Features : Sponsored Roundtable: Treasury & Cash Management


Advances in technology are helping treasury and cash management specialists provide their organizations and clients with greater depth and breadth of services.


Gary Greenwald heads global capabilities and information products for global transaction services cash management at Citi. He is responsible for managing Citi’s core payments, cash management and Internet banking platforms, as well as developing new innovative solutions such as TreasuryVision and Digital Identity Management.

GLOBAL FINANCE: Supply chain finance may be an offering more appealing in theory than practice. What is being done to make supply chain finance more practical and efficient?

AL BRIAND, managing director, product management division head, The Bank of New York Mellon Treasury Services: It is a hot topic. Across trade or payments, or in global cash management, there’s a drive toward something more efficient and effective: end-to-end supply chain finance. But the reality, from a banking perspective, is that corporates are still using the processes that exist right now. So we’ve tried to be selective in terms of how we can add value without replicating or replacing the entire mechanism. It’s just too big, and there are too many embedded systems and procedures that need to be addressed. We think there’s room for more efficiency, but we’ve been picking and choosing our spots.

GARY E. GREENWALD, managing director, global head of capabilities and information products, Citi: We’re not exactly starting from scratch. There are working capital loans and traditional trade finance that have been around for a very long time, so the real question is, How fast are we moving toward newer models of supply chain finance? I’m very excited by the liquidity injected in the system through structures where we can take the buyer’s credit rating and apply that back to the supplier and quote some paper around it. There’s an information play that’s starting to kick in, as the information flow about where physical goods are—in transit, in inventory, on the boat, for example—allows more flexibility in various financing options. The other one I’m excited about is distribution finance, which is developing as some of our large corporate clients get into new markets and need to finance the distributors.

BENT BENJAMINSEN, senior vice president, strategic initiatives, SunGard AvantGard: From a systems standpoint, we see trade finance developing very rapidly in three areas. One is dynamic discounting, although that seems to be less aggressive. As we can make more information available in real time, in a more structured way, that will accelerate it. There’s still huge growth in receivables financing, and I think, as our customers start to more closely link their treasury view to open trade receivables, they will want to then take the next step and literally pick and choose which ones they want to finance. And then we see, particularly in Asia, a drive toward open accounts and how that is being integrated into the corpus. Once information on where the goods are becomes available, that will drive that as well.

GF: Within your own organizations, is supply chain finance a trade operation or a cash management operation?

BRIAND: It’s managed as a trade application, but increasingly there’s crossover. For example, we have an accounts payable subsidiary called SourceNet that we use to craft some solutions, end-to-end. Administratively, it’s a trade operation, but it is crossing into the cash management and payments arenas as well.

GREENWALD: Corporates are looking for the sweet spot of optimization between days sales outstanding and payables outstanding, so you can no longer think of these things strictly as trade versus cash. We need to be holistic and integrated, because that’s how our clients think.

BENJAMINSEN: Receivables and payables are quite often done at a business unit level, so information can be very fragmented or regional in terms of what programs are in place and what can be done. As people migrate to more centralized systems, hopefully that will, in itself, facilitate more of that.

GF: What are the latest SEPA developments treasurers should know about?

GREENWALD: The banks in Europe are moving aggressively and are in many ways moving faster than many corporates are ready for. There’s a January rollout date for the first set of SEPA functionality. The banks are there. As an industry, we have tried to get the plumbing in place, and now it’s a matter of talking to, working with and educating corporates on where the benefits are, what the tradeoffs are.


Al Briand is a managing director at The Bank of New York Mellon and heads the product management division for the bank’s treasury services division. In this capacity he manages product development initiatives, market positioning and product planning for the trade finance, international payments and working capital solutions product lines.

BRIAND: Corporates making recurring low-value payments into the eurozone need to talk with their bank providers to make sure those providers are aware of the changes in standards, utilization of IBANs, etc., and all of the particulars associated with making low-value payments in the SEPA world. But it’s evolutionary: Change will be gradual as the payment system evolves.

BENJAMINSEN: We certainly see an increase in corporates requesting information on SEPA. A lot of corporations are taking the opportunity to look at their payment processing, and they are viewing this as an opportunity to look at their old processes and to see how they can improve them. SEPA is encouraging them to think more broadly about their processes.

GREENWALD: Right. A lot of the topics we’re talking about tie back to a more profound reengineering of companies’ payment, treasury and cash management processes, where bringing on SEPA or bringing on SWIFT or bringing on a different supply chain paradigm is a means toward a broader end.

GF: What sort of interest are you seeing in the use of mobile technology in treasury and cash management?

GREENWALD: We’re seeing lots of interest in, and early-use cases of, mobile technology, but it’s more in the consumer and SME space than in the large corporate space. We did a deal with Vodafone on person-to-person payments that are carried over cell technology. We’re doing some interesting work in Asia on alerting of transactions to a mobile device. However, there is a danger that this is a technology solution in search of a business problem. We have to ask what problem we are trying to solve for a corporate client where mobile technology is accretive to that end state.

