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The 2012 guide toM

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Published in conjunction with:Bank of America Merrill LynchBarclaysBNP ParibasCitiCommerzbankRBSSantanderUniCredit

Technology inTreasury Management

International cash management review 2012 2-13By Jack and Wolfi Large

Strength comes from combining capabilities 9Santander

Single account solutions: 14simplification and standardisationRBS

Payment systems review 16-21By Jack and Wolfi Large

External Treasury: 18Navigating a course through Europe’s rough seas Bank of America Merrill Lynch

UniCredit case study: Nordex: 22Unicredit

Technology review 24-29By Jack and Wolfi Large For the innovative, digitization 26is the present and the futureCiti

Cash Management at the heart of BNP Paribas 30BNP Paribas

Financial supply chain review 32-37By Jack and Wolfi Large

Payments in the pocket 34Barclays

This guide is for the use of professionals only. It states the position of the market as at the time of going to press and is not a substitute for detailed local knowledge.

Euromoney Institutional Investor PLCNestor HousePlayhouse YardLondon EC4V 5EXTelephone: +44 20 7779 8888Facsimile: +44 20 7779 8739 / 8345

Chairman and editor-in-chief: Padraic FallonDirectors: Sir Patrick Sergeant, The Viscount Rothermere, Richard Ensor (managing director), Neil Osborn, Dan Cohen, John Botts, Colin Jones, Diane Alfano, Christopher Fordham, Jaime Gonzalez, Jane Wilkinson, Martin Morgan, David Pritchard, Bashar Al-Rehany

Editor: Sarah MinnsCover illustration: Sarah Minns / Ray HeathPrinted in the United Kingdom by: Wyndeham Group

© Euromoney Institutional Investor PLC London 2012Euromoney is registered as a trademark in the United States and the United Kingdom.

Contents

International cash management review 2012In 2011, despite the financial and lack-of-liquidity crisis around the world, banks of all sizes have continued to invest in their cash management services, the one sure source of recurring revenues. Companies have also focused on their cash management, insisting on the full visibility of cash, protection from counterparty risk and the effective use of liquidity. Cash management is vitally important to both banks and companies. By Jack and Wolfi Large

Many of the global, regional and large domestic banks have signifi-cantly increased both investment in and recruitment to their cash management services. Cash management is a profitable business and can lead to other business opportunities with corporate customers. Paul Camp, the new head of global cash management at JP Morgan, says, “We’re on an evolutionary journey extending our capabilities and presence globally. We’re committed to delivering a franchise that has both in-country expertise and global capabilities, bound by a consist-ent client experience. ”

Diane Reyes, the new global head of payments and cash management at HSBC, comments, “We’re a growth engine for HSBC. Using technol-ogy to enhance customers’ experience, we have a strong proposition across key Asia Pacific and Middle Eastern markets and have launched HSBCnet Mobile to 62,700 clients in 64 countries.”

Richard Dallas, Lloyds Banking Group’s managing director of transac-tion banking, explains, “Our commitment to delivering first-class cash management services is demonstrated by our investment plans to add both financial capital and intellectual capital to the business, making heavy investments in products, systems and people.”

Major commitment and investment do not necessarily produce effec-tive cash management solutions. The 2012 survey again shows that cash management is, above all, a delivery business.

The surveyNo single bank has branches covering the whole of North America, let alone the entire world. All the cash management banks use a combination of their own bank branches and partner banks to provide comprehensive international cash management solutions. As always in the survey the definition of a full service branch (own branch) is a branch fully owned by a bank providing lending, deposit-taking and payment services and fully electronically integrated into the bank’s global network. This year the types of partner banks covered have been expanded to two, with the following definitions:

l Service level agreement based partner banking, which involves local banks providing cash management and payment services to agreed service level standards for a lead cash management bank covering particulars such as the treatment of SWIFT messages, account opening

and cut-off times, and which requires the lead bank’s corporate clients to open accounts with the local banks

l Electronically integrated partner banking, which involves the back office integration of the lead bank and the local banks’ back office processes to offer rather more seamless services.

The 2012 international cash management survey covers the services provided by the global network banks, leading cash management banks worldwide and the banking clubs. The survey covers Asia-Pacific, Europe, Latin America, the Middle East and Africa, and North America. The banks have provided the numbers used in the survey, which have been checked for consistency and accuracy as far as is possible.

Some 60 banks completed questionnaires on their cash management systems and services, and the network coverage of their full service branches and their partner banks. The data from their responses is given in the tables. The tabular results are described in the following sections, including a review of the global network banks and a descrip-tion of all the participating banks’ cash management services in all five regions. In the introduction to each region there is a brief description of some of the main developments over the past 12 months.

Partner banking coverageThe 2012 survey shows that the levels of partner banking in the respondent banks ICM solutions vary considerably between regions, as shown in Table 1.

Table 1 - Regional usage of partner banks

Region Partner banking arrangements

e- integrated SLA based

Europe 38 294

Asia Pacific 25 68

Latin America 7 55

North America 6 5

Middle East & Africa 0 41

Total 76 463

Source: Cash management banks. Copyright© 2012 J&W Associates

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Globally there are a total of 76 e-integrated partner banking arrange-ments, compared to 463 SLA partner bank arrangements. Europe has the highest number of e-integrated partner bank arrangements, the next highest is in Asia-Pacific. There are far fewer e-integrated partner bank arrangements in Latin America and North America, and none at all in the Middle East and Africa.

There can be great variations in the quality and consistency of partner banking arrangements, so some banks have joined together into banking clubs to provide more consistent and integrated services and products using very detailed and highly demanding service level agree-ments. The three clubs provide extensive coverage, as shown in Table 2. The TES Banking Club continues to have the largest country coverage in 69 countries and the most member banks at 72. Only the Connec-tor and TES clubs provide coverage in all five regions. Over the past 12 months the banking clubs have all consolidated and rationalized their networks. Connector has added one new member bank, Akbank in Turkey with 912 branches. IBOS has added PNC Bank in the US and Banco Santander in Mexico.

Global network banksA global network bank must offer a full range of cash and liquidity management systems and services in all five regions of the world, provided either by its own branch network or fully integrated partner banks. The arrangements must be sufficient to satisfy its corporate cli-ents’ cash management requirements around the world and, crucially, must have resident cash management experts available locally to provide service support.

Over the past 10 years BNP Paribas has put in place the infrastructure, processes, products and people to be regarded as a global network bank. The takeover of Fortis Bank brought key sweeping and pooling systems and products, which BNP Paribas has now fully integrated with its other cash management services to provide a truly global ICM solu-tion. Pierre Fersztand, global head of cash management at BNP Paribas, underlines, “We continue to invest significantly to meet our clients’ ex-pectations and are strongly committed to support our corporate clients on a long-term basis across Europe and beyond. Our wide geographical cover and strong expertise enable us to offer global solutions while also providing support tailored to local needs.”

The 2012 survey of global network banks this year covers eight banks: Bank of America Merrill Lynch, BNP Paribas, Citi, Deutsche Bank, HSBC, JP Morgan, RBS and Standard Chartered Bank. The survey results are given in Table 3.

The global network banks’ use of partner banking varies considerably, as shown in Figure 1. Over 60% of Bank of America Merrill Lynch’s international cash management network is provided by partner banks, compared to less than 30% of Deutsche Bank’s and HSBC’s. The clear leaders in the use of e-integrated partner banking arrangements are JP Morgan in 26 countries and Bank of America Merrill Lynch in 22.

Most of the global network banks have increased their transaction banking revenues significantly and are investing heavily in cash man-agement and trade services. There have been some improvements to network coverage. All the banks have reported increases in their part-ner banking arrangements and Deutsche Bank increased the number of countries with their own bank branches by five. The biggest increase in country coverage was by Standard Chartered Bank, which increased the number of countries in which it has partner banks by 32, mainly due to a new arrangement in Latin America with Scotia bank. RBS continued to fine-tune its network, adding two countries with new own bank branches and three with partner banking arrangements.

The survey results given in Table 3 show:l all the global network banks have their own bank branches in all five regions except Bank of America Merrill Lynch

l Citi has by far the largest own branch network with branches in 88 countries, way ahead of its closest rival HSBC with branches in 66

l Standard Chartered now has the largest combined network of own branches and partner banking arrangements, both covering 124 countries, while Citi has 111, and third is HSBC covering 91

Table 2: Banking Clubs, January 2012

Banking club Connector IBOS Association Limited TES Banking ClubCoverage No. of bank

membersNo. of countries Total member

bank branchesNo. of bank members

No. of countries Total member bank branches

No. of bank members

No. of countries Total member bank branches

World-wide 32 45 38,004 38 33 42,755 72 69 25,158North America* 1 1 6,400 4 1 11,034 4 1 2,984Eurozone 10 10 9,902 13 12 20,351 13 12 9,252Rest of Western Europe

2 2 1,900 4 4 2,935 10 9 2,860

Central and Eastern Europe

13 13 2,675 9 9 1,447 22 14 5,887

Middle East/Africa 3 7 1,014 10 10 599Asia Pacific 2 10 1,414 3 13 77Latin America 1 2 14,699 8 7 6,988 10 10 3,499

Source: Banking Clubs. Copyright© 2012 J&W Associates * USA and Canada

Figure 1 - Global network banks use of partner banks

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20

40

60

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100

0

20

40

60

80

100

SLA partner banke-Integrated partner bankOwn

Standard Charte

redRBS

J.P.M

organ

HSBC

Deutsche Bank

Citi

BNP Paribas

BofA M

errill

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Percentage

Source: Cash management banks. Copyright© 2012 J&W Associates

l Standard Chartered now has by far the greatest access to all the paper clearings, same day clearing systems and ACHs, Citi and HSBC trail some way behind

l the other five banks all have far less coverage of paper clearings, same day clearing systems and ACHs

l the number of countries in which the banks issue payment cards has fallen significantly, Citi’s from 65 to 51; the second largest issuer is now Bank of America Merrill Lynch

l payment card transaction acquiring has seen a major decline in coverage in most of the banks; the new leader by a long way is Bank of America Merrill Lynch covering 45 countries.

ICM services in EuropeIn 2011 the increasing uncertainty of future banking structures and payment systems changed the cash management focus of companies in Europe. They are now focusing on the use of new technologies to improve the efficiency of their cash and liquidity management and protect their corporate treasury department operations. Danske

Table 3: Global Network Banks January 2012

Bank Bank of America

Merrill Lynch

BNP Paribas Citi Deutsche Bank HSBC J.P. Morgan RBS Standard Chartered

Bank Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner

E SL E SL E SL E SL E SL E SL E SL E SL

INFRASTRUCTURENo. of Countries with Fully Integrated Full Service branches:World-wide 26 11 30 55 6 21 88 1 22 41 2 13 66 3 22 30 26 5 38 8 21 48 5 71Asia Pacific 12 11 11 5 4 18 13 14 2 20 14 11 10 2 2 20 5 9eurozone 8 5 11 4 13 9 5 11 3 7 6 4 11 6 1Rest of Western Europe 2 3 5 4 6 5 3 6 3 3 2 3 4 1 4Central & Eastern Europe 3 1 9 9 8 7 5 5 12 1 5 7 8Latin America 2 17 1 23 1 2 12 2 2 6 3 1 33Middle East & North Africa 1 11 8 2 3 10 3 1 2 1 6 4Rest of Africa 6 11 5 1 1 15 24North America 2 1 1 1 1 1 1 2 1 2 1 2 1 1PAYMENT CLEARING SYSTEMS & SERVICESNo. Countries with Direct Access to Local Paper Based Clearings:World-Wide 23 13 21 53 2 17 66 2 14 33 2 14 58 1 23 20 18 4 15 8 13 41 5 68Asia Pacific 12 1 9 1 16 1 1 13 2 19 12 8 8 2 2 17 5 6eurozone 8 5 11 4 4 4 9 5 7 3 4 1 4 2 6 1Rest of Western Europe 5 5 4 1 2 5 3 5 1 3 1 3 1 1 1Central & Eastern Europe 3 1 9 9 2 5 3 12 5Latin America 2 17 1 23 1 2 12 2 1 1 6 3 1 33Middle East & North Africa 1 11 8 1 3 10 3 2 1 6 3Rest of Africa 6 11 5 1 14 24North America 1 1 1 1 1 1 1 1 2 1 1 1 1 2No. Countries with Fully Automated Direct Access to Same Day Clearing Systems:World-Wide 17 7 20 46 13 58 1 7 32 2 9 52 3 18 21 19 25 8 14 41 5 66Asia Pacific 12 1 12 16 14 2 17 13 10 10 2 2 17 5 5eurozone: TARGET 2 member yes yes yes yes yes yes yes no no yes no yes yes no yes yes yes no yes yes yes yes no noRest of Western Europe 1 4 5 4 6 5 3 6 3 3 2 3 4 1 1Central & Eastern Europe 3 1 9 9 8 7 5 5 12 1 5 7 7Latin America 2 17 1 8 1 2 12 2 1 6 3 1 33Middle East & North Africa 1 11 8 1 3 10 3 1 2 1 5 3Rest of Africa 6 11 5 1 15 24North America 2 2 1 1 1 1 2 1 1 1 2 1No. Countries with Fully Automated Direct Access to ACH/Giro Electronic Clearings:World-Wide 24 12 21 54 1 17 75 6 7 39 2 14 61 3 22 26 21 2 32 6 9 31 5 63Asia Pacific 12 1 9 1 15 1 12 2 17 1 12 10 9 2 14 5 4eurozone 8 5 11 4 9 4 9 5 10 3 7 2 2 11 2 1Rest of Western Europe 1 4 5 4 6 5 3 6 3 3 2 3 4 1Central & Eastern Europe 3 1 9 9 8 7 5 5 12 5 4 1Latin America 2 17 1 17 1 2 11 2 1 6 3 33Middle East & North Africa 1 11 8 1 3 10 3 1 2 1 2 3Rest of Africa 6 11 5 1 12 22North America 1 1 2 1 1 1 1 2 1 1 1 1 1No. Countries where Issue Payment Cards LocallyWorld-Wide 2 4 26 21 1 45 6 5 28 39 3 18 12 3 2 24 11Asia Pacific 13 1 12 2 19 12 12Europe 3 1 13 5 25 16 3 1Latin America 4 13 11 10Middle East & Africa 16 7 6 1 8 3 12 11North America 2 1 2 2 2 1No. Countries where offer Payment Card Transaction AcquiringWorld-Wide 2 30 12 24 5 2 9 12 2 1 4Asia Pacific 13 11 2 2 11 4EuropeLatin America 17 11 1 9Middle East & Africa 11 2 2North America 2 1 1 2 1

Source: Cash management banks. Copyright© 2012 J&W Associates key: E=e-integrated, SL= SLA based

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Bank’s global head of cash management sales, Claus Sørup Rasmus-sen, claims, “We have found that there has been an increased empha-sis on: 1) adopting standard formats and bank agnostic connectivity, 2) simplifying pan-European cash management with products such as our overlay structure, and 3) the insistence on bank-flexibility in all solutions.”

The 2012 survey of the ICM services available in Europe covers 20 banks: Bank of America Merrill Lynch, Barclays Bank, BBVA, BNP Paribas, Citi, Commerzbank, Danske, Deutsche Bank, HSBC, ING Bank, JP Morgan, KBC Bank, Nordea, Raffeisen Bank International, RBS, San-tander, SEB, Société Générale, Standard Chartered Bank and Unicredit.

The survey results given in Table 4 show:l a variety of ICM strategies, from offering the best and most flexible solutions to providing a consistent, world-class client experience

l only seven of the banks have their own branches in 10 or more countries in the eurozone; all the rest, except Standard Chartered Bank, have combined own bank branch and partner bank coverage in at least nine

l coverage of the rest of Western Europe varies considerably

l Unicredit has by far the highest coverage of Central and Eastern Europe with its own bank branches in 19 countries; its closest rivals are Société Générale in 13 and Raffeisen Bank International in 12

l all of the banks are direct members of the SEPA credit transfer scheme and the SEPA direct debit scheme

l mass disbursement and mass collection services are generally avail-able across the region

l almost all of the banks issue debit and credit cards, and several also issue prepaid cards

l payment card acquiring services are now available from only15 of the banks, three less than in 2011

l multilateral netting services are available from eight of the banks, covering many countries and currencies

l pan-European notional pooling services are available from all of the banks; the main difference is in the number of countries from which pools can be operated

l sweeping facilities are available from all of the banks, Commerz-bank with the highest coverage of 33 countries, and most provide several locations for the master pool

l on-line investment portals are available from all but three of the banks, mostly offering only their own investment products

l only nine of the banks provide automated sweeps into money market funds; the number of funds available has increased again, with Citi offering 148 and Santander 99

l ICM services are available in other regions from all of the banks using various combinations of their own branches, partner banks, banking clubs and correspondent banks

l local resident cash management specialists are available from all of the banks, Citi in 36 countries and Société Génerale in 33

l customer service support is available during normal office hours with only Deutsche Bank providing 24/7 and JP Morgan providing 24-hour support Monday to Friday.

ICM services in North America There have been three main developments in North America over the past year. The first, the migration away from paper-based payments, has slowed with some sectors seeing a slight increase in the use of cheques, as companies and consumers continue to struggle in the economic downturn. The adoption of electronic invoice presentment and payment (EIPP) services, such as those offered by the Syncada network, have begun to take hold with significant increases in the number of suppliers, buyers and payments, particularly in the mid-size company market.

The second development is that middle-market US companies have continued their focus on international trade and increased the demand for cross-border payment and trade services. The demand for letter of credit services has also increased as companies have become more concerned about counterparty and sovereign risk. To meet this increased demand for more international payment and cash manage-ment services the US banks have continued to expand their services. A recent example is Wells Fargo extending its suite of cash management services to cover companies based in Europe. As Judd Holroyde, SVP at Wells Fargo, explains, “Our European clients – whether working in Eu-rope or in the US – now all have the same depth of control and visibility in all aspects of cash management.”

The third and possibly most important development is the growing acceptance and use of mobile services and payments. Jeff Jones, execu-tive vice president of US Bank Global Treasury Management, finds, “The interest from our middle-market corporate customers in EIPP and mobile treasury management services is gaining momentum as our customers seek to save time, gain efficiencies, lower costs, automate processes, and improve visibility.”

The 2012 survey of international cash management services avail-able in North America covers 12 banks: Bank of America Merrill Lynch, BNP Paribas, Bank of New York Mellon, Citi, Deutsche Bank, HSBC, JP Morgan, PNC, Royal Bank of Scotland, Standard Chartered, US Bank and Wells Fargo.

The survey results for North America given in Table 5 show:l a variety of ICM strategies for the region, from offering a full suite of innovative solutions, to providing the reach of a global network with the strength of one partner

l the number of branches in the banks’ networks varies considerably, Wells Fargo with the largest at 9,000 and Bank of America Merrill Lynch at 5,700+

l most of the banks provide cheque processing and lockbox facilities

l mass payment and collection services are generally available, but there is only limited availability of multilateral netting and payment card services

l all of the banks provide sweeping services, but there is limited avail-ability of notional pooling services as this is generally not practised in North America

l all but two of the banks offer an on-line investment portal with auto-mated sweeps to money market funds, seven offering other financial institutions’ investment products as well as their own

l Deutsche Bank is the only bank offering 24/7 customer service sup-port in the region.

ICM services in Middle East and Africa The Middle East and Africa is one of the most difficult regions in which to do business and carry out cash and liquidity management, with more socio-economic challenges and a lack of basic banking facilities than in any of the other regions. Yet multinational corpora-tions are still centralizing their operations in shared service centres and introducing cash pooling wherever possible. Over the past 12 months African currencies have become increasingly vulnerable to the global financial turmoil, with most falling significantly against the US dollar, which has forced many corporations operating in the region to hedge their local currency exposures actively for the first time. The harsh economic conditions have also led several African governments, such as Nigeria, to encourage banks to replace notes and coins with other payment channels where possible to encour-age growth and reduce fraud, which has lead to increased usage of mobile banking and payments. Andrew Daley, head of corporate banking, EMEA, at Standard Bank explains, “Inclusive banking al-lows individuals with their national identity card and mobile phone to open a fully operational bank account within just 10 minutes. This technology is beginning to revolutionize cash collections.”

The 2012 survey of the ICM services available in the Middle East and Africa region covers 11 banks: Bank of America Merrill Lynch, Barclays Bank, BNP Paribas, Citi, Deutsche Bank, ecobank, HSBC, JP Morgan, Royal Bank of Scotland, Standard Bank and Standard Chartered Bank.

The survey results for the Middle East & Africa given in Table 6 show:l a variety of regional ICM strategies, from supporting customers in optimizing working capital, to providing working capital solutions to collect, invest and pay funds worldwide, to leveraging an unri-valled presence across Africa to provide innovative and integrated cash management solutions.

l Standard Chartered Bank has the largest own branch coverage in 21 countries and the largest combined network covering 49 countries

l ecobank has the biggest own bank coverage in rest of Africa with branches in 30 countries

l Barclays Bank has the largest branch network in three of the nine major countries, Egypt, Kenya and South Africa; ecobank has branch networks in many of the countries not listed

l Citi has the highest mass payment and collection services country coverage in 19 countries; Standard Chartered comes next

l multilateral netting services are available from three of the banks, Citi with the greatest country coverage

l notional pooling is available from all of the banks with great variations in where pools are located and the number of currencies covered

l sweeping services are available from all but Bank of America Merrill Lynch

l all of the banks provide ICM solutions in other regions

l offshore banking services in Seychelles or Mauritius are provided by five of the banks

l BNP Paribas, Citi and Standard Chartered have local resident cash management specialists in 18 or 19 countries

l customer service support is available in normal business hours only.

ICM services in Latin AmericaCash management in Latin America continues to prove difficult due the lack of advanced clearing systems and many restrictive regula-tions prohibiting cross-border cash pooling and other advanced cash management techniques. But, driven by the growth in the Brazilian economy and the foreign investment pouring into Latin America, cash management in the region is steadily improving. The increasing number of ACHs, reduced cheque usage, improved SWIFT connectivity and visibility of cash plus the freeing up of legislation are making cash management and the operation of shared service centres easier. All the cash management banks covering Latin America use a combination of their own branches and partner banks. Standard Chartered Bank now provides services in 33 countries through its new partnership with Scotia Bank.

The 2012 survey of the ICM services available in Latin America covers 11 banks: Banco Itaú, Bank of America Merrill Lynch, BBVA, BNP Paribas, Citi, Deutsche Bank, HSBC, JP Morgan, RBS, Santander and Standard Chartered Bank.

