassing, the large global players in some areas by leveraging technology in new and innovative ways. This trend is reflected in the mix of banks in this year’s Treasury & Cash Management global winners. For the first time, a Middle Eastern bank, Samba, is among our global winners.

Although largely present in the Gulf Cooperation Council countries, Samba, which won Best Bank for Payments and Collections in this year’s awards, has global aspirations. These are reflected by its investment in a new core banking system, a payment hub and a new front-end platform. Such investments will enable it to respond and adapt more quickly to customer needs and roll out new value-added functionality. Samba’s payments and collections functionality is used by leading airlines and travel agents to manage their accounts receivable online in real time. It processes $3.3 billion worth of transactions annually for the travel and airline industry.

Samba’s Hajj collections and payments system, which is associated with religious pilgrimages to Mecca, processes payments for hotel and transportation companies without any human intervention. Samba has also built bespoke solutions to manage escrow payments in the real estate market and for dividend and coupon payments, as well as an electronic settlement and billing engine.

Innovations in global treasury and cash management tend to be rolled out first in more-demanding markets where trapped cash and liquidity, and regulatory restrictions around liquidity structures and repatriation of capital, push cash-management structures to the limit. One bank that continues to innovate in this regard is Standard Chartered, which won the global awards this year for Best Bank for Liquidity Management and Best Bank for Working Capital Optimization.

Standard Chartered says it is creating “a new generation of banking,” encompassing clients’ entire ecosystems. By that, it means it is not focused on only top-tier corporations, but also the low-to-mid-tier companies in the large companies’ distribution and supply chains. By “banking the ecosystem” in Africa, Asia and the Middle East, it is well placed to address the working-capital needs of not only companies in these regions, but global multinationals the world over who source most of their goods and services from these parts of the world.

Beyond the catchy slogans, Standard Chartered launched a working-capital cash-flow forecasting tool for treasurers. It is also experimenting with global receivables financing on the blockchain and has built custom liquidity-management solutions for real estate developers. It continues to develop bespoke liquidity-management structures in markets like China where restrictions can make moving funds in and out of the country challenging.

One bank whose ongoing investment in technology continues to reap benefits is Citi, who won Best Overall Bank for Cash Management and Best White Label Systems Provider in this year’s awards. Its CitiDirect BE online digital banking platform is consistently ranked highly in global benchmarking studies. Citi has also embraced the new world of open banking and application programming interfaces with CitiConnect API, which transforms the way treasury- and cash-management services are consumed and delivered.

For example, CitiConnect API meant that treasury-software provider FIS could more easily integrate its Trax corporate payments factory with Citi’s Treasury and Trade Solutions to provide treasurers with enhanced real-time management of their transaction flows. The breadth and depth of Citi’s product offering for treasury and cash management also means its solutions are often white labeled by other banks to roll out to their customers. Citi is, in effect, not just a bank but a technology company investing millions in treasury and trade solutions every year.

Treasury and cash management is not just about servicing the treasury departments of the world’s largest multinational corporations and their subsidiaries globally. Banks also require treasury solutions, and it is in this area that BNY Mellon stands out from the crowd. Half of its global treasury-services business comprises services it provides to other banks, including US dollar, sterling and euro settlement. BNY Mellon Treasury Services also provides private-label treasury services to more than 150 banks.

Another stalwart in our global treasury and cash management awards categories is J.P. Morgan Asset Management, which boasts a wide range of highly rated US dollar, sterling and euro money market funds (MMFs) for treasurers to invest in. J.P. Morgan Asset Management is also active in Asia’s nascent money market fund industry. Regulation means short-term investment vehicles like money market funds are undergoing considerable change. These reforms are a hangover from the 2008 global financial crisis, which highlighted some vulnerabilities in MMFs—particularly if there were a large number of redemptions.

Suffice it to say that this year’s global winners reflect those organizations that have been able to turn regulatory and technological change to their advantage to build solutions that add value for their customers, automate manual processes and help treasurers move closer to the much-coveted holy grail of global cash and liquidity visibility.

Treasury & Cash Management Awards 2018

GLOBAL WINNERS
Best Overall Bank for Cash Management	Citi
Best Bank for Liquidity Management	Standard Chartered
Best Provider of Short-Term Investments/Money Market Funds	J.P. Morgan Asset Management
Best Bank for Payments & Collections	Samba
Best White Label Systems Provider	Citi
Best Bank for Financial Institutions	BNY Mellon
Best Bank for Working Capital Optimization	Standard Chartered

COUNTRY WINNERS
Angola	Standard Bank
Argentina	Banco Santander Rio
Australia	ANZ
Austria	UniCredit
Bahrain	Arab Bank
Belgium	KBC Bank
Botswana	Standard Bank
Brazil	Banco do Brasil
Canada	CIBC
China	DBS
Cyprus	Bank of Cyprus
Denmark	Danske Bank
Egypt	CIB
Finland	Nordea
France	BNP Paribas
Germany	Commerzbank
Greece	Eurobank
Hong Kong	Standard Chartered
India	HDFC India
Indonesia	PT Bank Negara Indonesia (BNI)
Ireland	Citi
Israel	Bank Leumi
Italy	UniCredit
Japan	Bank of Tokyo Mitsubishi
Jordan	Arab Bank
Kenya	Standard Chartered
Kuwait	Al-Ahli Bank
Lebanon	Blom Bank
Malaysia	CIMB
Mauritius	Barclays Bank Mauritius
Mexico	BBVA Bancomer
Morocco	Arab Bank
Namibia	Rand Merchant Bank
Netherlands	ING
Nigeria	Standard Chartered
Norway	Nordea
Peru	Citi
Philippines	Security Bank
Poland	mBank
Portugal	Banco BPI
Puerto Rico	Citi
Qatar	Qatar National Bank
Russia	Sberbank
Saudi Arabia	SABB
Singapore	DBS
South Africa	Standard Bank
South Korea	Shinhan Bank
Spain	BBVA
Sweden	Swedbank
Switzerland	UBS
Taiwan	E.SUN Bank
Turkey	Garanti
UAE	ADCB
United Kingdom	Lloyds Commerical Bank
United States	Citi

U.S Regional Middle Market Providers
Northeast	Citizen Bank
Mid-Atlantic	Citizen Bank
Midwest	Citizen Bank
West	Union Bank
Southwest	Capital One
Southeast	SunTrust

Click for winners in …

Methodology

Global Finance editors select the winners for the Best Treasury & Cash Management Awards with input from industry analysts, corporate executives and technology experts. The editors also use entries submitted by financial services providers, as well as independent research, to evaluate a series of objective and subjective factors. It is not necessary to enter in order to win, but experience shows that the additional information supplied in an entry can increase the chance of success. In many cases, entrants are able to present details and insights that may not be readily available to the editors of Global Finance. This year’s ratings are based on the period from the January 1, 2017 to December 31, 2017. [Companies with different fiscal year reporting have the option to submit data from the fourth quarter of 2016 through the third quarter of 2017.] Global Finance uses a proprietary algorithm with criteria—such as knowledge of local conditions and corporate customer needs, quality of product and service offerings, financial strength and safety, market standing, compliance and excellent customer service—weighted for relative importance. The algorithm incorporates various ratings into a single numerical score, with 100 equivalent to perfection. In cases where more than one institution earns the same score, we favor local providers over global institutions, and privately owned banks over government-owned ones.

The winners are those financial services providers that best meet the specialized needs of corporations engaged in global business. These top-notch finance institutions are not always the biggest, but rather the best—those with qualities that companies should look for when choosing a provider.