BENJAMINSEN: Where mobile technology can be really interesting is exporting the corporate workflow—such as payment approvals or authorizations. You don’t want to run the treasury workstation on a mobile phone, but you want to be notified when certain problems arise or where your input is required to enhance the workflow.

BRIAND: Mobile technology can play a component role in solutions. We’ve been pushing some information out that can be accessed via mobile technology. We also see it as a part of contingency or disaster recovery solutions—when you can’t be on site and you need access to information to keep things moving.

GF: What progress is SWIFT making signing up corporates for direct connectivity? Should direct communications with SWIFT be considered part of a corporate suite of best practices?

BRIAND: This will be a big play in the coming years, but right now the underlying advantage is standardization, and the real targets—and the appropriate audience—are multinational corporates dealing with multiple global banks. You don’t need to be a member of SWIFT to take advantage of message and connectivity standardization. Corporates should discuss with their providers opportunities to use SWIFT formats rather than proprietary mechanisms. In addition, there’s an organization called TWIST in Europe that has been working with some of the largest corporates and larger financial institutions to standardize a variety of administrative functions—things that take a lot of time to perform manually. Corporates can evaluate whether to join SWIFT and connect directly, but the real issue is how to take advantage of the standardization embedded within SWIFT.


Bent Benjaminsenis the senior vice president, strategic initiatives, for SunGards AvantGard. He offers more than 12 years of experience in global treasury management software and has managed more than 20 global treasury implementation and service projects in Europe and the US.

BENJAMINSEN: SWIFT needs to clearly articulate what role it wants to serve. To use SWIFT from a payment standpoint, from a corporate standpoint, there has to be universal support. For payments, it has to be more comprehensive, it has to be high-value and low-value payments, it has to support things like remittance. When we look at some of the ways corporates interchange data now in the collections space, there are lot of disputes. For example, people are sending images and saying, “I did not pay this invoice because the goods were damaged, so I took a picture, and yes, the pictures will prove it.” Suddenly the information transmitted with a remittance is changing; it’s becoming more rich and taking different forms. The question is, Will all that have to flow through that same channel, and if so, will the channel be able to cope?

GREENWALD: There’s a lot of buzz in the corporate community about the value SWIFT can bring. That was evidenced by the large number of corporates at SWIFT’s Sibos conference this year. There were almost 100, versus a handful in prior years. A number of companies have joined, a number are exploring. SWIFT clearly brings a lot to the party, it’s a great fit for certain clients, but it’s not the only solution. For every client we have connecting to us via SWIFT, I have others that, for example, want to send files over the Internet or mix with traditional web-banking tools. There’s no one-size-fits-all. Optimizing cash management means understanding how those pieces fit together and getting an optimal balance for a particular company.

BRIAND: Standardization underscores some of the true value of SWIFT, but the drive to automation is at the core. Automation can be facilitated through standardization, and standardization can be facilitated through SWIFT or by other means.

BENJAMINSEN: One of the interesting parts of SWIFT is its involvement in trade services utility: SWIFT is looking at actually exchanging much more information before it becomes a payment. Once there is a merger between SWIFT as payment and SWIFT as direct service utility, we’ll see some really good opportunities developing. A lot of large corporations like to be “bank-agnostic.” They don’t want to maintain two or three different payment gateways to every bank. For them, SWIFT has very clear appeal in terms of maintaining a universal payment channel. But they still have to cut the checks, they still have to deliver low-end payments, they still have to deal with a lot of domestic stuff around the world. SWIFT is just one of many channels, but one that can certainly replace quite a few of what they have.

BRIAND: Banks have come to understand that there are many reasons for clients to choose a bank, aside from proprietary formats and unique products. It’s about the whole relationship—the service levels, the package we provide, the consultative advice. Ten years ago, when there was a vote of the SWIFT membership on whether corporates should have more access to SWIFT, the result was an overwhelming “no.” In 2006, when it was voted on again, there was an overwhelming vote “yes.” Banks realize that the best access we can provide will only enhance that relationship.

GREENWALD: There’s an interesting, almost contradictory, force at work. On the technology and the connectivity side, there is a move toward bank-agnostic tools, toward having more transactions initiated from a treasury or an ERP system. At the same time, corporates are continuing to consolidate their banking relationships. With open standards being applied to fewer partner banks, a large corporate can have much more of a value-added discussion, because they have concentrated their wallet and their spend with fewer players, and hence it’s a richer relationship, a richer dialogue.

GF: Should SWIFT make the SCORE model for corporate connectivity more accessible to a wider range of corporates than those it is currently on offer to?

GREENWALD: Private companies are not eligible for SCORE; it’s restricted to publicly traded, investment-grade-type companies. We, as a community, have to consider why it isn’t available to a broader set of the global cash management market.