The survey results for Latin America given in Table 7 show:l a variety of ICM strategies, from being a full service provider bank for the region, to optimizing working capital and expanding within LatAm and to other regions

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l two of the banks have a single global processing system

l Citi has its own bank branches in 23 countries and only one partner bank, its nearest rival HSBC has its own branches in 12 countries

l only four of the banks have significant in-country branch coverage: BBVA with 3,000+, Itau with 5,000 and Santander with 5,500+

l there is a great variety in the provision of payment services; Standard Chartered Bank via its partner bank has the widest access to paper clearings, same day clearing systems and ACHs in 33 countries, Citi and HSBC the next widest coverage and most of the other banks far less

l three of the banks provide multilateral netting services, Royal Bank of Scotland with the greatest country coverage

l notional pooling is only available from Bank of America Merrill Lynch and Citi

l sweeping services are available from several of the banks, Citi with by far the greatest coverage in 23 countries, overnight sweeping is available in only a few countries

l investment portals are offered by five of the banks with only Bank of America Merrill Lynch and Citi offering other financial institutions’ investment products as well as their own

l three of the banks offer automated sweeping services into money market funds

l all of the banks offer ICM services in other regions

l only Deutsche Bank provides 24/7 customer service support, the others only during normal office hours.

ICM services in Asia-Pacific In the past 12 months the main issue dominating cash management in Asia-Pacific has been the internationalization of the renmimbi (RMB). The Chinese authorities have been aggressively promoting the role of the RMB and some suppliers are now asking to be paid in RMB. But the RMB is still not an exchangeable currency and has a complex set of regulations governing its use. For corporate treasurers the biggest is-sue is to understand the rules and regulations governing its use, which change frequently, sometimes back to where they were before. Marie-Astrid Dubois, assistant treasurer at Honeywell with responsibility for cash management in Asia-Pacific, says, “Even with a local treasury team in China, a couple of global network banks and contacts with a few large Chinese banks, we spend a huge amount of time making sure and checking that we understand exactly what we can and cannot do.” Cash management in the other countries in Asia-Pacific is relatively simple by comparison.

The 2012 survey of the international cash management services avail-able in the Asia-Pacific region covers 10 banks: Bank of America Merrill Lynch, Bank of China, BNP Paribas, Citi, Deutsche Bank, HSBC, ICBC, JP Morgan, Royal Bank of Scotland and Standard Chartered Bank.

The survey results given in Table 8 show:l a variety of ICM strategies, ranging from providing best practice global cash management services, to being the premier global trans-action bank with robust regional capabilities

l ICBC has the largest own branch network with branches in 31 coun-tries, Standard Chartered Bank the next largest with 20

l ICBC has the highest combined network with its own branches and partner banks covering 58 countries, next is Standard Chartered cover-ing 34

l ICBC has by far the greatest number of its own branches in China with 16,000+, next is Bank of China with 10,000; outside China, Standard Chartered has by far the greatest number of its own branches across the region with more than 900 in the other countries listed

l Citi has a combined total of its own and partner bank branches in the region with more than 150,000, far exceeding any of the other banks

l mass payment and collection services are provided in 20 or more countries by several of the banks

l many of the banks provide some payment card issuing and acquiring services

l the number of banks providing a multilateral netting service has increased from four to six

l the difficulty of providing fully integrated ICM services in the re-gion is shown by the small number of countries covered by pooling and sweeping arrangements

l investment portals offering automated sweeps into money mar-ket funds are provided by seven of the banks

l all of the banks offer ICM solutions in other regions

l HSBC has the largest number of local resident cash management specialists in 20 countries, Citi in 18

l all of the banks offer customer service support in local business hours only.

The futureOver the next year most corporate treasury departments will continue to focus on cash management to ensure adequate liquidity and on optimizing working capital throughout the com-pany and the company’s supply chain. Neil Garrod, group treasurer at Vodafone, says that over the next year he will be focusing on, “The credit quality of cash investments in light of increased cash surpluses as a hedge against liquidity risk. In addition we will be looking at the annual cash collection savings that SEPA has the potential to deliver and which should exceed initial system change outlay costs.”

Table 4: ICM Europe 2012

Bank Bank of America Merrill Lynch Barclays BBVA BNP Paribas SA Citi Commerzbank AG Danske Bank Deutsche Bank AG HSBC ING Bank J.P. Morgan KBC BANK NV Nordea Bank Raiffeisen Bank International Royal Bank of Scotland Santander Standard Chartered Bank SEB SOCIETE GENERALE UniCredit Bank

Region ICM strategy We are an end to end provider of treasury solutions, enabling our clients to optimize working capital and manage risk across

their business

To support our customers in optimising working capital and making transactions effectively, whilst helping them to manage

business risks

Global Scope, Local Expertise: solu-tions tailored to suit transactional

needs

Global, homogeneous solu-tions worldwide. Deep knowl-edge of European markets and

beyond. A well coordinated network of specialists.

We expand investment dialogue, responding to

regulatory change, and provid-ing consultative solutions for

clients

Customer demand-oriented global solutions - Local support

by own branches and our partnerbanks

To offer the best and most flexible Cash Management

solutions for our wholesale and retail customers in the Nothern

European market

Global Transaction Banking - Cash + Trade CEE (Austria,

Switzerland, Czech Republic, Hungary, Poland, Russia,

Ukraine)

To provide a consistent, world-class client experience, with

technology enabling treasurers and FD’s to optimise working

capital management.

Leading provider of European Cash Management and SEPA solutions for Corporates, FI’s and Public sector, with our

subsidiary Bank Mendes Gans

Provide working capital solu-tions to collect, invest and pay

funds worldwide

Provide first class ICM services in home mar-kets Belgium and Ce

Keep our #1 position and the highest market share in our homemarket, to stay among top European banks by en-

hancing our global capabilities.

Raiffeisen Bank International provides CM Services for CEE-customers towards Western

Europe and vice-versa

To be the transactional banking partner of choice

to the Group’s clients

Regional solutions with strong local banks in our core countries and

additional coverage through our country branches and IBOS

To be the leading provider of global working capital solu-tions and core bank for our

clients

A World Class provider of Cash Managment solutions

Our clients benefit from the expertise of Cash Manage-ment specialists for inter-

national and local solutions across our network

Your partner of choice with in depth knowledge of local mar-kets and the expertise of global

cash management solutions

Region Infrastructure and Country CoverageBank processing systems for region: . . . . . . . . . . . . . . . . . . . . . . . . . . . One Global Banking System Multiple / integrated One per country One per region 2 Global and local systems One Bank - One system 1 processing system in CEE (db

internet)Multiple 7 local centres One regional centre Multiple Processing

SystemsRegional and national process-

ing systemsOne per country 2 Global sites 1 2 Global Systems One per country One for region 1/country + EuropeanGate

SWIFT corporate access - No. of corporate users in region: 51-100 1-50 1-50 150+ 150+ 1-50 1-50 1-50 101-150 51-100 1-50 1-50 1-50 1-50 1-50 1-50 51-100 1-50 101-150 1-50Host-to-host connectivity yes yes yes yes yes yes yes yes Yes yes yes yes yes yes yes yes yes yes yes yesDirect interface to treasury systems - No. of different systems covered: 10 6 8 21 8 25 5 20 40 10 10 999 4 1 9 50 135 10 20Region country coverage Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner

E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLAEurozone Full service branch countries: . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 5 7 8 5 8 11 4 13 8 14 4 10 9 5 11 3 11 2 7 6 4 5 12 3 9 3 3 9 11 6 6 12 1 3 9 12 2 6 6 Direct access to : Local Paper clearing systems: 8 5 3 8 2 8 11 4 4 4 8 14 4 10 9 5 7 3 11 2 4 1 4 5 12 3 9 3 3 2 6 3 12 1 2 9 12 2 6 6

TARGET2 system: yes yes yes yes yes yes yes yes yes yes no no yes yes yes yes yes yes yes no yes yes yes yes yes no yes yes yes yes yes yes yes yes yes yes yes yes no yes yes yes yes yes yesLocal automated clearing house: 8 5 4 8 2 8 11 4 9 4 8 14 4 10 9 5 10 3 11 2 7 2 2 5 12 3 9 3 3 9 11 2 3 12 1 3 9 12 2 6 6

Rest of W. Europe Full service branch countries: . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3 6 4 1 2 5 4 6 2 5 4 1 5 3 6 3 3 2 3 2 3 1 4 4 1 5 4 1 1 4 4 4 1 2 3 1 3 Direct access to local: Paper clearing systems: 5 6 4 2 5 4 1 2 2 5 4 1 5 3 5 1 3 2 3 1 3 4 4 1 1 1 1 4 1 4 1 1 3 1 3

Same day clearing systems: 1 4 6 4 2 5 4 6 2 5 4 1 5 3 6 3 3 2 3 2 3 4 4 1 5 4 1 1 4 1 4 1 2 3 1 3Automated clearing house: 1 4 6 4 2 5 4 6 2 5 4 1 5 3 6 3 3 2 3 2 3 4 4 1 5 4 1 4 1 4 1 2 3 1 3

Central & E. Europe Full service branch countries: . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1 19 2 7 9 9 8 5 19 4 11 7 5 5 12 8 2 1 5 4 9 4 12 12 3 7 8 1 9 5 4 13 1 19 Direct access to local: Paper clearing systems: 3 1 19 1 7 9 9 2 5 19 4 11 5 3 12 8 2 5 4 9 4 12 12 1 9 5 4 13 1 19

Same day clearing systems: 3 1 19 1 7 9 9 8 5 19 4 11 7 5 5 12 8 2 1 5 4 9 4 12 12 3 7 7 1 9 5 4 13 1 17Automated clearing house: 3 1 19 1 7 9 9 8 5 19 4 11 7 5 5 12 8 2 5 4 9 4 12 12 3 4 1 1 9 5 4 13 1 17

Region Payment Services (No. of countries where available)Direct member of: - credit transfer scheme: yes yes yes yes yes yes yes yes yes yes no no yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes Yes no yes yes yes no yes yes yes yes yes yes

- direct debit scheme yes yes yes yes yes yes yes yes yes yes no no yes yes yes yes yes no yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes Yes no yes yes yes no yes yes yes yes yes yesMass Disbursement: Eurozone: 13 4 3 4 8 11 3 9 4 8 14 4 9 9 2 10 3 11 2 17 5 12 3 9 3 3 9 10 1 6 12 1 3 9 12 2 6 6

Rest of Western Europe: 5 6 3 1 2 5 4 6 2 5 4 4 2 3 5 3 3 2 3 5 1 4 4 1 5 4 1 4 1 4 1 2 3 1 3Eastern Europe: 4 2 7 9 9 8 5 19 4 7 7 5 12 8 2 5 4 9 4 12 12 3 4 1 9 5 4 13 1 19

Mass Collection: Eurozone: 13 4 3 4 8 11 4 14 8 14 4 9 9 2 7 3 11 2 17 5 12 3 9 3 3 9 10 6 11 1 1 3 9 12 3 6 6Rest of Western Europe: 5 6 3 1 2 5 4 6 2 5 4 4 2 3 5 1 3 2 3 2 1 4 4 1 5 4 1 4 1 4 1 2 3 1 3

Eastern Europe: 4 2 7 9 9 5 5 19 4 7 7 11 8 2 5 9 4 12 12 4 1 7 5 4 13 1 19Payment Cards - debit and credit - issued: . . . . . . . . . . . . . . . . . . . . . . 12 11 6 8 27 13 25 1 14 38 12 1 25 6 19 22 7 30 3 10 12 11 10 15 15 11 8 5 11 12- prepaid cards issued: . . . . . . . . . . . . . . . . . . . . . 1 2 1 3 1 13 3 38 1 5 25 16 3 5 4 15 1 12Payment Card Acquiring for Merchants: . . . . . . . . . . . . . . . . . . . . . . . . 6 4 8 19 14 24 8 38 38 9 19 21 7 30 30 5 9 11 10 15 15 3 9 36Region Liquidity Management ServicesMulti-Lateral Netting Possible number of currencies: 30 81 37 29 27 30 62 163

No. of countries covered: 65 72 52 61 43 49 21 26Notional Pooling (No. of countries where available)Single Country Single currency - Full offset: 17 9 5 4 14 3 5 4 2 3 4 1 11 9 1 10 6 9(All accounts in same location) Partial offset: 9 1 20 14 8 13 14 2 1 9 11 3 2 1 10 1

Multi-currency - Full offset: 1 1 5 1 14 8 3 7 43 1 2 2 3 10Partial offset: 1 20 14 8 13 14 43 1 9 11 3 2 1 10

Number of pooling currencies supported: 30 14 23 25 10 22 22 51 29 27 99 11 37 27 18 99 30 38 19Location where master site/pool can be located: MC in London, SC in branch UK 20 London 14 4 Customer’s choice 15 In all 43 supported countries London KBC countries 11 11 locations all 9 locations Spain & Portugal UK Where local regulations al-

lowedUK/Netherlands/France/

Czech Rep9

Multi-Country Single currency - Full offset: 4 14 4 4 1 16 10(Leave funds locally in each country) Partial offset: 21 20 14 8 13 16 1 9 11 20 2 1 10 19

Multi-currency - Full offset: 4 14 8 3 1 16 10Partial offset: 21 20 14 8 13 16 1 11 20 2 1 10 19

Sweeping (No. of countries where available)Zero/Target Balancing Domestic: 21 12 5 20 27 33 8 19 17 22 22 9 11 13 20 13 1 10 25 19

Cross Border within Europe: 14 28 17 20 23 21 8 18 18 43 22 9 11 16 17 13 1 25 20 17Cross regional: 31 20 2 38 30 24 8 3 9 50 22 11 30 23 15 48 26 24 4

Automatically Triggered Intra-day Between own branches: 9 12 38 23 16 11 13 22 28 22 10 11 4 20 8 2 11 12 17With MT101 agreement banks: 12 223 79 39 33 24 75 50 350 43 13 350 75 16 400 25 21 29 400 120

Overnight sweep & funds returned next day . . . . . . . . . . . . . . . . . . . . . . . 27 13 3 43 9 4 2 19 2 1No. of countries in Europe where master site/pool can be located: 11 9 4 20 23 24 8 13 5 28 9 4 11 10 20 2 1 10 13 6Investment of Excess CashOn-line Investment Portal Availability and products: Own products only Own products only no Own & third party Own & third party Own products only Own products only Own & third party Own Products only Own products only Own & third party Own products only Own products only Own products only Own & third party Own products only no Own products only no Own & third partyAutomated sweeps into money market funds

In which currencies: 4 51 3 3 4 1 5 7 3No. of money market funds: 3 12 148 3 1 33 2 99 3

Other on-line investment instruments:

1 None Time Deposits Online trading time dep.&sec. Money market, FX products Term Deposits, MM funds HSBCnet Liquidity Funds IBP, ING Online, T&I, IBOC(PL) Multiple instruments available none Equities, bonds, warrants N/A Multiple High Yield Accounts Deposits Liquidity Management Account

Provision of ICM Solutions Outside the RegionVia own branches in: Asia/Pacific, Middle East &

Africa, Latin America, North America

Middle East & Africa Asia/Pacific, Latin America, North America

Asia/Pacific, Middle East & Africa, Latin America, North

America


America

Asia/Pacific, North America Asia/Pacific, Middle East & Africa, Latin America, North

America

Asia/Pacific, Middle East & Africa, Latin America, North America

Asia/Pacific Asia/Pacific, Middle East & Africa, Latin America, North

America

Asia/Pacific, Latin America, North America


Asia/Pacific, Middle East & Africa, North America

Latin America, North America Asia/Pacific, Middle East & Africa, Latin America, North

America


America


Asia/Pacific, North America

Via partner banks and/or banking club(s): Partner banks only Correspondent banks only Partner banks & banking club Partner banks & banking club Correspondent banks only Partner banks & banking club(s)

Partner banks only Partner banks only Partner banks & banking club(s) Partner banks only Partner banks & banking club Partner banks & bank-ing club

Partner banks & banking club Partner banks & banking club(s)

Partner banks only Partner banks & banking club Partner banks only Partner banks only Partner banks only Partner banks & banking club

Delivery & Customer ServiceNo. of countries with local resident cash management specialist: 4 14 8 26 36 15 12 7 22 28 13 9 11 15 23 8 9 12 33 19Single customer service department for region : yes no yes yes yes yes yes yes yes yes yes yes yes no yes yes yes yes yes yesCustomer service department/country: yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yesCustomer service performance level guaranteed: yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yesOpening hours: 0800 - 1800 hrs GMT Standard Business Hours Country’s banking hours 8h to 18h.30 CET (Mon-Fri) 08:30-18:00 Country’s banking hours Mon-Fri 8am-5pm 24/7 support via phone/online 07:30 to 18:30 08:00 - 17:00 24 hours, Mon-Fri 9am- 5pm 08.00-18.00 08:00 a.m. - 06:00 p.m. Standard Banking Hours 8 AM - 18 PM CET Standard Banking Hours 8-18 local time 07:45-19:30 CET 08:00am - 06:00pmContact Information Contact Name: Carole Berndt Andrew Crosland Ignacio Escudero Laura Milani Francesco Arleo Jasmin Maraslioglu Claus Sørup Rasmussen Udo Richter Aimee Peters Willem Dokkum Clyde Muir Kristiaan Probst Mikael Kepp Sabine Zucker Neal Livingston José Luis Calderón Sonia Rossetti Robert Pehrson Martine Sodaify Jens Baberg

Country: UK UK Spain Belgium England Germany Denmark CEE UK Netherlands UK Belgium Denmark Austria UK Spain UK Sweden France GermanyTelephone Number: +44 020 7995 7633 +44 0777555 0597 +34 91 374 40 62 +32 2 31 26523 +44 (207) 508-6002 +49 6913646966 +45 45138939 +49 69 910 3994 +44 2079918780 +31 020 56 39921 +44 020 7325 0684 +32 2 429 79 25 +45 33 33 37 56 +43 1 71707 1608 +44 20 7085 0939 +34 912894329 +44 2078857017 +46 705158786 + 33142145715 +49 89 378 20139

Email address: [email protected] [email protected] [email protected] [email protected]

[email protected] [email protected]

[email protected] [email protected] [email protected] [email protected] [email protected] [email protected]


[email protected] [email protected] [email protected] [email protected] [email protected]

[email protected]


Table 4: ICM Europe 2012

Bank Bank of America Merrill Lynch Barclays BBVA BNP Paribas SA Citi Commerzbank AG Danske Bank Deutsche Bank AG HSBC ING Bank J.P. Morgan KBC BANK NV Nordea Bank Raiffeisen Bank International Royal Bank of Scotland Santander Standard Chartered Bank SEB SOCIETE GENERALE UniCredit Bank

Region ICM strategy We are an end to end provider of treasury solutions, enabling our clients to optimize working capital and manage risk across

their business

To support our customers in optimising working capital and making transactions effectively, whilst helping them to manage

business risks

Global Scope, Local Expertise: solutions tailored to suit

transactional needs

Global, homogeneous solutions worldwide. Deep knowledge of European markets and beyond. A well coordinated network of

specialists.

We expand investment dialogue, responding to regu-latory change, and providing

consultative solutions for clients

Customer demand-orient-ed global solutions - Local support by own branches

and our partnerbanks

To offer the best and most flexible Cash Management

solutions for our wholesale and retail customers in the Nothern

European market

Global Transaction Banking - Cash + Trade CEE (Austria,

Switzerland, Czech Republic, Hungary, Poland, Russia,

Ukraine)



capital management.

Leading provider of European Cash Management and SEPA solutions for Corporates, FI’s and Public sector, with our

subsidiary Bank Mendes Gans

Provide working capital solu-tions to collect, invest and pay

funds worldwide

Provide first class ICM services in home mar-kets Belgium and Ce

Keep our #1 position and the highest market share in our homemarket, to stay among top European banks by en-

hancing our global capabilities.

Raiffeisen Bank International provides CM Services for CEE-customers towards Western

Europe and vice-versa

To be the transactional banking partner of choice

to the Group’s clients

Regional solutions with strong local banks in our core countries and

additional coverage through our country branches and IBOS

To be the leading provider of global working capital solu-tions and core bank for our

clients

A World Class provider of Cash Managment solutions

Our clients benefit from the expertise of Cash Manage-ment specialists for inter-

national and local solutions across our network

Your partner of choice with in depth knowledge of local mar-kets and the expertise of global

cash management solutions

Region Infrastructure and Country CoverageBank processing systems for region: . . . . . . . . . . . . . . . . . . . . . . . . . . . One Global Banking System Multiple / integrated One per country One per region 2 Global and local systems One Bank - One system 1 processing system in CEE (db

internet)Multiple 7 local centres One regional centre Multiple Processing

SystemsRegional and national process-

ing systemsOne per country 2 Global sites 1 2 Global Systems One per country One for region 1/country + EuropeanGate

SWIFT corporate access - No. of corporate users in region: 51-100 1-50 1-50 150+ 150+ 1-50 1-50 1-50 101-150 51-100 1-50 1-50 1-50 1-50 1-50 1-50 51-100 1-50 101-150 1-50Host-to-host connectivity yes yes yes yes yes yes yes yes Yes yes yes yes yes yes yes yes yes yes yes yesDirect interface to treasury systems - No. of different systems covered: 10 6 8 21 8 25 5 20 40 10 10 999 4 1 9 50 135 10 20Region country coverage Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner

E SLA E SLA E E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLA E SLAEurozone Full service branch countries: . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 5 7 8 5 11 4 13 8 14 4 10 9 5 11 3 11 2 7 6 4 5 12 3 9 3 3 9 11 6 6 12 1 3 9 12 2 6 6 Direct access to : Local Paper clearing systems: 8 5 3 8 2 11 4 4 4 8 14 4 10 9 5 7 3 11 2 4 1 4 5 12 3 9 3 3 2 6 3 12 1 2 9 12 2 6 6

TARGET2 system: yes yes yes yes yes yes yes yes yes no no yes yes yes yes yes yes yes no yes yes yes yes yes no yes yes yes yes yes yes yes yes yes yes yes yes no yes yes yes yes yes yesLocal automated clearing house: 8 5 4 8 2 11 4 9 4 8 14 4 10 9 5 10 3 11 2 7 2 2 5 12 3 9 3 3 9 11 2 3 12 1 3 9 12 2 6 6

Rest of W. Europe Full service branch countries: . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3 6 4 1 5 4 6 2 5 4 1 5 3 6 3 3 2 3 2 3 1 4 4 1 5 4 1 1 4 4 4 1 2 3 1 3 Direct access to local: Paper clearing systems: 5 6 4 5 4 1 2 2 5 4 1 5 3 5 1 3 2 3 1 3 4 4 1 1 1 1 4 1 4 1 1 3 1 3

Same day clearing systems: 1 4 6 4 5 4 6 2 5 4 1 5 3 6 3 3 2 3 2 3 4 4 1 5 4 1 1 4 1 4 1 2 3 1 3Automated clearing house: 1 4 6 4 5 4 6 2 5 4 1 5 3 6 3 3 2 3 2 3 4 4 1 5 4 1 4 1 4 1 2 3 1 3

Central & E. Europe Full service branch countries: . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1 19 2 9 9 8 5 19 4 11 7 5 5 12 8 2 1 5 4 9 4 12 12 3 7 8 1 9 5 4 13 1 19 Direct access to local: Paper clearing systems: 3 1 19 1 9 9 2 5 19 4 11 5 3 12 8 2 5 4 9 4 12 12 1 9 5 4 13 1 19

