Technology & Treasury Management: Liquidity Management


By Rebecca Brace

Liquidity management is the latest corporate treasury process to get the one-stop-shop treatment by big banks and solution vendors.

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A few years have passed since the financial crisis propelled liquidity management to the top of the corporate treasurer’s priority list. What is surprising is that it has topped the agenda for so long, thanks to the ongoing crises being experienced worldwide since 2007.

As its importance continues to grow, corporates want better, and easier, tools to manage liquidity. And their banks are starting to respond: with new liquidity management tools and one-stop-shop portals where CFOs and corporate treasurers can get not only a single view on global liquidity but also a forward view on liquidity needs and tools to manage it.

As Michiel Ranke, Head of GTS i-LIM Investments at RBS observes: “Liquidity management is a big concern for corporate clients today—much more than we would have expected a couple of years ago. Then we expected that interest rates would rise by now, but that has not happened. The financial crisis has proved to be deeper and longer than we anticipated.”

The eurozone debt crisis has only increased the importance of liquidity for treasurers worldwide. Lisa Rossi, Deutsche Bank’s managing director and global head of liquidity management, Global Transaction Banking (GTB), notes: “We have seen a greater analysis of counterparty relationships as a result of the eurozone crisis. Corporates are not relying just on the ratings agencies alone and are often looking to do their own due diligence. Pre-2008 there might have been some complacency in accepting counterparty risk, but we don’t believe that is the case anymore.”


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Bramwell, SunGard AvantGard: A bank’s one-stop-shop portal is usually limited to that particular bank

The focus on liquidity management is here to stay. And its importance has been reflected in a recent flurry of activity by global banks looking to build out their liquidity management technology. This has given rise to the concept of the “liquidity management portal.” Although some industry participants use the term to describe technology focused on one aspect of liquidity management, such as a money market fund portal, it is increasingly being used to refer to a system that brings together several different areas of liquidity management under a single sign-in.

The technology lets corporates view balances held with multiple banks and manage cash concentration structures, short-term investments and reporting online.“A liquidity management portal provides an integrated platform of liquidity information, planning and analysis,” says Rossi.

It lets companies do simple cash flow forecasting, planning and analysis, and lets them interface directly with trade execution applications—improving management of excess liquidity or credit positions.


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Glendinning, Lenovo: A liquidity management portal would be nice to have, but is not a necessity

Deutsche Bank is now piloting its liquidity management application, Liquidity Manager, and it is not the only bank building up its online liquidity offering. Suzanne Barry, EMEA head of liquidity and investment at Bank of America Merrill Lynch, says that CashPro, the bank’s offering, is a multibank-enabled portal which “allows clients to connect virtually to the global treasury, debt, liquidity, investment, trade and foreign exchange solutions they need through a single sign-on user identity.” The bank is now developing an EMEA investment tool that will let companies place time deposits and money market funds through the CashPro portal.

Another established offering is Citi’s electronic banking platform, CitiDirect. It provides balance and transaction reporting and includes direct access to a number of modules—such as TreasuryVision, for analytical and reporting tools; and Citibank Online Investments, the bank’s investment portal. “Many of our clients tell us that cash flow forecasting is one of the biggest pain points in cash management, so within TreasuryVision we are incorporating a new cash flow forecasting capability which is designed to ease some of that pain,” says Hugo Parry-Wingfield, EMEA head of liquidity and investments at Citi Transaction Services.

“A liquidity management portal provides an integrated platform of liquidity information, planning and analysis”

– Lisa Rossi, Deutsche Bank

RBS launched a liquidity solutions portal in October last year, and J.P. Morgan’s liquidity portal, J.P. Morgan ACCESS Liquidity Solutions, was rolled out a year earlier. The portal concept is not limited to the world’s largest banks: Swedish bank SEB is looking to combine forecasting and trade in its existing cash management and custody portal. “We have separate offerings today, but in the future we will provide a full-service offering in a single interface,” says Per-Erik Wellstedt, SEB’s global head of GTS Internet Banking.

Although banks have been investing heavily in this area, they are not the only providers of liquidity management technology in the market, as Paul Bramwell, senior vice president, treasury solutions, at SunGard AvantGard, points out: “Banks all claim to offer a single one-stop-shop portal, but that’s usually within that particular bank. As a treasury solution vendor, we are completely bank-agnostic—which enables companies to divorce themselves from the technology that banks provide.”

Although the liquidity management portals offered by banks do sometimes provide access to account information from third-party banks, Bramwell says that this facility tends to be expensive—and also makes the corporate client even more reliant on a particular bank relationship. “Technology is a way to make relationships sticky. We’re seeing corporations really wanting to move away from these types of solutions and use available third-party networks and connectivity where possible.”

Despite all the activity in this area, for many corporate treasurers the concept of the liquidity management portal is not yet on their radar. “It is a great idea—I just haven’t seen much reality yet,” says Damian Glendinning, treasurer of Chinese electronics company Lenovo. To Glendinning, an all-singing, all-dancing liquidity management portal would be a “nice to have,” rather than a real necessity—but he adds that any step forward is always welcome.

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