BENJAMINSEN: If you don’t open up, you’ll just see more of these SWIFT service bureaux appear. Somebody will find a way to provide those corporations with that service they request. You can’t exclude some of the world’s largest corporates from these kinds of services.

BRIAND: There’s usually an evolution to these things, too. Corporates had limited and restricted access to SWIFT; now they have access, direct and unrestricted, and over the years SWIFT has expanded membership and participation to more financial service companies. The evolution with corporate participation should be similar.

GREENWALD: Many of the messaging standards on which SWIFT operates are public domain standards. If it’s too hard for large private corporates to join, other network providers will emerge and use exactly the same standards.

GF: Some corporates have already connected to SWIFT, or are ready to move to the new ISO 20022 XML standards. Are the banks and SWIFT ready yet to support them on that?

GREENWALD: As with any new standard, the development of the standard just marks the end of the beginning. Then it becomes a process of the corporates and banks adjusting and building to these new standards. That takes some time. ISO 20022 is starting to take hold because things like SEPA are forcing adoption. And then you have a number of the large corporates who are doing large shared service center centralization projects and adopting that standard telling their banks, “If you want to be part of our bid for global cash management services, we expect to receive information from you in the ISO format.” A number of banks have been aggressively investing to handle that format, in addition to the many other non-XML formats that are in use today. I would say we are already in parallel with the corporate adoption, and the faster that goes, the faster we’ll see the industry adopt.

BRIAND: These global payment systems have been in place for a number of years, and now we’re moving trillions of dollars a day. So it is necessary to ensure that when new standards or new technologies are adopted, they are unconditionally ready for prime time. We are bringing in these standards now for newer applications, and we are comfortable with the current pace.

GF: Are we still seeing a trend among corporates to establish shared service centers? Do shared service centers deliver on their promises of cost savings and efficiencies?

BENJAMINSEN: There’s a drive toward being more efficient, and standardization is a step toward it, SEPA, SWIFT, TWIST, they are all steps toward it. The question now is whether you still have to centralize the treasury function to gain those efficiency benefits. In the past you probably would take all these activities and put them in one cost-effective place, but I think as information becomes more readily available and we see more standardization, connectivity and so forth, we may no longer need to consolidate everything physically in order to get those benefits. For areas such as management of trade receivables and payments processing, I do believe that there is a benefit to centralizing and standardizing: Even if the outcome is regionally based centers of excellence, the common theme here is to gain a centralized view of cash and risk. Operating entirely in localized organizations simply does not make sense for many corporations; there is far more to gain by consolidating views, processes, best practices and more. You now see a lot of movement to the electronic invoice presentment space. Maybe that, in itself, would help create the efficiencies without having to create a centralized location. You may be able to get the efficiencies in a step-by-step manner.

GREENWALD: We are continuing to see corporates establish shared service centers for a number of reasons. Often it’s tied to moving work to low-cost locations. The companies that have done that can demonstrate measurable, empirical savings on their unit cost of managing a payment or a collection. In parallel to a physical co-location of more or less existing processes, there is a parallel set of innovation happening—perhaps we’ve just scratched the surface—that re-imagines how things can work. Perhaps it makes them more virtual, perhaps more digital and paperless. That opens up avenues for more virtual shared service centers that perhaps get the right balance between centralization and low-cost locations, and using technology to reengineer the processes. That can only be a win-win for everyone.

BRIAND: Efficiency continues to power the drive to reduce costs and toward shared service centers, which we continue to see evolve. There is also a move toward outsourcing and the use of new technologies. Shared service centers, doing things more effectively within the corporate walls, outsourcing, new technologies—all are seen as ways to drive down costs and perform more effective treasury management.

GF: Treasury managers are in a difficult credit market. How is this affecting their approach to liquidity management?

GREENWALD: On the funding side—where the liquidity in the system, even for A1, B1 commercial paper, had been less good in the third quarter and the pricing was quite high—we have now returned to some level of normalcy, at least for the higher-grade paper. For A2, B2, pricing is a little more expensive. But I think the hiccup is mostly over. The flip side of it is on the excess cash and placement. We and others saw a flight into instruments other than commercial paper—bank time deposits, money market funds, government securities—so we’ve seen the mix change, but that’s also starting to bounce back, at least, again, for investing in the traditional commercial paper. We’ve seen a normalization of the corporate commercial paper market.

BRIAND: Right. For cash coming from the working capital or liquidity management side, we see movement toward stability and diversification. They are overtaking the need to get that extra yield or basis point. There’s a more conservative approach, given the economic conditions out there.

BENJAMINSEN: The credit crunch is one of those events you might look back on and say, This is when people really sat down and evaluated what other alternatives might actually exist. If companies have a hard time raising money, they may be more receptive to dynamic discounting, just because it’s maybe a cheaper way of getting financing. I think it was a key moment, when an event forced positive changes to happen.

Joseph Giarraputo