Same day clearing systems: 3 1 19 1 9 9 8 5 19 4 11 7 5 5 12 8 2 1 5 4 9 4 12 12 3 7 7 1 9 5 4 13 1 17Automated clearing house: 3 1 19 1 9 9 8 5 19 4 11 7 5 5 12 8 2 5 4 9 4 12 12 3 4 1 1 9 5 4 13 1 17

Region Payment Services (No. of countries where available)Direct member of: - credit transfer scheme: yes yes yes yes yes yes yes yes yes no no yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes Yes no yes yes yes no yes yes yes yes yes yes

- direct debit scheme yes yes yes yes yes yes yes yes yes no no yes yes yes yes yes no yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes Yes no yes yes yes no yes yes yes yes yes yesMass Disbursement: Eurozone: 13 4 3 4 11 3 9 4 8 14 4 9 9 2 10 3 11 2 17 5 12 3 9 3 3 9 10 1 6 12 1 3 9 12 2 6 6

Rest of Western Europe: 5 6 3 1 5 4 6 2 5 4 4 2 3 5 3 3 2 3 5 1 4 4 1 5 4 1 4 1 4 1 2 3 1 3Eastern Europe: 4 2 9 9 8 5 19 4 7 7 5 12 8 2 5 4 9 4 12 12 3 4 1 9 5 4 13 1 19

Mass Collection: Eurozone: 13 4 3 4 11 4 14 8 14 4 9 9 2 7 3 11 2 17 5 12 3 9 3 3 9 10 6 11 1 1 3 9 12 3 6 6Rest of Western Europe: 5 6 3 1 5 4 6 2 5 4 4 2 3 5 1 3 2 3 2 1 4 4 1 5 4 1 4 1 4 1 2 3 1 3

Eastern Europe: 4 2 9 9 5 5 19 4 7 7 11 8 2 5 9 4 12 12 4 1 7 5 4 13 1 19Payment Cards - debit and credit - issued: . . . . . . . . . . . . . . . . . . . . . . 12 11 6 27 13 25 1 14 38 12 1 25 6 19 22 7 30 3 10 12 11 10 15 15 11 8 5 11 12- prepaid cards issued: . . . . . . . . . . . . . . . . . . . . . 1 2 3 1 13 3 38 1 5 25 16 3 5 4 15 1 12Payment Card Acquiring for Merchants: . . . . . . . . . . . . . . . . . . . . . . . . 6 4 19 14 24 8 38 38 9 19 21 7 30 30 5 9 11 10 15 15 3 9 36Region Liquidity Management ServicesMulti-Lateral Netting Possible number of currencies: 30 81 37 29 27 30 62 163

No. of countries covered: 65 72 52 61 43 49 21 26Notional Pooling (No. of countries where available)Single Country Single currency - Full offset: 17 9 5 4 14 3 5 4 2 3 4 1 11 9 1 10 6 9(All accounts in same location) Partial offset: 9 1 20 14 8 13 14 2 1 9 11 3 2 1 10 1

Multi-currency - Full offset: 1 1 5 1 14 8 3 7 43 1 2 2 3 10Partial offset: 1 20 14 8 13 14 43 1 9 11 3 2 1 10

Number of pooling currencies supported: 30 14 23 25 10 22 22 51 29 27 99 11 37 27 18 99 30 38 19Location where master site/pool can be located: MC in London, SC in branch UK 20 London 14 4 Customer’s choice 15 In all 43 supported countries London KBC countries 11 11 locations all 9 locations Spain & Portugal UK Where local regulations al-

lowedUK/Netherlands/France/

Czech Rep9

Multi-Country Single currency - Full offset: 4 14 4 4 1 16 10(Leave funds locally in each country) Partial offset: 21 20 14 8 13 16 1 9 11 20 2 1 10 19

Multi-currency - Full offset: 4 14 8 3 1 16 10Partial offset: 21 20 14 8 13 16 1 11 20 2 1 10 19

Sweeping (No. of countries where available)Zero/Target Balancing Domestic: 21 12 5 20 27 33 8 19 17 22 22 9 11 13 20 13 1 10 25 19

Cross Border within Europe: 14 28 17 20 23 21 8 18 18 43 22 9 11 16 17 13 1 25 20 17Cross regional: 31 20 2 38 30 24 8 3 9 50 22 11 30 23 15 48 26 24 4

Automatically Triggered Intra-day Between own branches: 9 12 38 23 16 11 13 22 28 22 10 11 4 20 8 2 11 12 17With MT101 agreement banks: 12 223 79 39 33 24 75 50 350 43 13 350 75 16 400 25 21 29 400 120

Overnight sweep & funds returned next day . . . . . . . . . . . . . . . . . . . . . . . 27 13 3 43 9 4 2 19 2 1No. of countries in Europe where master site/pool can be located: 11 9 4 20 23 24 8 13 5 28 9 4 11 10 20 2 1 10 13 6Investment of Excess CashOn-line Investment Portal Availability and products: Own products only Own products only no Own & third party Own & third party Own products only Own products only Own & third party Own Products only Own products only Own & third party Own products only Own products only Own products only Own & third party Own products only no Own products only no Own & third partyAutomated sweeps into money market funds

In which currencies: 4 51 3 3 4 1 5 7 3No. of money market funds: 3 12 148 3 1 33 2 99 3

Other on-line investment instruments:

1 None Time Deposits Online trading time dep.&sec.

Money market, FX products Term Deposits, MM funds HSBCnet Liquidity Funds IBP, ING Online, T&I, IBOC(PL) Multiple instruments available none Equities, bonds, warrants N/A Multiple High Yield Accounts Deposits Liquidity Management Account

Provision of ICM Solutions Outside the RegionVia own branches in: Asia/Pacific, Middle East &

Africa, Latin America, North America

Middle East & Africa Asia/Pacific, Latin America, North America

Asia/Pacific, Middle East & Africa, Latin America, North America


America



America


America

Asia/Pacific Asia/Pacific, Middle East & Africa, Latin America, North

America




Latin America, North America Asia/Pacific, Middle East & Africa, Latin America, North

America


America



Via partner banks and/or banking club(s): Partner banks only Correspondent banks only Partner banks & banking club Partner banks & banking club Correspondent banks only Partner banks & banking club(s)

Partner banks only Partner banks only Partner banks & banking club(s) Partner banks only Partner banks & banking club Partner banks & bank-ing club

Partner banks & banking club Partner banks & banking club(s)

Partner banks only Partner banks & banking club Partner banks only Partner banks only Partner banks only Partner banks & banking club

Delivery & Customer ServiceNo. of countries with local resident cash management specialist: 4 14 8 26 36 15 12 7 22 28 13 9 11 15 23 8 9 12 33 19Single customer service department for region : yes no yes yes yes yes yes yes yes yes yes yes yes no yes yes yes yes yes yesCustomer service department/country: yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yesCustomer service performance level guaranteed: yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yesOpening hours: 0800 - 1800 hrs GMT Standard Business Hours Country’s banking hours 8h to 18h.30 CET (Mon-Fri) 08:30-18:00 Country’s banking hours Mon-Fri 8am-5pm 24/7 support via phone/online 07:30 to 18:30 08:00 - 17:00 24 hours, Mon-Fri 9am- 5pm 08.00-18.00 08:00 a.m. - 06:00 p.m. Standard Banking Hours 8 AM - 18 PM CET Standard Banking Hours 8-18 local time 07:45-19:30 CET 08:00am - 06:00pmContact Information Contact Name: Carole Berndt Andrew Crosland Ignacio Escudero Laura Milani Francesco Arleo Jasmin Maraslioglu Claus Sørup Rasmussen Udo Richter Aimee Peters Willem Dokkum Clyde Muir Kristiaan Probst Mikael Kepp Sabine Zucker Neal Livingston José Luis Calderón Sonia Rossetti Robert Pehrson Martine Sodaify Jens Baberg

Country: UK UK Spain Belgium England Germany Denmark CEE UK Netherlands UK Belgium Denmark Austria UK Spain UK Sweden France GermanyTelephone Number: +44 020 7995 7633 +44 0777555 0597 +34 91 374 40 62 +32 2 31 26523 +44 (207) 508-6002 +49 6913646966 +45 45138939 +49 69 910 3994 +44 2079918780 +31 020 56 39921 +44 020 7325 0684 +32 2 429 79 25 +45 33 33 37 56 +43 1 71707 1608 +44 20 7085 0939 +34 912894329 +44 2078857017 +46 705158786 + 33142145715 +49 89 378 20139

Email address: [email protected] [email protected] [email protected] [email protected]


[email protected] [email protected] [email protected] [email protected] [email protected] [email protected]


[email protected] [email protected] [email protected] [email protected] [email protected]

[email protected]


Table 5: North America 2012

Bank Name Bank of America Merrill Lynch BNY Mellon Bank of the West/BNP Paribas Citicorp Deutsche Bank HSBC J.P. Morgan PNC RBC RBS Standard Chartered Bank Wells Fargo Bank NARegion ICM Strategy We are an end-to-end provider of

treasury solutions, enabling our clients to optimize working capital

and manage risk across their business.

Deliver best in class cash management solutions to support

our clients` treasury processes

Support for domestic and international organizations

to optimize cash flow, ensure adequate liquidity and manage risk

To offer a full suite of innovative solutions enabling clients to

manage business with transparency and efficiency throughout the

world

Premier Global Transaction Bank with robust Regional Capabilities


technology enabling treasurers and FD’s to optimise working capital

management.

Provide working capital solutions to collect, invest and pay funds

worldwide

North America Client Focused Top 5 global provider of integrated working capital solutions for local,

regional and global clients.

To be the leading provider of global working capital solutions and core

bank for our clients

Provide the reach of a global network with the strength of one

partner.

We provide anytime, anywhere access to a customer's CM needs

Region Infrastructure and Country CoverageBank processing systems for region: . . . . . . . . . . . . . . . . . . . . . . . . . . . Global 2 systems 1 in US, 1 in Canada with back-up 1 per country - customized Global and Regional One Per Country Global Center One Global Center 3 2 Global Systems One per country 2SWIFT corporate access: No. of Corporate users in region: 101-150 1-50 1-50 1-50 51-100 51-100 1-50 1-50 51-100 51-100 1-50 51-100Host-to-host connectivity . . . . . . . . . . . . . . . . . . . . . . . . . . . yes yes yes yes yes yes yes yes yes Yes yes yesDirect interface to treasury systems: No. of different systems covered: 10 7 1 11 12 20 99 5 5 60 99 8

Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own PartnerE SL E SL E SL E SL E SL E SL E SL E SL E SL E SL E SL E SL

Full service branch countries: . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1 1 2 1 1 1 1 2 1 2 1 1 1 1 2 1 1 1 1 1 1 1 Direct access to local: Paper clearing systems: 1 1 1 1 1 1 1 1 1 1 2 1 1 1 1 1 1 1 2 1 1 1 1

Same day clearing systems: 2 2 1 1 1 1 1 1 2 1 1 1 1 1 1 2 1 1 1 1 1Automated clearing house: 1 1 2 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1

Country Coverage (Full Service Branches) Canada: 1 1 900 1 1100 1 145 960 1 2,500 1,338 1 1,000 900 1,200USA: 5700+ 648 1 1000 6912 1 470 5,400 2,500 1,514 1 1 3,085 9,000

Region(s) in USA where Located: All Midwest, West 1 All Except HI East & West Cost

All Regions Nation- wide 23 States 15states&DC E. coast/midwest 1 1 25 states 39 states & DC

Region Payment Services (No. of countries where available)Check Processing Local Lock Boxes: 2 2 2 1 1 1 2 1 2 1 1 1 1 1 1 1 1 1 1 1

Conversion to ACH payments: 1 1 1 1 1 1 2 1 1 1 1 1 2 1 1Remote image capture and clearing: 1 1 1 1 2 2 1 1 1 1 1 1 1

Same day clearing/Wire payments: 2 2 1 1 1 2 1 1 2 2 1 1 1 1 1 1 1 1 1 1 1Mass Disbursements Canada: yes no yes no no no yes no no no yes yes no yes no yes yes yes yes no yes no yes no yes yes

USA: yes no yes no yes no yes no no yes no yes no yes no yes no no yes no yes yes no yes no noMass Collections Canada: yes no yes no no no yes no no no no yes no yes no yes yes yes yes no yes no yes no yes yes

USA: yes no yes no yes no yes no no yes no yes no yes no yes no no yes no yes yes no yes no noPayment Cards Debit and/or credit - issued: 2 1 1 1 2 2 2 1 1 1 1 2 2

Prepaid - issued 1 1 1 1 2 1 1 1 1 1Payment card acquiring for merchants: 2 1 1 2 1 2 1 2 2

Region Liquidity Management ServicesMulti-Lateral Netting Possible number of currencies: 2 64 70 44 64

No. of countries covered: 2 2 2 2 2Notional Pooling (No. of countries where available)Single Country Single currency - Full offset: 2 1 2 1 1 2 1 1(All accounts in same location) Partial offset: 2 1 2 1 2 1 1

Multi-currency - Full offset: 1 1Partial offset: 2 2 1 1 1

Number of pooling currencies supported:

2 3 2 1 2 26 1 30

Location where master site/pool can be located: U.S. & Canada Montreal New York / Toronto USA Cananda US/UK/Canada 1 New YorkMulti-Country Single currency - Full offset: 1 1 1(Leave funds locally in each country) Partial offset: 2 2 1 1 1 1

Multi-currency - Full offset: 1 1Partial offset: 2 2 1 1 1

Sweeping (No. of countries where available)Zero/Target Balancing Domestic: 2 2 2 2 1 2 2 2 2 1 1 1

Cross border within region: 2 2 2 1 1 2 1 2 2Cross regional: 2 2 2 1 2 2 1 2

Automatically Triggered Intra-day Between own branches: 2 2 1 2 2 2 2 1 1 1 1 1With MT101 agreement banks: 2 2 1 2 2 1 1 2 2 2

Overnight sweep & funds returned next day . . . . . . . . . . . . . . . . . . . . . . . 1 1 1 2 1 2 2 1 1 1 1 1Location where master site/pool can be located: U.S. & Canada California United States NY/Toronto + 30 Intl branches USA US & Canada US/UK Nassau or U.S. New York New York USA 1Investment of Excess CashOn-line Investment Portal Availability and product source: Own & third party no Own & third party Own & third party Own & third party Own products only Own & third party Own & third party no Own products only Own & third party Own & third partyAutomated sweeps into money market funds In which currencies: 1 1 1 1 1 1 1 1 3 1 1 1

No. of money market funds: 5 3 20 10 8 6 8 21 5 3 14Other on-line investment instruments: Bank Liabilities & Third-Party Funds None none Citi Time Deposits, US Commercial

Paper, Repos and MMDAs2 "Offshore Time Deposits, Comm. Multiple instruments available 10 fund families - 115 funds Short-term capital markets

solutionsHYLA

Provision of ICM Solutions Outside the RegionVia own branches in: Asia/Pacific, Europe, Middle East &

Africa, Latin AmericaAsia/Pacific, Europe, Middle East &

Africa, Latin AmericaEurope Asia/Pacific, Europe, Middle East &






Africa, Latin AmericaAsia/Pacific, Europe

Via partner banks and/or banking club(s): Partner banks only Partner banks & banking club(s) Partner banks only Partner banks only Partner banks only Partner banks & banking club Partner banks & banking club Partner banks only Partner banks only Partner banks & banking club(s) Partner banks onlyDelivery & Customer ServiceNo. of countries with resident cash management specialist: 2 1 2 2 1 2 2 2 2 2 1 1Single customer service department for region & location: yes yes yes yes yes no yes yes no yes yes noSingle customer service contact for whole region: no yes yes yes yes no yes yes yes yes yes noCustomer service department/country: yes yes yes yes yes yes yes yes yes yes yes yesCustomer service performance level guaranteed: yes yes yes yes yes yes yes yes yes yes yes yesOpening hours: 08:00 -18:00 ET 12am-6pm EST, 6am-5pm PST Standard business hours 8 am to 8pm Local Hours & 24/7 Support 7 a.m to 7 p.m ET 8.00am-6.00pm EST 7:30AM ET-6:30PM ET 7am - 7pm Standard Banking Hours Mon-Fri 7am to 7pm CT M-F 3:30am-6:00pm PST (U.S.)Contact Information

Contact Name: Dub Newman Marlene Lieberman Alan Verschoyle-King Amol Gupte Arthur Brieske Elisa Chrysanthis Clyde Muir Linda Darling Prabhat Vira Joseph Stark Mary Burchette Judd HolroydeCountry: US USA United Kingdom USA USA US United Kingdom UK USA USA USA USA

Telephone Number: +1 646-743-0948 +1 212-471-6712 +44 20-7964-4034 +1 (212) 816-4072 +1 212.250.1132 +1 516 439 8163 +44 020 7325 0684 +44 (0)2076298761 +1 617-725-5576 +1 6468451156 +1 612-303-7445 +1 415-371-4277Email Address: [email protected] [email protected].

comalan.verschoyle-king@bnymellon.

com [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]


[email protected]

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Santander: Strength comes from combining capabilitiesSantander’s cash management services benefit from its strong local knowledge in markets on both sides of the Atlantic, woven into a flexible global system

For further information, please contact

Banco Santander (SAN.MC, STD.N, BNC.LN) is a retail and commercial bank, based in Spain, with a presence in 10 main markets. Santander is the largest bank in the euro zone and is among the fifteen in the world by market capitalization. Founded in 1857, Santander had €1.383 trillion in managed funds, more than 102 million customers, 14,760 branches – more than any other international bank – and 193,000 employees at the close of 2011. It is the largest financial group in Spain and Latin America. Furthermore, it has significant positions in the United Kingdom, Portugal, Germany, Poland and the U.S. northeast. Santander Consumer Finance operates in the Group’s core markets as well as in the Nordic region. In 2011, Grupo Santander registered €7,021 million in recurring net profit.

Santander’s leading presence allows it to provide competitive local services, always anticipating and adapting to changes in banking practices in each country and continuously developing and improving its technology. Santander has invested heavily in its global products through an ongoing improvement process to provide corporate client-flexible connectivity platforms, able to handle clients’ cash management needs with whatever degree of operational centralization they require. Moreover, our culture and desire to serve our clients to the best of our ability creates a unique value proposition for corporates in our markets.

Having a strong regional presence brings considerable value to our clients, while also facilitating their centralization objectives. At San-tander, we are focused on integrating multiple local cash management services with global products to leverage our broad market experi-ence for the benefit of our customers.

Our key cash management objectives are to enhance the efficiency of clients’ cash management infrastructure, improve control over their cash and increase visibility.

Santander Global Payments (SGP)SGP is a global factory to process massive payment instructions. SGP enables companies to send payment orders directly to a central point of contact, which distributes them throughout Santander’s interna-tional network as local transactions.

Benefitsl Fully automated and unattended processing capabilities, with high straight-through processing (STP) levels, reducing errors and costs for the client. l Efficiency: reducing payment costs and thus improving the efficiency of processing. Using our extensive global and local network and membership of major clearing systems in different countries, coupled

with enhanced STP capabilities, we are able to route payments in a cost-effective way. l Control: SGP sends status messages that enable you to track your pay-ments

Santander Corporate InformationSantander Corporate Information improves visibility and control of balances and movements over accounts held in our branch network or in other financial institutions.

Benefitsl Detailed reports, including statements and balances. l Information for single accounts or groups of accounts l Compliance benefits, improving and standardizing your financial reporting at a regional level. l Homogeneous transaction details for reconciliation. l Flexible delivery channels: SWIFT, Host to Host and other communication protocolsl Various formats: MT940, XML, FinSta, Norm 43, BAI2, etc. l Reporting for all Santander subsidiaries plus third-party bank information.

Santander Global PortalSantander Global Portal offers a window to the world: global, multi-bank payment and reporting.

Benefitsl Access anywhere-from any PC connected to the internetl Aggregated account statements (information based on SWIFT MT940 messages, XML, Finsta, NORM 43, BAI2 and others) l International payment/fund transfers (single access to international cash services in different geographies) based on MT101 messages. l Local payment orders in different geographies.

Table 6: Middle East & Africa 2012

Bank Name Barclays BNP Paribas Citi Deutsche Bank Ecobank HSBC Royal Bank of Scotland Standard Bank Standard Chartered BankRegion ICM Strategy To support our customers in

optimising working capital, whilst helping them to

manage their business risks across the region

Provide both global and local CM product and

services to our corporate clients

We expand investment dialogue, responding to regulatory change, and providing consultative

solutions for clients

To be the premier provider of cash

management solutions to corporate and FI

clients

Leveraging our unrivalled presence across Africa to provide innovative and

integrated cash management solutions.


technology enabling treasurers and FD’s to optimise working capital

management.

To be the transactional banking partner of choice to the Group's

clients

Standard Bank aims to be the leading regional cash management bank,

offering cash management solutions across various African currencies



Region Infrastructure and Country CoverageBank processing systems for region: . . . . . . . . . . . . . . . . . . . . . . . . . . . Multiple / Integrated One per country One per country One per country Single core bank system 8 systems supporting 13 countries 2 Global sites Multiple 2 Global Systems SWIFT corporate access: No. of Corporate users in region: 1-50 1-50 1-50 1-50 1-50 1-50 1-50 150+ 51-100Host-to-host connectivity . . . . . . . . . . . . . . . . . . . . . . . . . . . yes yes yes yes yes yes yes yes yesDirect interface to treasury systems: No. of different systems covered: 1 50 19 20 10 99 9 26 50Region Country Coverage Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner

E SL E SL E SL E SL E SL E SL E SL E SL E SLME & NA Full service branch countries:

. . . . . . . . . . . . . . . . . . . . . . . . . . . 2 11 8 2 3 10 3 2 1 6 4

ME&NA Countries where direct access to:

Paper clearing systems: 2 11 8 1 3 10 3 2 1 6 3

Same day clearing systems: 2 11 8 1 3 10 3 2 1 5 3Automated clearing house: 2 11 8 1 3 10 3 2 1 2 3

Rest of Africa Full service branch countries:

. . . . . . . . . . . . . . . . . . . . . . . . . . . 12 6 11 5 30 5 15 24

Rest of Africa Countries where direct access to:

Paper based clearings: 12 6 11 5 30 1 5 14 24

Same day clearing systems: 12 6 11 5 30 1 5 15 24Automated clearing house systems: 12 6 11 5 30 1 5 12 22

Country full service branches: 13 4,097 42 3,757 13 32,256 50 1 11,448 31 36,646 97 40,000Middle East & North Africa: Kuwait: 1 1 40 1

Turkey: 509 26 4,610 1 10 8Qatar: 1 1 42 5 3Saudi Arabia: 2 173 1 107 239UAE 2 1 5 76 1 8 3 11Egypt: 65 62 11 238 100 150Morocco 257 2

Rest of Africa: Kenya: 119 2 98 22 95 5 33 91Nigeria: 13 631 580 129 27 391South Africa: 975 1 3 1,464 454 951 641 1 421Tanzania: 80 1 47 3 7 7 43Zambia: 55 2 17 4 25 5 17 51

Region Payment Services (No. of countries where available)Mass Payments: 5 10 1 1 18 14 2 20 31 17 27 10 1 4 17 6 6Mass Collections: 5 2 18 14 2 20 31 27 7 5 17 5 6Payment Cards - debit and credit -issued:

5 1 12 2 19 17 17 27 12

- prepaid cards issued: 1 1 6 2 17 17 27 4Payment Card Acquiring for Merchants:

2 11 2 2 11 17 17 27 4

Region Liquidity Management ServicesMulti-Lateral Netting Possible number of currencies: 17 15 29

No. of countries covered: 14 12 4Notional Pooling (No. of countries where available)Single Country Single currency - Full offset: 1 6 14 11 9 1 1 20(All accounts in same location) Partial offset: 1 17 19 3 11 9 1 1 20

Multi-currency - Full offset: 6 4 1Partial offset: 6 5 3 4 1 1 4Number of pooling currencies supported:

23 40 15 9 99 27 46 99

Location where master site/pool can be located: 1 location 17 London Saudi Arabia, UAE, Turkey

Restricted to accounts in same 9 UAE 1 10 locations

Multi-Country Single currency - Full offset: 6 14(Leave funds locally in each country) Partial offset: 6 19 1 2 20

Multi-currency - Full offset: 6Partial offset: 6 4 1 2 20

Sweeping (No. of countries where available)Zero/Target Balancing Domestic: 10 11 19 3 11 10 2 5 20

Cross Border within region: 8 11 11 9 1 20Cross regional: 8 5 11 9 1 48

Automatically Triggered Intra-day Between own branches: 6 19 11 10 2 4 20With MT101 agreement banks: 1 6 London Saudi Arabia, UAE,

TurkeyRestricted to a/cs in same

country9 UAE, TR In country 13 locations

Overnight sweep & funds returned next day . . . . . . . . . . . . . . . . . . . . . . . 10 3 11 46Location where master site/pool can be located: 6 15 1Provision of ICM Solutions Outside the RegionVia own branches in: Europe Asia/Pacific, Europe, Latin

America, North AmericaAsia/Pacific, Europe, Latin America, North America

Asia/Pacific, Europe, Latin America, North

America

Europe, North America Asia/Pacific, Europe, Latin America, North America

Asia/Pacific, Europe, Latin America Europe Asia/Pacific, Europe, Latin America, North America

Via partner banks and/or banking club(s): Partner banks only Partner banks & Banking Club

Correspondent banks only Partner banks only Correspondent banks only Partner banks only Partner banks only Partner banks only

Provision of off-shore banking services in Seychelles or Mauritius yes no no yes no yes no yes yesDelivery & Customer ServiceNo. of countries with resident cash management specialist: 13 18 19 3 13 13 2 4 19Single customer service department for region & location: no yes yes yes yes yes yes no yesSingle customer service contact for whole region: no yes yes yes yes yes yes yes yesCustomer service department/country: yes yes yes yes yes yes yes yes yesCustomer service performance level guaranteed: yes yes yes yes yes yes yes yes yesOpening hours: 08:00 - 17:00 Branch opening hours 08:30 - 18:00 Standard business hours 0800hrs to 1700hrs local time 8am Standard banking hours 8:00am to 4:30pm Standard banking hoursContact Information

Contact Name: Catherine W. Muya Laura Milani Sanjay Sethi Jose-M Buey Nkosi Moyo Vikram Kelkar Neal Livingston Priya Gill [email protected]: Kenya 39471 UAE Spain South Africa United Arab Emirates UK UK SingaporeTelephone Number: +254 714671912 +32 (0) 2 31 26523 +971 4509927 +34 933 673 677 +27 117836197 +97 14 4236481 +44 20 7085 0939 +44 2031455274 +65 6565964197

Email Address: [email protected]

[email protected]

[email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]


Table 7: Latin America 2012

Bank Name Banco Itaú Unibanco S/A Bank of America Merrill Lynch BBVA BNP Paribas Brasil Citi Deutsche Bank HSBC J.P. Morgan Royal Bank of Scotland Santander Standard Chartered BankRegion ICM Strategy To be a full service provider bank

for the region - Itaú Single Bank Managed Concept

We are an end to end provider of treasury solutions, enabling our clients

to optimize working capital and manage risk across their business

Global Scope, Local Expertise: solutions tailored to suit transactional needs

To develop off-shore cash management services for Brazilian Coroprates and

gradually develop domestic cash management capabilities..

To deliver superior treasury, working capital and cash management solutions that

empower our clients and its ecosystem




capital management.


worldwide

Help clients optimize working capital and expamd within LatAm to

other regions

Enhance its strong local cash management capabilities with

the continuously developing and improving its technology on its

global products



Region Infrastructure and Country CoverageBank processing systems for region: . . . . . . . . . . . . . . . . . . . . . . . . . . . One per country and one for the

region1 One per Country Global platform Connexis Cash Global Front End and Regional One per country One per country Single global center Hybrid of local and regional Local and global platfrom 2 Global Systems

SWIFT corporate access: No. of Corporate users in region: 18264 1-50 1-50 1-50 1-50 1-50 101-150 1-50 1-50 1-50 1-50Host-to-host connectivity . . . . . . . . . . . . . . . . . . . . . . . . . . . yes yes yes no yes yes yes yes yes yes yesDirect interface to treasury systems: No. of different systems covered: 10 10 8 6 3 50 2 5 2Region Country Coverage Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner

E SL E SL E SL E SL E SL E SL E SL E SL E SL E SL E SL Full service branch countries: . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2 17 10 1 1 1 23 1 2 12 2 2 6 3 8 1 33 Direct access to local: Paper clearing systems: 5 2 17 10 1 1 1 23 1 2 12 2 1 1 6 3 8 1 33

Same day clearing systems: 5 2 17 10 1 1 1 8 1 2 12 2 1 6 3 8 1 33Automated clearing house: 5 2 17 10 1 1 1 17 1 2 11 2 1 6 3 8 33

Country Coverage (Full Service Branches) Argentina: 81 298 271 63 2,556 1 116 1 343Brazil: 4,680 1 2,400 1 3,945 1 105 3,031 1 838 2 1 1 3,728 1Chile: 79 498 138 236 376 5 1 662 150

Mexico: 1 980 1,808 1,700 4,000 1,186 2 1 1 1 1,098 600Panama: 12 22 24 53 12

Peru: 248 289 15 108 23 400 1 1 1 175Uruguay: 42 42 45 5 460 10 1 42

Venezuela: 106 315 6 85 1 100Region Payment Services (No. of countries where available)

Mass Disbursement: 5 2 17 8 1 1 1 23 1 2 12 2 1 1 1 5 33Mass Collection: 5 17 8 1 1 1 23 1 1 10 1 2 1 1 33

Payment Cards - debit and credit - issued:

5 4 13 10 1 1 11 10 8

- prepaid cards - issued: 5 17 2 1 1 2 1 2Payment Card acquiring for

merchants:5 17 10 1 1 11 1 9 6


No. of countries covered: 2 1 6Notional Pooling (No. of countries where available)Single Country Single currency - Full offset:(All accounts in same location) Partial offset: 2

Multi-currency - Full offset:Partial offset: 2


3

Location where master site/pool can be located: 1 LondonMulti-Country Single currency - Full offset:(Leave funds locally in each country) Partial offset: 2



Cross Border within region: 2 10 1Cross regional: 31 10 1 48

Automatically Triggered Intra-day Between own branches: 2 1 23 1 1 7With MT101 agreement banks: 2 15 44 1 49

Overnight sweep & funds returned next day . . . . . . . . . . . . . . . . . . . . . . . 2 3 1 1Location where master site/pool can be located: Domestic each country New York Buenos Aires, Sao PauloInvestment of Excess CashOn-line Investment Portal Availability and product source: Own products only Own & third party no no Own & third party no Own products only no no Own products only noAutomated sweeps into money market funds In which currencies: 1 3 1 2

No. of money market funds: 1 44 35Other on-line investment instruments: TD, Mutual Funds, T Bill, etc yes Money Market Funds and TDs Money Markets / T.deposits noProvision of ICM Solutions Outside the RegionVia own branches in: North America Asia/Pacific, Europe, Middle East &

Africa, North AmericaAsia/Pacific, Europe, North America Asia/Pacific, Europe, Middle East & Africa,

North AmericaAsia/Pacific, Europe, Middle East & Africa,

North AmericaAsia/Pacific, Europe, Middle East & Africa,

North AmericaAsia/Pacific, Europe, Middle East

& Africa, North AmericaAsia/Pacific, Europe, Middle East &

Africa, North AmericaAsia/Pacific, Europe, Middle East &

Africa, North AmericaEurope, North America Asia/Pacific, Europe, Middle East &

Africa, North AmericaVia partner banks and/or banking club(s): Correspondent banks only Partner banks only Partner banks & banking club Partner banks only Partner banks only Partner banks only Partner banks & banking club Partner banks only Partner banks only Partner banks & banking club Partner banks onlyDelivery & Customer ServiceNo. of countries with resident cash management specialist: 5 3 7 1 23 2 12 2 1 8 7Single customer service department for region & location: yes yes yes yes yes yes yes yes yes yes yesSingle customer service contact for whole region: yes yes yes yes yes yes yes no yes yes yesCustomer service department/country: yes yes yes yes yes yes yes yes yes yes yesCustomer service performance level guaranteed: yes yes yes yes yes yes yes no yes yes yesOpening hours: Brazil business time 0830 - 1730 Country's business hours 24 X 7 Regular Business Hours Local Hours & 24/7 Support Mon-Fri: 8:30 am -7 pm (CT) 8:00am - 4:30pm EST Regular business hours Regular Business hours Standard Banking Hours Contact Information

Contact Name: André Yassuo Yamamoto Juan Pablo Cuevas Ignacio Escudero Ivan Garcia Juan C Lozano Rick Striano Martin Barrios Clyde Muir Prabhat Vira Carlos Gutiérrez Salán Joseph StarkCountry: Brazil United States Spain Brazil USA USA Mexico United Kingdom USA Spain USA

Telephone Number: +55 11 3708-8550 +1 305-347-2811 +34 91 374 40 62 +55 11 3841-3246 +305 305 347 1338 +1 212.250.9602 +52 55 5721 2204 +44 020 7325 0684 +1 617-725-5576 +34 34 912891360 +1 6468451156Email Address: [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]


Table 7: Latin America 2012

Bank Name Banco Itaú Unibanco S/A Bank of America Merrill Lynch BBVA BNP Paribas Brasil Citi Deutsche Bank HSBC J.P. Morgan Royal Bank of Scotland Santander Standard Chartered BankRegion ICM Strategy To be a full service provider bank

for the region - Itaú Single Bank Managed Concept

We are an end to end provider of treasury solutions, enabling our

clients to optimize working capital and manage risk across their

business

Global Scope, Local Expertise: solutions tailored to suit

transactional needs

To develop off-shore cash management services for Brazilian Coroprates and

gradually develop domestic cash management capabilities..

To deliver superior treasury, working capital and cash management solutions that empower our

clients and its ecosystem




capital management.


worldwide

Help clients optimize working capital and expamd within LatAm to

other regions

Enhance its strong local cash management capabilities with

the continuously developing and improving its technology on its

global products



Region Infrastructure and Country CoverageBank processing systems for region: . . . . . . . . . . . . . . . . . . . . . . . . . . . One per country and one for the

region1 One per Country Global platform Connexis Cash Global Front End and Regional One per country One per country Single global center Hybrid of local and regional Local and global platfrom 2 Global Systems

SWIFT corporate access: No. of Corporate users in region: 18264 1-50 1-50 1-50 1-50 1-50 101-150 1-50 1-50 1-50 1-50Host-to-host connectivity . . . . . . . . . . . . . . . . . . . . . . . . . . . yes yes yes no yes yes yes yes yes yes yesDirect interface to treasury systems: No. of different systems covered: 10 10 8 6 3 50 2 5 2Region Country Coverage Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner

E SL E SL E SL E SL E SL E SL E SL E SL E SL E SL E SL Full service branch countries: . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2 17 10 1 1 1 23 1 2 12 2 2 6 3 8 1 33 Direct access to local: Paper clearing systems: 5 2 17 10 1 1 1 23 1 2 12 2 1 1 6 3 8 1 33

Same day clearing systems: 5 2 17 10 1 1 1 8 1 2 12 2 1 6 3 8 1 33Automated clearing house: 5 2 17 10 1 1 1 17 1 2 11 2 1 6 3 8 33

Country Coverage (Full Service Branches) Argentina: 81 298 271 63 2,556 1 116 1 343Brazil: 4,680 1 2,400 1 3,945 1 105 3,031 1 838 2 1 1 3,728 1Chile: 79 498 138 236 376 5 1 662 150

Mexico: 1 980 1,808 1,700 4,000 1,186 2 1 1 1 1,098 600Panama: 12 22 24 53 12

Peru: 248 289 15 108 23 400 1 1 1 175Uruguay: 42 42 45 5 460 10 1 42

Venezuela: 106 315 6 85 1 100Region Payment Services (No. of countries where available)

Mass Disbursement: 5 2 17 8 1 1 1 23 1 2 12 2 1 1 1 5 33Mass Collection: 5 17 8 1 1 1 23 1 1 10 1 2 1 1 33

Payment Cards - debit and credit - issued:

5 4 13 10 1 1 11 10 8

- prepaid cards - issued: 5 17 2 1 1 2 1 2Payment Card acquiring for

merchants:5 17 10 1 1 11 1 9 6


No. of countries covered: 2 1 6Notional Pooling (No. of countries where available)Single Country Single currency - Full offset:(All accounts in same location) Partial offset: 2



3

Location where master site/pool can be located: 1 LondonMulti-Country Single currency - Full offset:(Leave funds locally in each country) Partial offset: 2



Cross Border within region: 2 10 1Cross regional: 31 10 1 48

Automatically Triggered Intra-day Between own branches: 2 1 23 1 1 7With MT101 agreement banks: 2 15 44 1 49

Overnight sweep & funds returned next day . . . . . . . . . . . . . . . . . . . . . . . 2 3 1 1Location where master site/pool can be located: Domestic each country New York Buenos Aires, Sao PauloInvestment of Excess CashOn-line Investment Portal Availability and product source: Own products only Own & third party no no Own & third party no Own products only no no Own products only noAutomated sweeps into money market funds In which currencies: 1 3 1 2

No. of money market funds: 1 44 35Other on-line investment instruments: TD, Mutual Funds, T Bill, etc yes Money Market Funds and TDs Money Markets / T.deposits noProvision of ICM Solutions Outside the RegionVia own branches in: North America Asia/Pacific, Europe, Middle East &

Africa, North AmericaAsia/Pacific, Europe, North America Asia/Pacific, Europe, Middle East & Africa,

North AmericaAsia/Pacific, Europe, Middle East & Africa, North

AmericaAsia/Pacific, Europe, Middle East &

Africa, North AmericaAsia/Pacific, Europe, Middle East

& Africa, North AmericaAsia/Pacific, Europe, Middle East &

Africa, North AmericaAsia/Pacific, Europe, Middle East &

Africa, North AmericaEurope, North America Asia/Pacific, Europe, Middle East &

Africa, North AmericaVia partner banks and/or banking club(s): Correspondent banks only Partner banks only Partner banks & banking club Partner banks only Partner banks only Partner banks only Partner banks & banking club Partner banks only Partner banks only Partner banks & banking club Partner banks onlyDelivery & Customer ServiceNo. of countries with resident cash management specialist: 5 3 7 1 23 2 12 2 1 8 7Single customer service department for region & location: yes yes yes yes yes yes yes yes yes yes yesSingle customer service contact for whole region: yes yes yes yes yes yes yes no yes yes yesCustomer service department/country: yes yes yes yes yes yes yes yes yes yes yesCustomer service performance level guaranteed: yes yes yes yes yes yes yes no yes yes yesOpening hours: Brazil business time 0830 - 1730 Country's business hours 24 X 7 Regular Business Hours Local Hours & 24/7 Support Mon-Fri: 8:30 am -7 pm (CT) 8:00am - 4:30pm EST Regular business hours Regular Business hours Standard Banking Hours Contact Information

Contact Name: André Yassuo Yamamoto Juan Pablo Cuevas Ignacio Escudero Ivan Garcia Juan C Lozano Rick Striano Martin Barrios Clyde Muir Prabhat Vira Carlos Gutiérrez Salán Joseph StarkCountry: Brazil United States Spain Brazil USA USA Mexico United Kingdom USA Spain USA

Telephone Number: +55 11 3708-8550 +1 305-347-2811 +34 91 374 40 62 +55 11 3841-3246 +305 305 347 1338 +1 212.250.9602 +52 55 5721 2204 +44 020 7325 0684 +1 617-725-5576 +34 34 912891360 +1 6468451156Email Address: [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]


Table 8: Asia Pacific 2012

Bank Name Bank of America Merrill Lynch Bank of China BNP Paribas Citi Deutsche Bank AG HSBC ICBC J.P. Morgan Royal Bank of Scotland Standard Chartered BankRegion ICM Strategy We are an end-to-end provider

of treasury solutions, enabling our clients to optimize working

capital and manage risk across their business.

Expand the number of our customers, maintain good customer relationship.

Provide best practice global cash management services to customers

Strong strategic commitment to provide customise regional cash management to our

global client

Combine capability, experience and innovation to deliver unpralleled

treasury solutions, enabling clients to be competitive and sustainable

Premier Global Transaction Bank with Robust Regional Capabilities

To provide a consistent, world-class client experience, with technology enabling treasurers

and FD’s to optimise working capital management.

To achieve a global cash management bank especially focusing on Asia-Pacific, Africa and

Middle-east Market.


worldwide

Top 5 global provider of integrated working capital

solutions for local, regional & global clients



Region Infrastructure and Country CoverageBank processing systems for region: . . . . . . . . . . . . . . . . . . . . . . . . . . . One Global Banking System One per country Regional processing hub [excluding ID] Regional Cash Processing Centre One for the region ex Japan approx. 20 One global Centre Single system with local instances Single system for the region 2 Global SystemsSWIFT corporate access: No. of Corporate users in region: 26-50 1-25 1-25 100+ 1-25 1-25 1-25 1-25 1-25 100+Host-to-host connectivity . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes Yes Yes Yes Yes Yes Yes Yes Yes YesDirect interface to treasury systems: No. of different systems covered: 10 2 20 15 2 20 30 99 4 50Region Country Coverage Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner

E SL E SL E SL E SL E SL E SL E SL E SL E SL E SL Full service branch countries: . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 11 12 2 11 5 4 18 13 14 2 20 31 27 14 11 10 2 2 20 5 9 Direct access to local: Paper clearing systems: 12 1 12 9 1 16 1 13 2 19 10 27 12 8 8 2 2 17 5 6

Same day clearing systems: 12 1 11 1 12 16 14 2 17 15 27 13 10 10 2 2 17 5 5Automated clearing house: 12 1 11 1 9 1 15 1 12 2 17 1 6 27 12 10 9 2 14 5 4

Country Coverage (Full Service Branches) Australia & New Zealand: 1 814 8 1 810 13 1,168 865 28 1 6,715 3 1,000 1 1,710 640China: 3 38,000 10,199 6 4 16,386 56 93,300 5 109 16,347 47,553 6 10,000 5 9,100 80 16,000

Hong Kong: 1 39 260 2 1 22 25 2,006 1 169 133 58 797 1 10 1 76India: 5 16,950 13 4,097 42 3,757 13 32,256 50 1 11,448 1 500 31 36,646 97 40,000

Indonesia: 1 623 6 1 1,614 23 4,824 2 4,625 50 17 1,032 1 200 2 640 28 1,236Japan: 1 5 1 34 24,672 1 2 3 1,789 1 500 1 418 1 1

Malaysia: 2 5 1 13 1 250 42 1 1,140 1 300 2 40Pakistan: 3 5,260 11 2 2,412 143 1,139

Phillipines: 1 915 1 6 1,519 1 919 19 735 1 800 1 6 1,530Singapore: 1 8 1 4 1 10 4 149 1 1 1 19

South Korea: 1 949 4 1 900 299 2,700 1 8,986 11 2 4,830 1 400 1 911 361Taiwan: 1 1 1 107 65 9,680 1 296 38 148 1 90

Thailand: 1 2,520 1 1 150 1 5,689 1 5,092 1 19 1,650 1 729 1 580 27 3,151Vietnam: 1 1 405 2 1,912 1 1,500 14 1 365 1 100 10 2 700 926

Region Payment Services (No. of countries where available)Mass Payments: 12 11 5 10 1 1 18 14 2 20 31 17 27 14 11 10 1 4 17 6 6

Mass Collections: 12 11 5 2 18 14 2 20 31 27 14 11 7 5 17 5 6Payment Cards - debit and credit

-issued:13 5 1 12 2 19 17 17 27 12 12

- prepaid cards issued: 1 1 1 6 2 17 17 27 1 4Payment Card Acquiring for

Merchants:13 2 11 2 2 11 17 17 27 4

Region Liquidity Management ServicesMulti-Lateral Netting Possible number of currencies: 30 5 16 16 25 30

No. of countries covered: 65 4 8 14 31 10Notional Pooling (No. of countries where available)Single Country Single currency - Full offset: 7 4 3 8 6 10 23 3 6 18(All accounts in same location) Partial offset: 11 4 11 15 6 10 23 3 6 18

Multi-currency - Full offset: 3 3 3 6 8 2 2Partial offset: 11 3 11 15 6 8 2 2 9


30 4 11 20 16 15 25 10 25 99

Location where master site/pool can be located: 7 3 3 AU, HK, ID, NZ, SG, JP, CN, SL Ind, SG, HK, SRL, JP, TAI 8 23 Aus., Singa., Hong Kong AU, HK, ID, JP, MY, SG HK,TW,JP,BD,LK,PK,SG,MY,PH,TH,Multi-Country Single currency - Full offset: 4 8 6(Leave funds locally in each country) Partial offset: 11 4 11 15 12 21 13 19

Multi-currency - Full offset: 3 3Partial offset: 11 3 11 15 12 21 13 19

Sweeping (No. of countries where available)Zero/Target Balancing Domestic: 12 5 11 16 15 15 28 14 10 20

Cross Border within region: 7 4 4 10 6 8 25 9 8 20Cross regional: 31 24 4 10 5 7 25 9 6 48

Automatically Triggered Intra-day Between own branches: 20 5 4 10 5 8 28 14 6 20With MT101 agreement banks: 40 3 4 13 2 20 7 52 10

Overnight sweep & funds returned next day . . . . . . . . . . . . . . . . . . . . . . . 12 3 11 16 13 14 28 8 10 20Location where master site/pool can be located: 12 3 11 16 HK, SG, Indon., JP, MY 5 28 Aus, Jpn, Sing, Indo, HK, MY 10 HK,TW,JP,CN,IN,BD,LK,PK,SG,MY,Investment of Excess CashOn-line Investment Portal Availability and product source: Own & third party Own products only no Own & third party Own products only own products only Own & third party Own products only no noAutomated sweeps into money market funds In which currencies: 3 2 2 3 1 1 1

No. of money market funds: 1 3 3 15 1 1Other on-line investment instruments: 2 Time Deposits time deposits and local yield deposit, bond, gold, fund, etc Time Deposit, Call Deposit TD & Structured Products noProvision of ICM Solutions Outside the RegionVia own branches in: Europe, Latin America Europe, Middle East & Africa, Latin

America, North AmericaEurope, Middle East & Africa, Latin America,

North AmericaEurope, Middle East & Africa, Latin

America, North AmericaEurope, Middle East & Africa, Latin

America, North AmericaEurope, Middle East & Africa, Latin America, North

AmericaEurope, Middle East & Africa, Latin America,


America, North AmericaEurope, Middle East & Africa,

Latin AmericaEurope, Middle East & Africa, Latin

America, North AmericaVia partner banks and/or banking club(s): Partner banks only Partner banks only Partner banks only Partner banks & banking club(s) Partner banks only Partner banks & banking club(s) Partner banks only Partner banks & banking club Partner banks only Partner banks onlyDelivery & Customer ServiceNo. of countries with resident cash management specialist: 12 7 12 18 15 20 15 14 10 16Single customer service department for region & location: yes no yes yes yes yes yes yes yes yesSingle customer service contact for whole region: yes no yes yes yes yes yes yes yes yesCustomer service department/country: yes yes yes yes yes yes yes yes yes yesCustomer service performance level guaranteed: yes yes yes yes yes yes yes yes yes yesOpening hours: Standard banking hours Mon to Fri 9:00 AM to 17:00 PM 8.00 am - 6.00 pm 9:00 am to 6:00 pm Local Working Hours 08:30-19:30 local working hours 24 hours Mon-Fri General Bus. Hours + Online Standard Banking HoursContact Information

Contact Name: Ivo Distelbrink XIA Fan Indrajeet Maitra Heather Hoody Pwai-Foon Tang Trudy Frection Iris Ye Clyde Muir Alan Goodyear Lee Swee SiongCountry: Hong Kong China Singapore Hong Kong Singapore Hong Kong P.R. China United Kingdom Singapore Singapore

Telephone Number: +852 2847 6147 +86 010 66594330 +65 62101126 +852 34198742 +65 +65 64238189 +852 2822 4403 +86 10-66105053 +44 020 7325 0684 +65 6518 5038 +65 65964197Email Address: [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]


Table 8: Asia Pacific 2012

Bank Name Bank of America Merrill Lynch Bank of China BNP Paribas Citi Deutsche Bank AG HSBC ICBC J.P. Morgan Royal Bank of Scotland Standard Chartered BankRegion ICM Strategy We are an end-to-end provider

of treasury solutions, enabling our clients to optimize working

capital and manage risk across their business.

Expand the number of our customers, maintain good customer

relationship. Provide best practice global cash management services to

customers

Strong strategic commitment to provide customise regional cash management to our

global client

Combine capability, experience and innovation to deliver unpralleled

treasury solutions, enabling clients to be competitive and sustainable

Premier Global Transaction Bank with Robust Regional Capabilities

To provide a consistent, world-class client experience, with technology enabling treasurers and FD’s to

optimise working capital management.

To achieve a global cash management bank especially focusing on Asia-Pacific, Africa and

Middle-east Market.


worldwide

Top 5 global provider of integrated working capital

solutions for local, regional & global clients



Region Infrastructure and Country CoverageBank processing systems for region: . . . . . . . . . . . . . . . . . . . . . . . . . . . One Global Banking System One per country Regional processing hub [excluding ID] Regional Cash Processing Centre One for the region ex Japan approx. 20 One global Centre Single system with local instances Single system for the region 2 Global SystemsSWIFT corporate access: No. of Corporate users in region: 26-50 1-25 1-25 100+ 1-25 1-25 1-25 1-25 1-25 100+Host-to-host connectivity . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes Yes Yes Yes Yes Yes Yes Yes Yes YesDirect interface to treasury systems: No. of different systems covered: 10 2 20 15 2 20 30 99 4 50Region Country Coverage Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner Own Partner

E SL E SL E SL E SL E SL E SL E SL E SL E SL E SL Full service branch countries: . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 11 12 2 11 5 4 18 13 14 2 20 31 27 14 11 10 2 2 20 5 9 Direct access to local: Paper clearing systems: 12 1 12 9 1 16 1 13 2 19 10 27 12 8 8 2 2 17 5 6

Same day clearing systems: 12 1 11 1 12 16 14 2 17 15 27 13 10 10 2 2 17 5 5Automated clearing house: 12 1 11 1 9 1 15 1 12 2 17 1 6 27 12 10 9 2 14 5 4

Country Coverage (Full Service Branches) Australia & New Zealand: 1 814 8 1 810 13 1,168 865 28 1 6,715 3 1,000 1 1,710 640China: 3 38,000 10,199 6 4 16,386 56 93,300 5 109 16,347 47,553 6 10,000 5 9,100 80 16,000

Hong Kong: 1 39 260 2 1 22 25 2,006 1 169 133 58 797 1 10 1 76India: 5 16,950 13 4,097 42 3,757 13 32,256 50 1 11,448 1 500 31 36,646 97 40,000

Indonesia: 1 623 6 1 1,614 23 4,824 2 4,625 50 17 1,032 1 200 2 640 28 1,236Japan: 1 5 1 34 24,672 1 2 3 1,789 1 500 1 418 1 1

Malaysia: 2 5 1 13 1 250 42 1 1,140 1 300 2 40Pakistan: 3 5,260 11 2 2,412 143 1,139

Phillipines: 1 915 1 6 1,519 1 919 19 735 1 800 1 6 1,530Singapore: 1 8 1 4 1 10 4 149 1 1 1 19

South Korea: 1 949 4 1 900 299 2,700 1 8,986 11 2 4,830 1 400 1 911 361Taiwan: 1 1 1 107 65 9,680 1 296 38 148 1 90

Thailand: 1 2,520 1 1 150 1 5,689 1 5,092 1 19 1,650 1 729 1 580 27 3,151Vietnam: 1 1 405 2 1,912 1 1,500 14 1 365 1 100 10 2 700 926

Region Payment Services (No. of countries where available)Mass Payments: 12 11 5 10 1 1 18 14 2 20 31 17 27 14 11 10 1 4 17 6 6

Mass Collections: 12 11 5 2 18 14 2 20 31 27 14 11 7 5 17 5 6Payment Cards - debit and credit

-issued:13 5 1 12 2 19 17 17 27 12 12

- prepaid cards issued: 1 1 1 6 2 17 17 27 1 4Payment Card Acquiring for

Merchants:13 2 11 2 2 11 17 17 27 4

Region Liquidity Management ServicesMulti-Lateral Netting Possible number of currencies: 30 5 16 16 25 30

No. of countries covered: 65 4 8 14 31 10Notional Pooling (No. of countries where available)Single Country Single currency - Full offset: 7 4 3 8 6 10 23 3 6 18(All accounts in same location) Partial offset: 11 4 11 15 6 10 23 3 6 18

Multi-currency - Full offset: 3 3 3 6 8 2 2Partial offset: 11 3 11 15 6 8 2 2 9


30 4 11 20 16 15 25 10 25 99

Location where master site/pool can be located: 7 3 3 AU, HK, ID, NZ, SG, JP, CN, SL Ind, SG, HK, SRL, JP, TAI 8 23 Aus., Singa., Hong Kong AU, HK, ID, JP, MY, SG HK,TW,JP,BD,LK,PK,SG,MY,PH,TH,Multi-Country Single currency - Full offset: 4 8 6(Leave funds locally in each country) Partial offset: 11 4 11 15 12 21 13 19

Multi-currency - Full offset: 3 3Partial offset: 11 3 11 15 12 21 13 19

Sweeping (No. of countries where available)Zero/Target Balancing Domestic: 12 5 11 16 15 15 28 14 10 20

Cross Border within region: 7 4 4 10 6 8 25 9 8 20Cross regional: 31 24 4 10 5 7 25 9 6 48

Automatically Triggered Intra-day Between own branches: 20 5 4 10 5 8 28 14 6 20With MT101 agreement banks: 40 3 4 13 2 20 7 52 10

Overnight sweep & funds returned next day . . . . . . . . . . . . . . . . . . . . . . . 12 3 11 16 13 14 28 8 10 20Location where master site/pool can be located: 12 3 11 16 HK, SG, Indon., JP, MY 5 28 Aus, Jpn, Sing, Indo, HK, MY 10 HK,TW,JP,CN,IN,BD,LK,PK,SG,MY,Investment of Excess CashOn-line Investment Portal Availability and product source: Own & third party Own products only no Own & third party Own products only own products only Own & third party Own products only no noAutomated sweeps into money market funds In which currencies: 3 2 2 3 1 1 1

No. of money market funds: 1 3 3 15 1 1Other on-line investment instruments: 2 Time Deposits time deposits and local yield deposit, bond, gold, fund, etc Time Deposit, Call Deposit TD & Structured Products noProvision of ICM Solutions Outside the RegionVia own branches in: Europe, Latin America Europe, Middle East & Africa, Latin

America, North AmericaEurope, Middle East & Africa, Latin America,


America, North AmericaEurope, Middle East & Africa, Latin

America, North AmericaEurope, Middle East & Africa, Latin America, North

AmericaEurope, Middle East & Africa, Latin America,


America, North AmericaEurope, Middle East & Africa,

Latin AmericaEurope, Middle East & Africa, Latin

America, North AmericaVia partner banks and/or banking club(s): Partner banks only Partner banks only Partner banks only Partner banks & banking club(s) Partner banks only Partner banks & banking club(s) Partner banks only Partner banks & banking club Partner banks only Partner banks onlyDelivery & Customer ServiceNo. of countries with resident cash management specialist: 12 7 12 18 15 20 15 14 10 16Single customer service department for region & location: yes no yes yes yes yes yes yes yes yesSingle customer service contact for whole region: yes no yes yes yes yes yes yes yes yesCustomer service department/country: yes yes yes yes yes yes yes yes yes yesCustomer service performance level guaranteed: yes yes yes yes yes yes yes yes yes yesOpening hours: Standard banking hours Mon to Fri 9:00 AM to 17:00 PM 8.00 am - 6.00 pm 9:00 am to 6:00 pm Local Working Hours 08:30-19:30 local working hours 24 hours Mon-Fri General Bus. Hours + Online Standard Banking HoursContact Information

Contact Name: Ivo Distelbrink XIA Fan Indrajeet Maitra Heather Hoody Pwai-Foon Tang Trudy Frection Iris Ye Clyde Muir Alan Goodyear Lee Swee SiongCountry: Hong Kong China Singapore Hong Kong Singapore Hong Kong P.R. China United Kingdom Singapore Singapore

Telephone Number: +852 2847 6147 +86 010 66594330 +65 62101126 +852 34198742 +65 +65 64238189 +852 2822 4403 +86 10-66105053 +44 020 7325 0684 +65 6518 5038 +65 65964197Email Address: [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]


Single account solutions: simplification and standardisationSingle account solutions deliver efficiency and reduce operational risk, while still allowing companies to keep the flexibility required for counterparty management. Technology is the key enabler of this next generation of treasury centralization. By Vanessa Manning, EMEA Head, Global Payments, RBS

The markets are experiencing an extended period of volatility and corporate treasurers remain in defensive mode. Maintaining high levels of liquidity and closely managing counterparty risk across banks and suppliers are treasurers’ top priorities, according to recent research for RBS from Greenwich Associates. The research also finds that corporate treasurers have made significant changes to their working capital management in response to the current risk environment. They are, for example, adjusting exposure to banks in line with changing ratings, keeping higher amounts in short-term funds for easy access and choos-ing capital preservation over yield when it comes to investments. All in all, conservative management is the order of the day.

Visibility and control are key requirements In this environment, you might expect the focus to have moved away from increasing treasury centralization to more local and distributed cash management structures. In fact, the opposite has proved the case and the move to treasury centralization is uninterrupted, the research has found. The reason? When economic conditions started to deterio-rate, centralization proved a robust model, allowing companies to react more rapidly and more effectively across their operations: “Centralization brings consistency in our transactions, better control and better knowl-edge and decision making” as one respondent to the survey put it.

Some 83% of the companies interviewed for the research reported they have centralized their treasury at a global rather than regional level. “Centralizing treasury operations into one global centre delivers well-proven benefits: treasurers gain visibility across all balances and exposures, enabling clear and rapid decision-making and resource-allocation, as well as better cost management, ” says Vanessa Manning,

EMEA head, global payments, at RBS. Global electronic banking services, whether over banks’ own networks or via SWIFT, make it easy to manage cross-border liquidity and disbursements efficiently and to operate pay-ments factories and in-house bank models.

Simplifying account structures brings benefits Simplifying account structures is a step in the process of centralization, which delivers its own efficiency and risk management benefits, includ-ing eliminating idle funds trapped in local accounts; easier account reconciliation; reduced account management fees; and better fraud control, through fewer account openings and signatories. Over recent years, many centralized treasuries have consistently worked to reduce the number of accounts and move control of these to the centre.

“Now, treasurers and bankers are taking treasury centralization and simplification to the logical next step and considering the possibility of using a single, central disbursement account for global payments,“ comments Manning.

The drivers of a single account solutionThe drivers of single account solutions are already firmly in place. Today, most centralized treasuries use a simplified account structure, based on a global overlay approach, with local accounts funded from the centre and surpluses swept to the centre on a regular - often daily - basis, using automated cross-border sweeps. The local accounts are used to make low-value, non-urgent payments through in-country domestic payment systems in local currency (and at domestic transaction prices) although the payment instructions may well have been prepared and initiated from a global or regional payments factory.

The step from here to a single disbursement account is a simple and logical one. Why hold multiple accounts to fund payments in different countries, and why be required to specify each payment type, when technology allows you to instruct your bank to make a payment in any location and currency, according to agreed terms? Why fund accounts for this purpose, when your bank can handle it and debit your central disbursement account for the payments made?

SEPA end-dates drive towards single account solutions The proposition is even more compelling, now that a date has finally been set for a mandated move to SEPA credit transfers and direct debits.

Simplified account structure

Global Overlay Structure

Single funding currency account

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“As a result of this decision in the European Commission and Parliament,” says Manning, “SEPA credit transfers and direct debits will become the de facto payment methods for non-urgent euro payments to euro countries in two years’ time (1 February 2014) and to all SEPA countries by 1 February 2016.” Standardization and automation will be enhanced, since the SEPA credit transfer and direct debit message standards are based on ISO 20022 XML. The existing multiple domestic payment systems in euro countries will be harmonized to a single format and – since SEPA credit transfers and direct debits are required to be priced as for local, domestic payments - the advantage of holding local accounts to fund local domestic payments will also fall away in the SEPA area, once SEPA credit transfers and direct debits are widely used. (The current €50,000 transaction limit for this pricing rule will be abolished.)

Automation must offer flexibility Euro payments are, of course, only part of the story, and a successful centralized disbursement process will need to take account of many countries and currencies and build in flexible and transparent FX op-tions, from full automation of the FX transaction to dealer-led pricing, as required and appropriate.

In today’s climate, treasurers are rightly wary of proprietary solu-tions that tie them closely to a single provider, but this is no longer a necessary consequence of treasury centralization and simplification. XML-based standards such as ISO 20022 are now widely adopted for messaging, and SWIFT, the interbank messaging network, is both acces-sible and affordable for corporates. So today it really is possible to create open, bank-independent, solutions giving centralized treasuries a new level of flexibility when it comes to exposure and counterparty manage-ment. For example, future Electronic Bank Account Management (eBAM) capabilities will enable companies using SWIFT to manage their account openings, closings and mandates electronically, using universally recog-nized XML messaging standards.

Operational efficiency enhances risk management Single account solutions for global disbursements offer valuable incre-mental efficiency benefits to centralized treasury operations, payments factories and others with bulk cross-border payments requirements. Such solutions allow users to make their payments in multiple countries and currencies, via local payment methods, without the need to operate local disbursement accounts solely for this purpose - and full transpar-ency of FX rates, routing and transaction pricing is built in. The result is reduced complexity, lower costs and increased control of transactions and working capital flows across a company’s operations.

Structures that deliver operating efficiency in this way also help to man-age risk. Automation demands standardization and delivers transparen-cy, since every transaction must be handled according to set parameters. Standardization also makes it possible to operate with fewer banking partners, while maintaining the ability to switch banks with ease, if necessary for counterparty management reasons.

The next step in treasury centralization is also the next step in treasury automation, but automation is not an end in itself. In today’s climate, treasurers will only adopt these developments because they deliver op-erating efficiency, cost benefits and, above all, better control of working capital for the organization, while preserving the ability to closely control counterparty risk.

Industry-level connectivity across all banksThere are several ways for corporations to connect to the SWIFT network. Direct connectivity is the most expensive and labour-intensive option to manage. SWIFT Alliance Lite offers a quick and relatively easy implementation but volume constraints apply. Most corporations that choose to connect to the SWIFT network do so via a third-party service bureau. The bureau is responsible for all infrastructure requirements, such as software upgrades, contingency arrangements and SWIFT systems expertise, and - because a bureau services multiple clients and benefits from economies of scale – this expertise is available at very affordable rates. The RBS SWIFT Bureau service provides the added reassurance of a relationship managed by the bank, as well as added-value features including reports tailored to your preferred in-house formats.

Interoperable, industry-wide standards The international standard ISO 20022 is based on XML and provides a methodology for developing messages needed by the financial community, allowing for more consistency and interoperability in financial processes and systems.Today, ISO 20022 underlies a number of important initiatives. For example, the SEPA Credit Transfer and Direct Debit standard messages as well as eBAM (Electronic Bank Account Management) use ISO 20022. eBAM enables companies using SWIFT to manage their account openings, closings and mandates electronically using XML messages and digital signatures, reducing the inefficiencies of paper-based account management processes. RBS was one of only four banks taking part in the eBAM pilot in 2011. RBS is an active member of the Common Global Implementation (CGI) group which is reviewing ISO 20022 messages for corporate to bank messaging in cash management to further drive standardisation and interoperability.1

1 For more on ISO 20022, please visit http://www.iso20022.org/

www.rbs.com/mib

Vanessa Manning, EMEA Head, Global Payments, RBS

Payment systems review 2012The global financial crisis disrupted long-established trends in payment systems in 2011. For the first time in many years, cash and cheque usage grew in some countries as growth rates in card usage and other payment systems slowed. The roll-out of same-day settlement options in ACH clearings continued worldwide. SEPA remained a side show, but migration to SEPA credit transfers and direct debits now has an end date. The development of small, but nonetheless important, improvements in other cross-border payment services continued. The biggest developments in 2011 were again in payment factories and collection services, as companies, banks and suppliers focused on improving receivables management and delivering straight-through reconciliation (STR). And mobile payment systems and integrated services are at last beginning to deliver. By Jack and Wolfi Large

Payment systems usageThe large majority of payments are domestic. Even in Europe, with its many small countries, only 3-5% of payments are estimated to be cross-border. In terms of the number of transactions, cash still dominates the global payments market, taking more than 60% of all transactions in most countries. In terms of value, non-cash payment systems, particularly in developed countries, take well over 50% of all payments.

In 2011 there was clear evidence that consumers are making more payments using cash. In the US, the Association of Finance Profession-als (AFP) survey of consumer payment choices showed a slight increase in the usage of cash and in Europe there was similar evidence that consumers are using more cash. The main reason for the increase is that cash payments offer consumers more financial control, which could also explain the continuing worldwide growth in debit card usage and why credit card usage continues to decline. Visa Europe reported that in 2011 debit cards took 70% of Visa spend in Europe matched by more than 10% annual growth rate in debit card usage in North America. There is also evidence of some increase in cheque usage. In the US, processors are reporting B2B cheque payments increased by 1.47%, possibly due to new opportunities for exploiting float. AFP research also suggests an increase in consumer-to-consumer cheque payments.

The 2010 Bank for International Settlements review of non-cash pay-ments in the 20 leading economies, published in 2011, showed an increase of 6.4% to 251 trillion non-cash payments. The review showed the continuing long-term trends in the decline of cheque usage, down by 7% in 2010, and of other paper-based clearing systems. The rate of growth in the use of direct debiting slowed with an increase of only 4% in 2010, down from 19% in 2009, while credit transfers grew by 4%. Payment cards remained the number one non-cash payment method with debit cards by far the most popular globally, taking some 31% of all non-bank transactions and far exceeding payments by cheque which took only 14%.

The usage of same-day payment systems continues to expand with most growth in the low-value clearing systems, such as the UK’s Faster Payments service. The number of transactions using the Faster Payments service grew by 43%, the value per transaction by 16% with an average value per transaction of £447. The number of transactions made through the high-value CHAPS sterling system in the UK grew by 4% in 2011 though the average value per transaction fell by 10%.

SEPAThe Single Euro Payment Area (SEPA) was initiated in 2002 in response to the Lisbon Agenda and regulations on fees for cross-border cash withdrawals. By June 2011 there were 69.2% SEPA-compliant EMV card transactions in the eurozone but by November 2011 only 22.7% SEPA-compliant credit transfers and 0.2% SEPA-compliant direct debits. To ensure that banks and companies commit to SEPA, making all their sys-tems SEPA compliant, an ‘end-date‘ has clearly been necessary for some time. The European Parliament and Council finally reached agreement on a deadline of February 2014 for the migration of both SEPA credit transfers and direct debits and this legally binding date has been agreed by the EC and MEPs. The SEPA deal, ensuring EU-wide rules making payment service providers compete fairly, eliminating hidden national bank charges and accelerating transfers, could save up to €123 billion within six years, claim MEPs, benefiting consumers, banks and businesses. But the 2014 deadline could still prove ambitious. At the SIBOS banking conference in September 2011, many delegates were doubtful whether it was achievable.

Payment cardsMasterCard and Visa operate the only truly global payment clearing and settlement schemes but have still to achieve the expected global penetration of the business-to-business payment market. One of the reasons is that they are primarily ‘debit me’ payment schemes, not credit payment services. There have been several attempts to offer buyer initi-ated payment (BIP) services, eg, single-use card numbers for supplier and employee payment services, but these have not proved very success-ful due to reconciliation issues and lack of cost-effectiveness for high volumes of B2B card payments.

A new approach to BIP services has been developed by US-based Bora Payment Systems, whose Payer Direct Hub BIP service brings purchase card payment efficiencies to both buyers and suppliers, as shown in Figure 1. The buyer enters a purchase card number which is used for account payables payments for either a single or a batch of payments. Bora registers the supplier’s merchant ID and the system routes the pay-ments directly to the acquiring network, where payment is confirmed immediately. The BIP service allows the buyer to control when the pay-ment is made, making reconciliation easier and overall processing more cost-effective. The system can be configured as a buyer and supplier portal for consolidated payment files which can include a mix of ACH and purchase card payments. According to Steve Evans, president of Bora

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Payment Systems, “The Payer Direct Hub’s ability to deliver benefits not possible with single use card number systems will enable the emergence of new markets.”

The corporate payment card market remains under pressure as the finan-cial authorities continue their clampdown on the level of interchange in bank card schemes, which will inevitably reduce the level of rebate the banks can afford to offer corporate clients using their cards. Payments made via mobile phones are also a threat. To ensure they remain major players in the payment service business, all the card schemes are invest-ing heavily in mobile payment technology and infrastructure.

Online paymentsIncreasingly, on-line banking customers are making purchases paying directly from local bank accounts in domestic currencies. The new Online Banking ePayment (OBeP) systems enable consumers to make purchases using their most trusted financial institutions, their banks. Consumers are not required to share their personal information with merchants, instead paying for goods directly from their bank accounts. Usage of these ser-vices is growing, established domestic services are becoming ever more popular and OBeP services are now available locally in many countries. Over the past year, many new OBeP services have been established, another threat to the payment card schemes.

There are many different OBeP services. One of the first was the iDEAL on-line banking payment system in the Netherlands, where most on-line payments are now made using this service. One connection to iDEAL offers web-shop visitors access to ABN AMRO, ASN Bank, Friesland Bank, ING, Rabobank, RegioBank, SNS Bank, Triodos Bank or Van Lanschot Bankiers to make payments from their bank accounts. Other OBeP service providers include SafetyPay, which now has live services in Latin America, Europe and the US, and eWise which is partnering with banks

around the world.

In the US, the Secure Vault Payment System, launched in November 2011, offers guaranteed payments for goods and services purchased on the internet. It is now available through 35 banks serving 22 million US consumers. Banks are readily signing up to offer this new service, which provides real-time authorization of an ACH credit to be settled the next business day, requires no storage of consumer personal account informa-tion and enables the banks to extend their retail online banking services.

On the merchant’s web-site, consumers select the Secure Vault Payment service and their bank from the payment options. Secure Vault then transfers customers to their personal online banking web-site to log in. The transaction information from the merchant’s web-site is passed di-rectly to the financial institution over a secure connection, the funds are authorized immediately and the bank initiates an ACH credit transaction to be settled the next business day, as shown in Figure 2.

The service is popular with consumers because it is a simple and secure way to make a payment from the funds in their bank accounts. The main merchant benefits are guaranteed payment with real-time authorization, so goods can be shipped immediately, and considerably lower charges than for payment cards.

The iDeal on-line banking payment system in the Netherlands was the model for EBA Clearing‘s ‘MyBank’ pilot, due to begin in November 2012, using EBA Clearing‘s SEPA Direct Debit and SEPA Credit Transfer services. The service will enable web-site customers to transfer money directly to merchants’ bank accounts or send merchants a single authority direct debit mandate from their bank’s electronic banking service. The payment will be authorized by the bank and will be guaranteed. The plan is to make the service available across the SEPA region.

Overall business transaction efficiencyPayments are just one part of business transactions. Over the past 12 months there have been many examples of companies, banks and sup-pliers focusing on improving the overall efficiency of the whole business transaction. BanTec, a business processor in the US, has been able to re-duce corporate clients’ total business transaction costs by more than 40% by focusing on the combined work-flows of both the account payables and account receivables departments. Citi’s pension payment service now includes a check on whether the recipients are still alive, so avoiding unnecessary payments.

The use of virtual accounts in payment systems to cut business transac-tion processing costs is growing rapidly. Banks and payment system providers are using sub-accounts within accounts held at other banks to make and collect payments. These services offer new levels of speed for setting up accounts, reduced processing costs and provide much higher levels of payment reconciliation. Several different types of virtual account based services are now available.

The biggest cost in collections is the reconciliation of incoming pay-ments. The key to STR is to identify each incoming payment uniquely, so there is no doubt who sent it and for what. JP Morgan’s Virtual Reference Solution achieves this by assigning ranges of unique virtual reference numbers to corporate clients. The corporate clients then request their customers to pay invoices using virtual JP Morgan refer-ence numbers. When JP Morgan receives a payment it knows exactly

Figure 1 - Bora Payer Direct Hub

Figure 2 - Secure vault payments

Source: Bora Payment Systems

Source: Secure Vault Payments

External Treasury:Navigating a course through Europe’s rough seasUncertainty generated by the debt crisis in the eurozone has added to the challenges faced by treasurers. Making judgments about sovereign and counterparty risk is difficult, especially for companies not headquartered in the region. In this article, Carlo Nazareno, global head of managed treasury and liquidity services product, Bank of America Merrill Lynch, explores the potential advantages of engaging external expertise to free up treasurers’ time to focus on core, value-added treasury tasks during such turbulent times. He analyzes the broader benefits of contracting out treasury services in terms of increasing efficiency and lowering costs at a time when resources are limited. Additionally this article assesses the capabilities of organizations that provide treasury services, and what treasurers must consider before taking this course

Continued crisis in the eurozoneThe debt crisis in the eurozone shows few signs of being resolved in the near future. Greece continues to teeter on the brink of default. And recent credit rating downgrades for many eurozone countries and the European Financial Stability Facility have again highlighted the vulnerability of the region. Many countries in the eurozone are already in recession. For companies that do business in the region, it is understandably a worrying time.

Corporates that are headquartered in the US or Asia Pacific, but which operate in the eurozone, are challenged to keep up to date with such a rapidly changing situation. Sifting through the masses of informa-tion and conflicting opinions from EU institutions and member states, and third-party views from crucial players such as rating agencies is time-consuming. Working out what really matters is harder still.

Markets’ uncertainty about the future of the euro at least with its current 17 members increases sovereign and counterparty risk for companies operating in the region. It requires companies to make tough decisions about how they invest surplus funds and where they keep their cash. They need to have a view on whether some countries will be forced out of the euro, and the probability of increased regula-tion and control over capital flows.

Eurozone instability also means that corporates need to understand the extent to which the banks they work with can withstand shocks. These shocks might be to the financial system in the form of a liquid-ity squeeze (some non-US banks are already experiencing difficulties in securing access to US dollar funds). Alternatively, the shocks could result from a sovereign default, given huge bond holdings by some banks. Either scenario is complex and tricky to gauge.

Treasurers’ increased responsibilitiesManaging the consequences of the eurozone crisis is just the latest responsibility added to treasurers’ job descriptions in recent years. In addition to cutting costs, enhancing efficiency and ensuring the smooth functioning of payments and collections while trying to increase the speed with which cash travels through the business treasurers have taken on numerous additional risk management roles.

The financial crisis that began in 2008 elevated counterparty risk relating to both customers and banks to a board-level concern and placed management of it in the hands of treasurers. Similarly, in-creased concerns about the stability of banks have resulted in a need to more skillfully manage bank relationships. Both concerns mean that treasurers have had to devise strategies for continuity of business in case of country or counterparty default.

The slew of new regulations following the crisis has led to increased complexity in financial services and markets. Inevitably some of the burden of these new compliance requirements, such as the Dodd-Frank Act in the US, has been laid at the door of treasurers. In addi-tion, for companies that operate cross-border, heightened foreign exchange volatility has increased the importance of managing foreign exchange risk another treasury responsibility.

Given such challenges, accurate and timely information about liquid-ity, foreign exchange and other parameters and the ability to process data to derive useful intelligence is crucial if treasurers are to main-tain visibility and control. Moreover, it is essential that processes are in place to enable treasurers to react quickly to changes. Treasurers must have considered multiple contingency scenarios, and made detailed plans to ensure a swift response treasury operations must be able to keep going whatever happens.

Prioritizing strategic decision-makingFor most companies, the greater role of treasurers in making strategic risk management decisions has not been accompanied by an increase in resources for the treasury.

Treasurers seeking to free up time and resources to focus on strategic goals, such as risk management, or value-added tasks such as working capital management, hedging and funding, may consider working with an outside organization for some non-core treasury processes and requirements. Contracting treasury services with an external pro-vider can make sense for companies based within, as well as outside, the region.

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Carlo Nazareno, Global Head of Managed Treasury and Liquidity Product, Bank of America Merrill LynchEmail: [email protected]

Working with an external resource for non-core treasury activi-ties has the potential to lower costs and improve efficiency through economies of scale. It allows a treasurer to retain total control of decision-making, strategy and policy, while entrust-ing execution to external experts.

Moreover, in the current volatile environment corporates can enjoy the benefit of regular interaction with an informed and connected expert treasury services provider that is monitoring the situation.

The importance of trustWorking with an external treasury services provider is a big step for a treasurer. However, for companies of a certain size and level of international activity, there is usually a strong business case, especially during a time when resources are stretched. Equally, the benefits of being able to focus on risk management and decision-making rather than non-core treasury process management can be significant.

When deciding to engage external expertise, treasurers need to know that they will receive candid advice on the options available. They also must be confident of the level and quality of assistance and support they will be given during migration, and know that any transition will be seamless.

Regardless of the extent to which a company decides to man-age treasury services externally, it is crucial that treasurers feel they retain full control of all treasury strategy and policy, and that final decisions are always their responsibility. At the heart of externally-provided treasury services, therefore, must be a strong relationship and genuine trust between a company and the resources it chooses to work with.

That trust can only come from the certainty that the company’s provider of choice can ensure timely and accurate of informa-tion visibility of its treasury services must be equal to having those services operating in-house. Moreover, the treasurer must be confident in the robustness of systems, controls, processes and expertise of an external treasury services provider. The provider must be relied upon for a fast response in the event of emergency or crisis in the eurozone or elsewhere.

Finding the right provider for external treasury servicesOnce treasurers have decided to delegate some non-core treasury activities to an outside provider, they need to think carefully about their requirements in terms of service delivery and their risk tolerance especially given the critical nature of treasury operations when selecting a provider.

There are two main types of entities offering treasury services at the current time. Business process outsourcing (BPO) has become increasingly high profile, with a number of tech-nology and other dedicated companies seeking to work with corporates. Some of these firms offer treasury services alongside many other types of business outsourcing for the back office, such as human resources, or the front office, such as call centres.

BPO companies have a long track record of improving efficiency and enhancing operational flexibility across many areas of busi-

ness; some firms also have experience in providing treasury services. For some companies, contracting out treasury services to a BPO com-pany may be the right choice, depending on the level of expertise they require and their appetite for risk.

An alternative to working with a BPO company is to work with a bank for treasury services. Banks may offer some advantages over BPO firms for treasury services, although it is impossible to generalize, and a bank’s offerings must be evaluated individually.

Robust controls and expertiseAs financial institutions, banks are tightly regulated by dedicated authorities, such as the Financial Services Authority in the UK, for ex-ample. As a result, banks’ processes and controls are more robust and rigidly applied than those of BPO companies. Banks active in man-aged treasury services also have a depth of experience and employ large numbers of treasury personnel across the world, with detailed knowledge of the specific challenges faced by companies.

In terms of technology, banks have sufficient scale to invest in systems that set the benchmark in terms of handling contingencies. Moreover, such systems are continually tested to reflect changes in market conditions. Equally, the high costs of auditing, documenta-tion, controls and back-up systems required by Sarbanes-Oxley, for example are more easily absorbed by banks given their economies of scale. And such services can be delivered as part of an externally managed treasury services package at no extra cost to companies.

By virtue of their constant involvement in financial markets and regular contact with regulators, banks are immersed in the day-to-day changes taking place in the eurozone and elsewhere. They are therefore well placed to access information at the right time, under-stand its implications rapidly and communicate the impact of any changes to companies immediately while outlining possible options for clients.

Focusing on strategic prioritiesThe benefits of engaging external expertise for treasury services in terms of cost savings, efficiency and freeing up treasurers’ time to focus on strategic tasks, can be compelling. What is crucial is that a treasurer fully understands the relative merits of BPO firms and banks, and can therefore make a fully-informed decision based on the needs of the company and the broader challenges faced by the market. Determining the final outcome in the eurozone crisis is extremely difficult, thus having complete confidence in your treasury services resources must be every treasurer’s priority.

which corporate client account to pay the funds into and the corporate client knows for exactly which invoice payment has been received. Because the virtual reference number is passed through the clearing process from the debtor bank to the creditor bank as an integral part of the settlement instruction there is no chance of corrupting or misquot-ing the reference field, the cause of many discrepancies in collections reconciliation.

The Virtual Reference Solution is being piloted in Germany for inbound receipts and collections for ACH and wires payments, in the UK for ACH, Faster Payments and CHAPS payments, and for SEPA credit transfers. JP Morgan creates a set of unique virtual reference numbers for each cor-porate client, automatically associating them with the client’s direct debit-ing account at JP Morgan. The numbers can be re-used and the virtual reference payments received are reported via JP Morgan’s EB platform through its Receivables Edge service. Charges for the service vary and will be flexible depending on client requirements, typically including a set-up fee, charges per virtual reference, transactions processed and an annual maintenance fee. Jeff Hawkes, JP Morgan’s EMEA product head receiva-bles, comments, “This is the beginning of true straight-through reconcili-ation in payment collections and will considerably reduce a company’s operational reconciliation costs.”

RBS in Asia-Pacific has been offering reference accounts in its receivables solution, Smart CollectTM, since early 2011. Smart Collect is an integrated receivables solution available in 10 Asia-Pacific countries designed to accelerate collections, release working capital and increase cost savings by ensuring STR of outstanding receivables, as shown in Figure 3. Simple and accurate reconciliation is achieved by using reference accounts for all payer payments regardless of payment type. The beneficiary can choose whether the reference account is allocated per client or per invoice or can adopt its own internal identification system. A large educational institu-tion in Asia-Pacific was able to reconcile the collection of student fees by using student registration numbers as reference accounts. Clients can also route cash deposits and cheque payments to a chosen reference account using Smart Collect. Funds are credited to the main operating account, with each payment having a guaranteed unique payer or invoice identifi-er. This ensures STR for the beneficiary and eliminates dependency on the payer or payer bank for information. Kelvin See, head of global payments, Asia-Pacific, RBS Global Transaction Services, believes, “Smart Collect has been successful because of the flexibility and automated reconciliation for business-to-consumer and business-to-business collections, which improves the working capital liquidity for companies.”

Managing and optimizing collectionsThe search is on for improved collection processes to minimize the impact of weakening liquidity and the credit crunch with several new products and services launched over the past 12 months.

Increasingly, consumers and businesses are either using traditional prod-ucts and services in new ways, eg, mobile payments, or complicated pack-ages of products and services. The charges for these packaged services are often complex to explain and understand, either because they are provided by multiple parties or due to rapidly changing delivery mecha-nisms, eg, from licence to SaaS, and they are regulated by many different authorities. There are now specialist providers of ‘relationship monetiza-tion’ services to enable businesses to establish what they should charge for the products and services they develop. Metratech’s approach, Agree-ments Based Billing, defines the multi-party agreements required, de-velops the charging rules and provides an IT platform to run the service. The company’s MetraNet product defines the personalized multi-party agreements involved, configures the rule book and provides a product to execute the billing and compensation process. Metratech’s clients include The Depository Trust Clearing Corporation, the world’s largest clearing house, where it has simplified complex multi-business unit agreements to enable the corporation to expand globally using bundled asset classes and streamlined transaction reporting. The result was consolidated pric-ing and billing for all divisions of the corporation, improved billing and risk control, and improved customer experience. Other customers include Microsoft Online Services and telecommunications companies.

Over the years consumers and companies have come to expect multiple options for making payments, which was simple and relatively inexpen-sive for companies and merchants to provide when there were only a small number of payment channels. This is no longer the case. In 2010 NACHA research in the US showed that consumers expected to be able to pay by lockbox, over the counter, via ACH, by credit or debit card, over the phone, via a call centre and several other methods besides. In addition, payment card schemes, mobile phones and the internet have created a whole new range of payment channels, which consumers expect to be able to use. Each payment channel takes companies and merchants considerable time and investment to develop. TransCentra, a provider of billing and payment software and services in the US, estimates that each new payment channel costs companies some $100,000-300,000 to develop plus approximately $100,000 annually to support in messaging, IT, customer support, marketing and management costs. The requirement for multi-channel solutions has become a major problem for companies worldwide.

At the end of 2011, TransCentra launched its multichannel billing and payment service, as shown in Figure 4. Instead of developing and main-taining multiple billing channels, user companies deliver a single billing file to TransCentra, which then bills each consumer and collects the pay-ment through the consumer’s preferred payment channel. According to Todd Shiver, EVP of sales and marketing, “Our approach reduces the cost, time, resources and risk of adding and maintaining multiple billing and payment channels.”

Banks have also been focusing on multi-channel solutions and lowering the overall cost of payment collection. Citi offers an ‘end-to-end receiva-bles solution’ that offers collections from all the main payment systems, cash management efficiencies, full information and visibility, combined with trade and FX services, as shown in Figure 5.

Citi is now focusing its end-to-end receivables services on helping clients achieve STR in their receivables processing. It achieves this by using many different techniques and technologies. The use of enhanced itemized re-porting of receivables information enriched with data from other sources is vital as is the use of virtual accounts for payer identification combined with a fully automated matching service.

Figure 3 - Smart Collect - Integrated Receivables Solution

Source: Royal Bank of Scotland

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Online retailers have to collect hundreds, often thousands, of low-value payments each day, particularly at weekends, in customers’ local curren-cies. The FX hedging and settlement of these payments are a problem, as it can be difficult to price goods and services due to the uncertainty of FX rates. Barclays’ BARX FXPay service simplifies the process, offering a fully automated and bespoke FX settlement solution with guaranteed up-front competitive FX rates for a specific period, from a few hours to several days, eliminating FX risk by carrying out foreign-currency conver-sions of each payment as and when it is made. The service also offers reduced FX management costs through deal aggregation and netting, and captures FX margins previously trapped in the supply chain. Another cost-saving feature of the service is auto-management of the payment reversal process, which automatically applies the original FX rate when a payment is refunded, ensuring customers receive the exact amount they originally paid. BARX FXPay is already used by a number of online retailers who, Colin Digby, director, FX, at Barclays Capital, believes, “Are really benefiting from BARX FXPay intelligently transacting FX in a fully automated way on their behalf. It allows them to focus on running and expanding their business and not worrying about FX.”

Mobile coming of ageThere are 6 billion mobile phone users globally, of whom some 25% use smart phones and are the target market for a whole host of payment services and apps. The explosive demand for tablets, such as the iPad, has generated even more interest in mobile payments and e-commerce. The mobile phone companies, payment card companies, suppliers and processors, and banks have all been investing heavily in mobile technol-ogy infrastructure and services.

The required standards for payments and processing are all now in place and the battle of the electronic wallet between the mobile phone companies, mobile phone manufacturers, the payment networks and banks is under way. There are two main types of wallet, one carried on mobile phones, the other more remote, accessible via the internet. As yet there is no clear leader, but what is clear is that digital wallets will definitely have an impact on how we make payments and manage our finances in the foreseeable future. Mobile phones are an already well established point of sale device to accept payments, with the Square mobile phone POS system already in use throughout the US, where payments by mobile phone are predicted to overtake credit card pay-ments within three to five years.

Mobile applications for corporate treasury departments are now avail-able from all the major cash management banks, often on tablets as well as on mobile phones. US Bank launched its Mobile Singlepoint service in November 2011 with access to viewing account balances, transferring money between accounts, approving wires and ACH payments and viewing cheque images. In 2012 it will be adding ACH Positive Pay, payment initiation and access to viewing payment activity. Banks are providing very different mobile phone services. In October 2011 Citi’s Global Transaction Services launched CitiDirect BE Mobile service giving access to CitiDirect Online Banking services, and in No-vember 2011 Citi launched alerts for its commercial card users. The only truly global mobile service is the HSBCnet Mobile service, which was launched at the end of 2011 and is already live in 65 countries across five continents. HSBCnet Mobile has been designed for corporate treas-urers and senior managers to check account balances and statements, authorize payment instructions and receive payment alerts. The service is available on iPhone, Android and BlackBerry smart phones. In 2012 HSBC plans to expand the range of payment types and balance alerts covered.

There are now some 1.5 billion smart phones worldwide, representing a great opportunity to improve current services and open up whole new markets. Until now it has been cumbersome for consumers to buy goods and services advertised in magazines and newspapers and it has been difficult for advertisers to track the effectiveness of campaigns in print because reading an advertisement for and purchasing something either by filling in an order form or logging on to a website are such different and separate activities. Combining a smart phone with the ‘Simply Tap’ app to securely manage and integrate payment card and delivery address details, can turn an advertisement into a point of sale, providing direct monetization and enhanced advert analytics. Simply Tap users enter the product or offer code, specify the details of the item or items they wish to purchase and click on the ‘Tap Pay’ button. The Simply Tap Instant Mobile Checkout is already live with several leading retailers in the UK. Richard Johnson, group strategy director at Monitise explains, “The exciting thing about the Simply Tap mobile checkout solution is that it solves a real problem for consumers, and drives clear and measurable benefits for retailers and media companies.”

FutureIn the short term, the financial crisis will inevitably have some impact on the payments business with the usage of more controllable pay-ment systems, such as cash and debit cards, increasing. In the longer term, numbers will surely play the most important part. The large number of payment cards will ensure their continuing role in the future of the payments business but it is the overwhelmingly huge number of mobile phones and tablets that will be the next driver. The age of mobile payments has surely arrived.

Figure 4 - Transcentra Multi-Channel billing

Source: Transcentra

Figure 5 - End-to-End receivables solution

Source: Citi

UniCredit case study: NordexWind power system firm Nordex streamlined its Central and Eastern Europe payments but the addition of electronic banking has added new functionality to the solution and improved compliance and efficiency

Nordex is one of the world’s leading producers of wind turbines. It supplies high-output wind turbines in the upper segment of the market for virtually all regions suitable for wind power. As a producer and developer of wind turbines, it concentrates on its core skills, which are engineering as well as maintenance and after-sales services. In selected markets, the company also operates further upstream, for example in wind farm planning. It also offers turnkey project manage-ment solutions if required.

Nordex assembles around 25% of its products at its own facilities and, as a systems integrator, sources some 75% of the components required from its suppliers. The Nordex Group is a single-product company, with a holding company, Nordex SE, based in Hamburg. Vorpommern acts as in-house bank within the Nordex Group.

The main Nordex Group companies are Nordex Energy in Germany, Nordex USA and Nordex (Beijing) Wind Power Engineering & Technol-ogy in China. Nordex has production facilities in Germany (Rostock), China (Yinchuan, Dongying) and the US (Jonesboro). The company has branch offices and subsidiaries in 19 countries.

Reflecting a central treasury approachNordex began working with UniCredit in Central and Eastern Europe for its payments in 2005. Payment processing for Nordex used the bank’s Main Entry Point (MEP) solution, which involved Nordex send-ing orders in SWIFT messaging format MT101 (request for transfer of funds) to the MEP. Payments were then forwarded to third-party banks within UniCredit, which executed them.

As Nordex grew, it wanted to create a treasury solution that better reflected its central treasury approach. “Although Nordex made for-eign currency cross-border payments from its German headquarters for its international operations, several electronic banking solutions were used across the different countries that it operates in,” says Torsten Pohley, international cash management sales in Germany at UniCredit.

Nordex sought a solution that offered centralized payment process-ing via a single point of entry and also wanted to introduce a single automatic cross-border pooling solution. “We wanted to reduce the number of electronic payment applications, payment file formats and communication channels we were using, increase cashflow transparency and impose a central signature by group treasury for all European Nordex companies,” explains Michael Mattig, senior treasury manager at Nordex SE.

The introduction of limited electronic signature rights was especially important to Nordex given the compliance benefits – in terms of the prevention of fraud – they offer. “The use of a single entry point, a single format and a single communication channel also offers cen-

tralization, and therefore efficiency gains from economies of scale,” says Wolfgang Reiser, key account manager for Nordex at UniCredit Bank AG. ”Transparency is also improved because headquarters is responsible for making any national or international payments.”

The solutionFrom 2007, UniCredit began rolling out its EuropeanGate solution to Nordex’s CEE operations on a country-by-country basis. European-Gate offers UniCredit customers access to the UniCredit network via a central communication interface and a single format (XML, EDIFACT, MT101, SAP IDoc and local formats). It differs from MEP because its core functionality includes converting and forwarding payments into local formats – which are usually cheaper – for local execution. “Everyone talks about the benefits of SEPA – and there are many,” says Pohley. “However, for countries outside SEPA with their own cur-rencies – such as Polish zloty, Romanian lei and Turkish lira – SEPA is not applicable and a different approach is required.”

EuropeanGate gives Nordex one point of access, with all accounts managed within UniCredit available via one point of entry. It offers one format, with automated conversion from, for instance, MT101 to low-priced local formats. EuropeanGate also offers a single process for authorization, validation, conversion and re-routing of payment transactions.

During 2011, Nordex started reviewing its payments processes in the light of new compliance requirements. Given the ongoing strategic dialogue between Nordex and UniCredit – and UniCredit’s existing strong relationship with Nordex across many product areas, including FX, money market products and bonds and syndicated loans – Uni-Credit was able proactively to suggest how Nordex might be able to achieve its objectives.

“We proposed that payments should be integrated with UniCredit’s new electronic banking solution,” says Pohley. “By combining Euro-peanGate with the electronic banking solution, Nordex gains the

Michael Mattig, Senior Treasury Manager, Nordex

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functionality of a tool that is accessible from multiple sites, for multiple clients.”

Moreover, UniCredit’s electronic banking solution is unique, given its simplified implementation, ease of use due to cutting-edge HTML tech-nology and interactive SAP link. “The latter feature is especially impor-tant,” notes Pohley. “By interfacing with SAP and automatically importing payment files, the payment process becomes lean and streamlined.” Furthermore, the electronic banking solution makes security paramount: all information is retained with Nordex’s corporate database rather than at the bank; intra-group communications occurs via an intranet; rights and permissions are in line with Nordex’s security criteria; and bank communication is encrypted using the Electronic Banking Internet Com-munication Standard.

Cross-border poolingAs part of its central treasury approach, Nordex wanted to implement a single automatic cross-border pooling solution. “The goal was optimal allocation of group funds to subsidiaries, optimal usage of cash, interest rate benefits, balance sheet optimization and the avoidance of any credit facilities at a local level,” says Mattig.

UniCredit’s solution collects account statements using SWIFT messaging format MT940 (customer statement message) from UniCredit banks in Italy, Poland, Turkey, Romania and Greece servicing Nordex SE. “Nordex can access our hub and retrieve all account information with our new electronic banking tool,” explains Pohley.

Given logistical and regulatory obstacles, at present the euro pool covers Italy and Greece. Nevertheless, it offers centralization of group liquidity, interest optimization within the group, a transparent overview across group entities, simpler manual management of funds and uniform local and international structures, taking account of the legal and fiscal statu-tory regulation.

Reaping the rewardsImplementation of Nordex’s centralized payment processing via a single point of entry and a single automatic cross-border pooling solution involved a comprehensive team of experts in global transaction bank-ing (covering customer projects, customer IT, hotline services, product development and sales) who worked together to ensure a smooth introduction of the new solutions.

“UniCredit was quick to respond to our needs,” says Mattig at Nordex SE. “The bank’s professional knowledge of CEE requirements in respect to local cash management issues was especially important.” UniCredit ensured that it remained flexible during implementation and worked hard to achieve reliability and consistent service quality. “Key to our ap-proach is a single point of contact for the client and – once the solution has gone live – a global account manager supported by a local account manager,” says Reiser.

For Nordex, the benefits of centralized payment processing and a single automatic cross-border pooling solution have been myriad. “Beside the savings in hard cash, the company saves indirectly, treasury know-how is streamlined and there are scale benefits and efficiency gains – the com-pany receives better prices due to larger volumes,” says Mattig. “Overall, Nordex has a lean treasury operation.”

UniCredit UniCredit is a solid European commercial bank, with leadership positions in Italy, Germany, Austria and Poland and a strong presence in other high-growth CEE countries. It is one of the largest European networks with almost 10,000 branches and more than 35 million active customers.With approximately 9,500 professionals in nearly 50 countries, Corporate & Investment Banking serves corporate and institutional clients out of the largest group of network banks in Western, Central and Eastern Europe. Committed to long-term partnerships with clients across all sectors, its relationship managers and product specialists create tailor-made solutions in a strategic dialogue with clients, according to the three pillars of UniCredit’s mission:n corporate banking and transaction servicesn capital markets, structured finance and investment productsn access to Western, Central and Eastern Europe.

Global Transaction BankingGlobal Transaction Banking at UniCredit combines the local exper-tise of over 2,000 professionals with the knowledge and experience of a truly sophisticated global transaction bank. Its diverse and proven set of core competencies in the fields of cash management and electronic banking, trade finance, supply chain management, structured trade and export finance and global securities services have won widespread recognition as demonstrated by the many international awards Global Transaction Banking regularly receives.

Dr Torsten Pohley, International Cash Management Sales Germany, UniCredit

Dr. Torsten PohleyInternational Cash Management Sales GermanyUniCredit Bank AGAlter Wall 22D-20457 HamburgPhone +49 40 3692 6774 mailto:[email protected]

Technology review 2012The pressure on corporate treasury departments to do more with less or, at least, no extra members of staff, continues. Corporate treasurers are demanding complete visibility of their operations, more efficiency and straight-through processing, more flexibility, and bank- and supplier-agnostic solutions. New standards for bank and treasury operations, improved connectivity solutions and the move to web-based cash and treasury management systems are delivering. By Jack and Wolfi Large

ConnectivityImproving connectivity is still one of the main priorities for corporate treasurers, whose preference for bank- and supplier-agnostic connec-tivity systems and services to protect their companies from changes in banks, other service providers and payment systems in the future continues to grow.

SWIFT is a popular choice for many large companies for the delivery of payment instructions to banks, though cash management report-ing, client reporting and general corporate notifications do not really require this level of security. Another important requirement is for connectivity to other parties in the supply chain, not just banks and financial service providers.

Banks and their corporate clients are all committed to standardizing message formats for payments and business transactions. There are now several important programmes under way, including the Common Global Initiative (CGI) for the implementation of the ISO XML 20022 standards involving banks, companies and suppliers. The XML 20022

standard covers payment initiation messages, payment and clearing messages, and bank-to-customer messages. The CGI initiative aims to establish general agreement on common XML ISO 20022 data usage for a harmonized global standard, driven by companies, banks and other suppliers, such as SAP, to ensure that the standards are properly implemented worldwide.

There are now more than 900 companies, an increase of 25% in 2011, connected to SWIFT, including many large groups, some with central-ized operations covering up to several hundred legal entities. SWIFT corporate users are increasingly mid-sized multinational corporations, 70% connected to SWIFT via a service bureau. The balance of messages used by companies on SWIFT is changing, with the fastest growth,

120% in 2011, in the FileAct messages.

In 2011 the SWIFT multi-bank digital signature service, 3SKey, cel-ebrated its first anniversary. 3SKey uses a single token device to ensure safe delivery of data files between companies and their banks and has already been adopted by more than 1,500 corporate users and 25 bank-ing groups. This product represents a change in the nature of SWIFT services for companies. Elie Lasker, SWIFT’s head of corporate market explains, “With an offering such as 3SKey, SWIFT can now also address the needs of corporates which are using the internet (ie, not necessarily the SWIFT network) to connect to their banks.” SWIFT is clearly indicat-ing its intention of providing a considerably wider range of connectivity services for many more companies.

SWIFT has three corporate connectivity solutions: direct connection, connection via a service bureau and the low-volume, low-cost Alliance Lite service. Innovative solutions to make use of the Alliance Lite service even cheaper are emerging. Trellis Integration in North America has developed a low-cost connectivity solution combining its cloud-based

Trellis Payport service with Alliance Lite. This new SWIFT access service is for low-volume users and costs only a few hundred euros to install. Some large companies are also making use of the service when they first connect to SWIFT until their transaction volumes exceed the Alli-ance Lite limit.

Other networksAlthough SWIFT is important in bank-to-corporate connectivity, it actually carries the least traffic of all the financial service networks, par-ticularly when all financial supply chain transactions are included. The largest secure financial network is run by BT, which already serves an international financial community, including banks, brokers and corpo-rate treasurers, with more than 15,000 customer locations worldwide.

“Companies have difficulty understanding exactly which services they are receiving, the fees they are being charged for the services and how they compare to the fees charged by other banks”

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The ‘BT Radianz community’ includes more than 400 service providers offering access to FX trading platforms, securities and derivatives ser-vices and financial information providers who use this privately man-aged ‘cloud’ to deliver their services securely and with 100% reliability. In addition to its internet services, BT also provides more than 10,000 multinational corporations around the world with network technol-ogy to support their internal and external supply chain operations. BT has been providing its non-repudiable, secure and reliable messaging services for more than 15 years.

BT is now able to provide an integrated set of network services for corporate treasury departments combining access to the BT Radianz financial community, the VPN-based supply chain environment and the internet, as shown in Figure 1. Chris Pickles, BT’s head of industry initiatives, global banking and financial markets, believes, “By bridging the network services gap between the supply chain operations of corporates and the transaction and corporate services of banks, we can help to reduce significantly the cost and complexity of corporates’ operations while providing greater flexibility and reach.”

Another approach is to use the host-to-host and other connectivity solutions that the corporate treasury management systems providers have developed to access most of the cash management banks around the world. As an integral part of its services, Bellin, the web-based corporate treasury management systems provider, has a range of con-nections to banks including host-to-host, local banks using different standards and SWIFT bureau links. Martin Bellin, the firm’s managing director, aims to, “ensure that our users do not have to worry about con-nectivity to their banks. Any changes in communication technology or formats we take care of. Our users can even change banks on a global scale without any major implications.”

There is no simple answer to corporate treasury department con-nectivity. The corporate treasury management systems suppliers will inevitably have a role to play in treasury departments’ connectivity to banks and other financial institutions. Kyriba, another web-based corporate treasury management systems supplier, has host-to-host connections to more than 300 banks. SunGard’s EcoSystem Commu-

nication package is used by many corporate treasury departments to protect themselves from possible changes in banking arrangements and in payment systems, particularly in Europe. The trend in corporate treasury communications seems to be to use the connectivity packages and corporate treasury management systems that offer corporate treasury departments most protection from changes in standards and the banks.

Automation of bank relationship managementThe adoption of electronic bank account management (eBAM) is not proving easy to implement. It is proving very difficult because there are so many different processes and parties involved, though there has been some progress over the past 12 months.

Many banks are increasing their fees for the services they provide to compensate for record low interest rates and lack of income from deposits and lending. One major company’s recent analysis of its bank service costs showed that increasing charges have probably added 1% to its borrowing costs. Companies have difficulty understanding exactly which services they are receiving, the fees they are being charged for the services and how they compare to the fees charged by other banks. Bank charges are discretionary and vary widely. The new ISO Global Services Codes will help companies understand exactly what each bank charge is for, but not the fairness or competitiveness of the charge. Consultancy databases of bank charges and fees across many banks, for example, the new BankScore database from The Montauk Group on banks in the US, will continue to be necessary to flush out the inconsist-encies in and unnecessary fees the banks charge their corporate clients.

eBAM is receiving more attention than ever from corporate treasurers, with corporate treasury departments now requesting details of banks’ and other suppliers’ eBAM services in requests for proposals; many have included eBAM projects in their overall treasury plans for the next two to three years. Corporate treasury management systems suppliers are busy adding and updating eBAM modules and specialist suppliers, such as Speranza and Open Systems, are releasing new functionality. It not only sounds too good to be true, it is.

The problem is that there is as yet no complete solution. Many of the systems and standards are incomplete and, if they are, not fully ac-cepted - digital IDs and signatures, for example. So what can corporate treasury departments do right now? Richard Delvaux, director in the PwC Treasury Consulting Team, recommends treasurers focus on a strategy for bank account management (BAM) first. Installing simple BAM systems and processes will achieve 40-50% of the benefits of the eBAM total business case in a remarkably shorter time.

In the longer term, a SWIFT eBAM Central Utility, which is only at the proof-of-concept and pilot stage at the moment, would eliminate many of the standard and message validation problems. There has been some progress over the past 12 months though. Citi now offers eBAM services in 22 countries.

Electronic banking delivery and portalsOver the past 12 months electronic banking delivery services and bank portals have improved significantly, as banks and third-party suppli-ers compete to differentiate their services, and many are now truly

Figure 1 - BT networked communities offering for corporate treasury departments

Source: BT

© 2012 Citibank, N.A. All rights reserved. Citi and Arc Design and CitiDirect are registered service marks of Citigroup Inc.

For the innovative, digitization is the present and the futureSince the invention of the telegraph in the 1830s, technology and banking have evolved in a symbiotic world and on a parallel course. Today, however, communication advances that link corporations and their bankers occur at speeds, and unfold in ways, that were unimaginable 175 years ago

Now, more than ever, technology impacts virtually every aspect of how a company manages its cash flows and structures its banking and funding activities. Corporate treasuries are no longer using computers simply to access online banking reports. They are technologically integrated with their banks for a multitude of mission-critical activities.

What’s more, executives have come to demand immediate, real-time information about their companies’ transactions, cash flows, investments and debts enterprise-wide and no matter where in the world they do business.

Bottom line, the digitization of both money and information is one of the most important megatrends ever to impact financial institutions and their customers.

In today’s digitized, mobilized and globalized world, several major tech-nology developments and challenges are shaping the inter-relationship of enterprises and their banks.

Mobile devices: The new online frontierWith an estimated 6.1 billion mobile phone subscriptions worldwide, and virtually every business executive tethered to his or her favourite mobile device, it is clear that corporate applications represent the next frontier for these ubiquitous personal communications tools.

When it comes to corporate banking in particular, mobile devices represent a logical evolution from, or at least a complement to, the use of desktop and laptop computers as a channel for conducting transactions and accessing data.

Unfortunately, one size does not fill all. The mix of smart phones, tablets and other handheld devices that are in use globally, complicates the development and deployment of industrial-strength business applica-tions. Best-of-breed online banking platforms, for example, offer myriad transaction initiation, tracking and reporting capabilities, plus liquidity management and analytical tools, all of which are important elements of the well-equipped treasurer’s toolbox but require customized adaptation to mobile devices.

As a result, financial institutions are ‘mobilizing’ their online banking applications in an incremental, measured approach, in partnership with their corporate clients. Experiments with new technology, particularly new mobile channels, begin, of necessity, with the introduction of several core functions, such as checking balances, receiving alerts and author-izing payments, then taking the insights and experiences gained with

them to expand functionalities and accommodate a broader range of devices and users.

Mobile devices and tablets also offer new opportunities for businesses and their service providers to connect to enterprise resource planning systems remotely and in real time. This anytime, anywhere access pro-vides added convenience and facilitates fast movements of both money and information.

Online banking: A new generation of platforms with expanded functionalityToday, the majority of corporations and financial institutions are very dependent on their banks’ electronic banking platforms to conduct trans-actions and access account information. In fact, globally quadrillions of dollars of transactions are conducted every day via online banking portals.

At the same time, web-based banking services for businesses are quickly evolving to offer much more than traditional transaction and reporting services. Now, decision support tools, electronic bank account manage-ment, interactive training, and customer service features built on bur-geoning social media technologies are being bundled and delivered over a single portal platform. Banks are also deploying new Web 2.0 and Web 3.0 design principles and tools to define the next generation of online banking and to enhance the user experience.

Systems integration: Easing corporate-bank interoperabilityEven though banks have made headway on common formats, compa-nies still struggle with bank integration during ERP implementations, often throwing significant technical resources at the problem and mak-ing the process far from simple. Citi was the first bank to respond to this problem by offering a simple ISO 20022 template that can be uploaded into an ERP system to produce schema-conforming payment instruc-tions. As a result, integration with Citi’s systems can take place in weeks, as opposed to up to four months without such integrations tools.

The need to simplify bank integration does not stop with common formats and uploadable templates. Sophisticated ERP solutions built on cloud technology are on the horizon, promising ‘plug-and-play’ integra-tion of bank and corporate systems.

The quest for simplicity and control, as it specifically relates to the ex-change of data and information between banks and their customers, also requires common terminology and data references, in addition to quality data. Back office automation can only be achieved if all parties

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come to a common understanding of transaction codes, status report-ing and bank data.

Security: Conquering mobile technology challengesOne of the biggest challenges confronting treasurers who are embracing mobile technology is security. Increasingly, employees are using their personal mobile devices to exchange emails and conduct business, for example. Getting internal IT departments to approve all of the personal devices popping up in the corporate environment is a monumental task – and it will continue to be so for some time. With financial transactions and information, as in other applications of mobile devices, IT must address a host of connectivity and security concerns related to issues such as data being sent to or copied on to a device that is not corporate-issued.

The best way to move forward is to extend the standards established for the traditional computing environment to new devices. For example, personal phone users can be given single sign-on access to corporate emails via mobile browsers that establish corporate security level SSL authentication.

The solution may not be fancy or innovative, but it enables corporate security officers to establish proper controls before creating new security policies and enabling options such biometrics.

Standardization: Simplifying connectivity and improving efficiency, flexibility and controlWhile treasurers travel a never-ending journey in search of greater effi-ciency and control, the degree of operational and connectivity challenges they face is a direct function of their organizations’ infrastructure and culture. The type of bank account and payment infrastructure that can be implemented for a company with a centralized ERP system, for example, will vary greatly from what can be deployed for a company faced with multiple ERP systems and treasury platforms spread across many busi-ness units and geographies.

Historically, electronic connections between corporations and their banks evolved piecemeal over time, in some cases 30 years, stitching together disparate systems and managing multiple communications protocols, security standards, and file formats.

In recent years, however, converging standards and protocols have led to advances in bank-to-corporate connectivity. XML messaging and ISO 20022, for instance, have emerged as a standard for international payment transactions and SWIFT opened its network to corporations, creating a new avenue for corporate to bank connectivity.

Thus, forward-thinking companies are standardizing their bank interfaces via open standards such as SWIFT and ISO 20022. By moving away from proprietary standards, they can simplify information exchange and systems integration with their banks and also more easily consolidate and switch banking relationships as necessary. Some 900 companies world-wide, for example, including names such as GE, Microsoft and T-Mobile, have used SWIFT connectivity to rationalize their banking platforms.

Likewise, the deployment of ISO 20022 has been a welcome development for companies seeking more transparency into their payment providers’ processes. Citi, for example, has responded by providing ISO 20022-based payment status reports and tracking to users of its CitiDirect® Online Banking platform.

Investment: Determining the right level to achieve the desired technology end-stateThe end game for virtually all cash managers is to simplify the processing of payables, receivables and various other banking transactions. It also includes gaining more control over, and visibility into, their accounts and transactions to improve efficiencies, stitch together far-flung operating centres, and also comply with ever-changing regulatory and compliance requirements.

Toward this end, treasurers and their IT departments must stay current and determine the right level of technology investment to create a well-designed and integrated ‘technology topography’ that will future-proof their operations. This includes understanding the risks and opportunities associated with supporting new devices and networking technologies.

The new world of digital bankingIt’s clear: the future and the present are digital. These trends represent driving forces in the evolution of, and definition of, digital banking and will have a profound impact on how businesses both interact with their banks and manage broader financial supply chain activities.

Citi, which is committed to becoming the digital bank of the future, is harnessing the newest technologies to provide smart, secure, and intui-tive methods for businesses and institutions to interact with us and their other business partners alike using multiple devices – any time and from anywhere.

Treasurers and financial managers looking to optimize their technology investments and define a strategic path forward must partner with their financial service providers to both leverage and steer their technology investments and to reap the huge rewards of digitization.

JP Jolly, Global Head of Channel & Enterprise ServicesGlobal Transaction Serviceswww.treasuryandtrade.transactionservices.citi.com

global. Omikron Systemhaus launched its MultiCash Cash Management solution in China, where it now accepts payment and collection files in local formats. It is also piloting an integrated multi-bank solution for 25 Chinese and Asian banks.

Deutsche Bank launched its Autobahn App Market in 2011, the first app-based electronic client offering in the financial services industry, offering apps in three areas, pre-trade, execution and post-trade, which can be combined and tailored to meet individual clients’ business requirements. Deutsche Bank has since added apps for liquidity and financial supply-chain management, securities portfolio reporting, fund auctions, restruc-turing agency services and fund management reporting. To date, some 150 apps are live and a further 100 are in development. Rhomaios Ram, head of product management, Global Transaction Banking at Deutsche Bank, believes, “The App Market is a ground-breaking example of how electronic products across business divisions can be combined, allowing users to browse, search and store favourite content and systems for direct future access – all in a fast and easy manner.”

The large banks have been investing hugely as they expand the range and depth of their electronic banking services and portals. Much of their investment has been on infrastructure and core functionality. Bank of America Merrill Lynch’s CashPro On-line EB service has a new information reporting service which holds a full year of all multi-bank data. It uses ad-vanced techniques to download large data files in seconds and provides advanced analytics for data searches. It provides the information in a wide range of different formats, nine at present, with several others com-ing later in the year. The service also normalizes the whole database to ensure that the user experience is the same, whether using the host-to-host service or the web. New workflow techniques have been introduced to make it easier for users to access and understand the data. Milton Santiago, portal and treasury eCommerce executive at Bank of America Merrill Lynch, explains, “We have focused on using a social media-type approach and other techniques that are familiar to consumers.”

The delivery of cash management services via mobile devices, phones and tablets, offers the opportunity for banks to add a new dimension to their products and services. All the major banks are releasing mobile services, promoting them as an opportunity to access time-critical functions anywhere, any time. The range of mobile services is constantly expanding. Citi, for example, has just added alerts to warn travel manag-ers of excess spending on travel and entertainment cards. And security is becoming less of an issue. US Bank will be releasing new security systems for its mobile phone application, replacing a security token with a one-time password. Flexibility, ease and consistency of use across mobile phones, tablets, laptops and office computers are essential to the EB and portal services of the future.

Treasury automationThe steady move from self-hosted treasury systems and services to web-based Software as a System (SaaS) solutions over the past two to three years seems to be accelerating. Most new treasury system

Figure 2 - Reval Enterprise Treasury and Risk Management System

CashManagement

Financial Risk Management

Hedge Accounting& Compliance

LiquidityManagement

ALL-IN-ONE TREASURY AND RISK MANAGEMENT SOLUTION FOR THE ENTERPRISE

Self Hosted Web Enabled Web Based ASP SaaS

Customer hosts the applica-tion in their own environ-ment

Fat client installation within the treasury department

All functionality, reports and payments, etc. is available via browser only

Rent or purchase of the license

Mostly “pay as you go” rental

Application can be any kind of technology including web-based or web-enabled

Sometimes accessible via browser, but not using browser functionality

Application accessed via a browser + any internet enabled device

Hosted service provided by a third party

Hosted service provided by a third party

High level of education required to support and administer the application

Limited functions for the group companies to upload reporting requirements to the treasury

No additional h/w or s/w required by client Enables quick rollout

Customer has their own unique copy of the applica-tion, i.e. no sharing of the same application with other customers

(Alternatively ) Customers share the same copy of a single application

Source: Bellin

Table 1 - Treasury automation

Source: Reval

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services and solutions are now either web-based, ASP (applica-tion service provider) or SaaS, as described in Table 1. They provide enterprise-wide cash management, incorporating not only the traditional FX and other instruments but also other elements relevant to businesses, such as energy costs and commodity management. The corporate treasury management system is becoming the working capital engine of the company.

SaaS solutions can be put together in many different ways. Reval acquired the Austrian treasury management system company ecofi-nance at the end of 2010 to fill the missing piece in its corporate offer-ing, Global Cash and Liquidity Management. Last October, it released its enterprise Treasury and Risk Management (TRM) SaaS solution, an expanded offering of the firm’s cloud-based SaaS solution for financial risk management, as shown in Figure 2. Jiro Okochi, Reval’s CEO, comments, “Companies now won’t have to trade off sophisticated risk for robust cash and liquidity functionality. They can have both, and should have both, in one solution for better visibility and control across the enterprise.” Reval has clients in North America, EMEA and APAC rolling out its integrated solution.

FiREapps recently launched a new set of packaged solutions, which provide full life-cycle support for FX exposure management and seamless interaction with liquidity providers and treasury manage-ment systems, as shown in Figure 3. While combining software and services is typical in SaaS solutions, FiREapps also provides compre-hensive operational support. Andy Gage, vice president at FiREapps, believes, “FiREapps’ battle-tested solutions bring the future of FX to corporates who need it now – whether they’re just starting out or

looking for fully-automated, closed-loop processes.”

The significant change of attitude by corporate treasurers to web-based ASP and SaaS treasury management solutions is leading to all types and sizes of company using web-based ASP services and SaaS corporate treasury management solutions. Proctor & Gamble uses the ASP version of Wall Street Suite. Users of Bellin’s web-based SaaS include Flextronics and Virgin Atlantic Airways. Users of Kyriba’s cloud-based treasury service include Enbridge, a Canadian energy company with a $14 billion turnover, and Peugeot. And users of Reval’s SaaS-based hedging and risk management solution include many of the largest companies in the world.

Large multinational corporations are installing one of two types of corporate treasury management systems, large strategic systems or highly configurable modular systems, both of which are now mostly web-based ASP or SaaS solutions. In the past year, the strategic treasury systems, which provide support for trading desks, ad-vanced risk management and the capacity to process large volumes of payments, have been purchased by only a handful of global multinational corporations. Demand for the configurable modular systems has been far greater. RSA Insurance Group installed Wall Street Systems’ City Financial platform early in 2011 to carry out its cash management, foreign exchange and treasury risk manage-ment activities. Like many general insurers, RSA operates a relatively

decentralized treasury structure, and so it is essential to be able to make the corporate treasury system available to users worldwide. Having an ASP or SaaS solution was therefore an important factor in its choice of treasury system. For the RSA Group, the flexibility in configuring the City Financial system and being able to use an ASP solution has been vital. Daniel Ferguson, treasury manager at RSA, believes, “The ASP solution has enabled us to focus on the functional requirements rather than the technical set-up, and is a great help in ‘selling’ the platform to RSA’s subsidiaries.” RSA is now rolling out the system worldwide.

New integrationNew technologies and solutions are now delivering whole new levels of cash and treasury management integration. With the capability to ‘weave together’ solutions by the ‘appropriate combination’ of apps and systems from a combination of banks and suppliers, far greater flexibility in putting together cash and treasury management solu-tions is possible. And the integration of mobile services, covering mobile phones, tablets and laptops, into the day-to-day operations of the corporate treasury department will soon make 24/7 operations a sad reality.

Figure 3 - FiREapps FX STP

Source: FIREapps

“Flexibility, ease and consistency of use across mobile phones, tablets, laptops and office computers are essential to the EB and portal services of the future”

Cash Management at the heart of BNP ParibasThe once mundane business of cash management has moved to the centre of corporate concerns – and of banks’ earning strategies in the wake of the financial crisis. For BNP Paribas, merger with Fortis and subsequent investment has led to a significant capabilities in this area

The financial crisis that began in 2008 – and continues now in the guise of a turbulent global macro-economic environment and the eurozone debt crisis – has dramatically increased the importance of cash man-agement for both corporates and banks. Historically, cash management was simply the mundane, though important, business of payments and collections; it then made a significant advance with the introduction of new technologies and with the evolving importance of the treasury, which now both play a vital role in improving business performance.

“The changed financial, economic and regulatory environment of recent years has now put cash management at the front of clients’ and banks’ minds,” says Marc Grouvel, Head of Cash Management, Corporate and Transaction Banking Europe, at BNP Paribas. “Ensuring access to liquidity and managing counterparty risk is now a board-level concern for clients. An effective treasury system and the right selection of bank-ing partners – especially as governments can no longer be system-atically relied on to bail out banks given their deficit problems – are essential for stability.”

The centrality of cash management to banks has been markedly elevated. “It has always been a source of steady revenues with low capital consumption but both of those aspects are now much more important to banks,” says Grouvel. “Cash management is now also seen as an important source of liquidity for banks. That will further increase: Basel III treats deposits from relationship clients – such as those using cash management services – more favourably in run-off ratio calcula-tions and consequently servicing these clients will become even more important to banks.”

The heightened concerns surrounding counterparty risk currently work in BNP Paribas’ favour given its rating of AA- (Standard & Poor’s), Aa3 (Moody’s) and A+ (Fitch). “We are one of the highest-rated banks in Eu-rope: our position remains strong,” says Grouvel. BNP Paribas discusses its financial position with clients on a regular basis and shares financial reports and details of capital adequacy with them frequently. Trust and communication are crucial especially in the current financial climate.

Within BNP Paribas, cash management is now a top priority, receiving greater attention from top management. As a result, the business is benefiting from ongoing investment capability to support its clients in the long term. Corporates have benefited from a greater level of ma-turity and breadth of the bank’s cash management offering. “We came out of the last financial crisis stronger and we are now investing further to service clients’ requirements across Europe and Asia-Pacific,” says Grouvel. “There have been no cutbacks in cash management and we continue to recruit the best talents in the market. Our deep capabilities

in just about every country in Europe and across the globe are here to stay – this is a long-term business and we are in it for the long term.”

Expanded capabilitiesThe merger of BNP Paribas’ markets business and Fortis’ corporate banking network is now complete with fully-integrated and reorgan-ized teams across Europe bolstered further by a number of external recruitments.

BNP Paribas has been steadily developing its market position and most especially in Europe; for instance, BNP Paribas now has 150 business centres in 23 European countries spanning its Retail Banking and Corporate and Investment Banking divisions. BNP Paribas has access to every relevant clearing system in these 23 countries in which it oper-ates directly, away from any white label solution.

“The ability to deliver the right solutions and to respond quickly to the changing landscape is essential,” says Grouvel. “The merger and the sustained investment that has followed – which has allowed us to considerably expand our cash management capabilities – has given us an unparalleled ability to meet clients’ needs and expectations. We are confident that we can implement any pan-European solution that a client requires.”

The main driver of BNP Paribas’ product and service innovation is client demand. “We forge a deep relationship with our large clients in particu-lar which requires that we be flexible and adapt to their changing or initially uncharted demands,” says Grouvel. “The client is at the centre of our organization and we are always prepared to invest to tailor our products. This is not about imposing pre-defined solutions but about adaptability and client-centricity.”

To ensure that solutions deliver for clients, BNP Paribas has doubled the size of its implementation team globally and senior product managers have been given the capability to adapt their treasury products to meet client demand. At the same time, the bank spends a lot of time look-ing at the impact of broader technology trends so that its capacity to innovate can be genuinely ground-breaking. “The goal is to be able to meet clients’ needs even when they are not aware of them or have not articulated them. We consistently go beyond the requirements speci-fied in clients’ requests for proposals,” says Grouvel.

What BNP Paribas offersOver the past two years, the Corporate and Transaction Banking Europe (CTBE) business - which operates the business centres resulting from the BNP Paribas/Fortis merger - has been working to ensure that a full

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suite of local products is available in each European market where the bank has expanded its presence. “We have mapped out the local instru-ments in each of these countries and our intention is to fill every gap,” says Grouvel. “We want clients to have access to a one-stop shop for all their European subsidiaries, wherever they are located.” This includes all domestic payments capabilities including tax or salary payments, physical instruments like cash and cheques or retailer acquiring at point of sales.

BNP Paribas has significantly invested in SEPA-readiness – further boosted by Fortis’ widely praised SEPA platform and value-added services acquired in the merger – but recognizes that servicing clients throughout the region still requires solid local capabilities to satisfy cur-rent demands resulting from the new approach. “We are extending our reach to lower segments of the market and are opening up our network to all clients from our domestic markets regardless of size,” says Grouvel.

As well as deepening its local capabilities, BNP Paribas has continued to invest in its Connexis Cash platform, which provides complete visibility and control over accounts worldwide and a full range of domestic and international cash services. It also gives access to BNP Paribas accounts and third-party bank information. “We’ve doubled the number of releases every year to improve functionality and are adapting Connexis to local languages, file formats and specifications,” says Grouvel. “It’s the perfect tool for clients present in several countries across the world.”

Clients have also gained from the merger of BNP Paribas’ and Fortis’ pooling and cash concentration capabilities, given the former’s strength in cash concentration and the latter’s strong notional pooling offering.

“Our corporate clients now benefit from a single homogeneous plat-form for worldwide cash pooling,” says Grouvel.

Servicing clients effectivelyBNP Paribas has a two-pronged approach to client servicing to ensure it fully meets their needs. “Our global servicing model has been harmo-nized across our entire network,” says Grouvel. BNP Paribas’ Cash Cus-tomer Service (CCS) based in Paris offers a dedicated single entry point to larger corporate clients or those with complex requirements. Further CCS platforms will shortly be opened in Belgium, Germany and the UK, so that clients can be serviced from a unique entry point in their home country to cover all their activities with BNP Paribas worldwide.

BNP Paribas also operates a Client Service Desk model on a country ba-sis (but with common standards and a centralized approach to ensure consistent, high standards) to service all other clients. “The standardiza-tion of our offering across countries enables us to better benchmark STP levels and help clients to streamline operations, reduce costs and increase transparency,” says Grouvel. As part of the bank’s commitment to improving efficiency, some non-STP, manually-processed tasks man-aged by country-based client service desks are now centralized in hubs in Portugal and Poland.

To help corporate clients to achieve their goal and to support them fur-ther, we organize each year a Cash Management University. In 2011, the

event attracted over 160 treasurers and CFOs from around the globe. This unique event gave them the opportunity to exchange views on key industry issues. This is just another example of the commitment we offer to our clients.

“Our deep capabilities in just about every country in Europe and across the globe are here to stay – this is a long-term business and we are in it for the long term”

Anne Dugied Deputy Head of Communication for Cash [email protected]

Marc Grouvel, Head of Cash Management, Corporate and Transaction Banking Europe, BNP Paribas

Financial supply chain reviewOver the past 12 months there has been a much greater alignment of procurement, logistics, and corporate treasury to optimize working capital management. Many financial supply chains are expanding their coverage from regional to global, increasing the funding support they require, which in some cases has proved beyond the capability of even the largest banks and, as a result, is now being provided by groups of banks. Automating the financial supply chain has also progressed and also appears to be becoming a collaborative exploit with solutions woven together from different networks and platforms, banks and third-party suppliers. By Jack and Wolfi Large

Procurement and treasuryManaging sourcing and procurement, globally or regionally, is vital to financial supply chain efficiency. In 2011 companies continued to focus on reducing the complexity, costs and working capital of their procurement processes and systems.

One way is to use an integrated procurement solution from a global logistic service supplier. Inventory management solutions offer a complete inbound supply chain service which includes the planning, supplier management, delivery, financing, replenishment and repair of inventory, with the logistics company usually owning the inventory and the client paying a monthly fee for the materials and services it provides.

Inventory management solution services are used by many industry sectors worldwide. The client specifies the suppliers to be used and the inventory levels. The logistics company manages the whole inbound supply chain process, including whether or not to offer the suppliers early payment terms in return for price discounts. Inventory manage-ment solution suppliers claim their services offer companies between 10% and 30% savings in total inventory costs due to reduced complex-ity, and savings in working capital and transaction processing.

Unfortunately, a focus aimed solely at optimizing inventory and pro-curement management can cause conflict between procurement and treasury departments. The core purpose of the treasury department is to manage cash flow while minimizing exposures to currency and liquidity risk, the primary objective of procurement to minimize the cost of materials and services, such as trade terms and conditions that the procurement department negotiates, might well actually increase the overall FX exposures and derivative costs. Another typical area of conflict is that automated procurement systems linked to online sup-pliers and the suppliers’ terms, including discounts for early payment,

can appear to demonstrate bulk-buying power and procurement efficiency but can create issues for treasury when the discount is less favourable than the company’s cost of working capital.

There is already considerable overlap between corporate treasury and procurement departments. It is just what they buy that varies, which is inevitably increasing as the supply chain becomes more automated. Both departments share the same processes and data in e-invoicing, payment cards, mobile payments and supply chain financing, and have similar reconciliation challenges. In most companies, merging the two departments would be impractical, but solutions need to be developed to optimize the working capital efficiency of companies’ overall supply chains.

JP Morgan’s financial supply chain experts are suggesting a new dis-cipline, Proceasury, is emerging, as shown in Figure 1, necessitating effective structures and allocation of responsibilities and account-ability. As Daniel Cotti, JP Morgan global trade executive, explains, “On the client side, we believe truly successful programmes happen because the companies have done their homework. They have decided that supply chain financing is right for them and they have worked out a detailed plan for implementing their programme. There is real CEO or CFO level sponsorship and true collaboration across departments and divisions – treasury and procurement, especially. Everybody involved is clear on their strategic objectives for working capital and how a supply chain financing programme can yield tangi-ble results to support those strategies.”

Financial supply chain platformsThere also seems to be a shift in the battle between the financial sup-ply chain platforms provided by banks, third parties, treasury systems suppliers and payment companies with considerably more flexibility in developing the complete solutions their clients require. Martin Knott,

“We are having to provide platform-agnostic, flexible client-focused financial supply chain solutions which integrate with whatever procurement and supply chain systems and services our clients have in place”

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Head of Trade, GTS EMEA at Bank of America Merrill Lynch is finding that “We have to provide platform agnostic, flexible client focused FSC solutions which integrate with whatever procurement and supply chain systems and services our clients have in place, so they can optimise the total working capital in their supply chains.”

Financial supply chain platforms are having to work together and ex-change data, as shown in Figure 2, to provide supply chain solutions. The flexible integration of bank platforms, third party platforms and logistic companies’ services plus the use of innovative techniques to finance trade is crucial to success and, as a result, it is now becoming possible to provide straight-through processing across the whole supply chain.

SunGard, a leading treasury management system supplier, have inte-grated their treasury management system with connectivity services, payment execution and collection services to develop a solution. As EVP of corporate solutions C J Wilmley explains, “We weave together all the different systems and data sources to improve financial supply chain efficiency.” Over the past year SunGard has found increasing willingness by all buyers, suppliers and service providers to develop integrated solutions.

The Syncada network – see Figure 3, a joint venture between Visa and US Bank, enables financial institutions to deliver standardized invoice processing and payment with integrated invoice financing to corporate and government clients. Syncada’s sponsor banks, including US Bank, Citi, Elavon and Commerce Bank, provide their clients with access to the financial supply chain network. Syncada uses the online platform de-veloped by US Bank and combines this with the Visa global multi-bank network. Syncada processed more than $21 billion in invoice payments in 2011, offering customer services in 17 languages and local payments in some 47 countries available in 13 currencies.

The importance of partnerships with other financial supply chain net-works is described by Amol Gupte, North America treasury and trade solutions head of global transaction services at Citi, “The Citi-Syncada partnership is an important part of our strategy to deliver ‘best-in-class’ solutions to our clients. Our award-winning supply chain finance platform and Syncada’s market-recognized expertise in this sector add another dimension to our trade finance and payment products.”

E-invoicing platforms are often the starting point for new financial sup-ply chain platforms. Basware, provider of a leading e-invoicing network, has just launched a B2B e-commerce ecosystem using its existing accounts payable process to create an electronic path from invoice to payment combined with accounts receivable management processes. Basware’s B2B Cloud application is an open, secure and global ecosys-tem for buyers and sellers which streamlines, optimizes and accelerates transaction collaboration, improving both purchasing and invoicing processes.

Financial supply chain automationMany initiatives to automate the financial supply chain are now under way, driven by governments, banks, supply chain providers and com-panies. The European Commission has set itself the objective that the majority of trades carried out within Europe be fully automated, fully ‘e’, by 2020 and has set up a European forum of stakeholders, interested parties and working groups in each country to ensure success.

E-invoicing providers in Europe have set up an e-invoicing providers’ association to promote e-invoicing, ensure standards are implemented and carry out inter-operability between e-invoicing networks. In Eu-

Figure 1 - J.P. Morgan’s Proceasury concept

Figure 2 - Exchange betweeen networks Figure 3 - Syncada network

Source: JPMorgan

Source: J&W Associates Source: SYNCADA from Visa

Payments in the pocketTechnology is changing the way people and companies make payments. A new mobile application from Barclays is set to break new ground

The payments landscape is evolving rapidly. Change is being driven by a number of different types of non-bank service providers – including large-scale collecting businesses such as utility firms, money service businesses (MSBs) and non-bank online organizations – which are seeking new ways to connect with consumers’ payment needs. “The payments market for consumers is moving rapidly with access to Faster Payments in the UK driving an expectation of immediacy of settlement. This has led to the widespread proliferation of smart phones and the rapidly increasing use of online stores for regular purchases, both of which are increasing access to goods and services,” says Mike Walters, head of UK corporate payments product management, Barclays.

Large-scale collecting or receipting businesses, such as utility companies and mobile phone providers, have long been enthusiastic users of direct debit payments, because of the control it gives them over the customer relationship. Increasingly, utility companies and other large, frequent billers have turned to online billing for customers to improve efficiency, lower operational costs and deliver value for money for consumers.

Now, utility companies and other large-scale collecting businesses have begun to introduce new technology, including mobile phone applications that give consumers greater visibility of their usage and bills and enhance ease of use. “This visibility demands that the settle-ments and the subsequent payments are just as streamlined and easy to use,” says Walters.

MSBs, such as Western Union and Travelex, have a long-established business model of facilitating cross-border remittances by consumers, using, for example, small neighbourhood stores to enable customers to make and receive funds. In recent years, these established players have been joined by numerous smaller MSBs.

Following the introduction of a requirement for MSBs to register with the Financial Services Authority (FSA) if they wish to send funds overseas, the market has rapidly consolidated. Now the focus of the business has shifted to finding new and easier ways for users to make and receive payments. Indeed, as Richard Martin, managing director, payments & cash management product, Barclays, comments: “In South Africa, for example, Barclays now enables customers to receive pay-

ments at ATM machines using a reference sent to their mobile phones in a text message”.

The final group of non-bank organizations driving change in the world of payments is online organizations. Over the past decade there have been many attempts to establish stores or representations of value that would allow consumers to earn and spend credits irrespec-tive of location – in either a closed or, increasingly, an open environ-ment. The most obvious of these online organizations are entities such as PayPal and Amazon, which facilitate online transactions.

However, more recent initiatives by Facebook and Bitcoin have seen digital currencies gain widespread acceptance and critical mass. Indeed, Facebook’s recent IPO prospectus valued Facebook Credits, a Facebook-only currency it sells to consumers to let them buy virtual goods in games like Zynga’s FarmVille, for example, at $560 million. Meanwhile, Bitcoin’s currency has made the leap to the real world: funds generated from games can now be withdrawn from some banks in the US.

What role can banks play?Banks play a central role in facilitating payments and emerging pay-ment methods are no exception, despite new players entering the market. “Over two thirds of the payments which Barclays processes on behalf of its corporate clients relate to corporate receipts from, or pay-ments to, their consumer and SME customers,” Walters confirms.

In the case of large-scale collecting or receipting businesses, banks provide the tools and mechanisms that make it straightforward for utility firms, for example, to interact with consumers.

For MSBs, banks play an important role in helping consumers access their offerings – the so-called first and last mile. By using bank infra-structure, certainty of payment can be assured and foreign exchange conversion can be swiftly and cheaply accommodated.

Banks can also play an enabling role for online organizations that fa-cilitate online purchases using real-world or internet-only currencies. Inevitably, value must enter or exit the online universe at some point: consequently banks, which continue to hold bank accounts for almost all online users, can intermediate this process and also work to find ways to make movements of funds as simple as possible, using mobile payments, for example.

A solution for our timeOne hurdle for users of all three types of non-bank payments is the need to input payment instructions, including card details, bank accounts or reference details, every time they make a bill payment, send a remittance or add to online funds. Although mobile wallets have been launched by some providers, surveys by polling company YouGov have shown that consumers want to be able to use funds in underlying bank accounts rather than store funds on a device. “Con-sumers are increasingly keen to manage the multiple stores of value they have within multiple wallets and vouchers and one way to do

Pingit: how it works• Users must be registered to receive payments.• Users must download and register via the app to be able to send

payments. Currently this functionality is only available to Barclays UK current account customers. A later version of the app will enable this functionality for current account customers of all other UK banks and building societies. Corporate registration processes will follow.

• The Barclays Pingit app works with Android 2.2 and above, iOS 4.2 and above, Blackberry OS 4.6 and above.

• Senders and recipients will be notified about sent, received, pending and cancelled payments with an SMS from Barclays.

• Barclays customers can view their account balance on the app, making it even easier to manage their spending.

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that is to ensure direct access to their main bank account, within any online payments environment,” explains Walters.

Barclays has recognized the paramount need for the payment process to be streamlined – and the importance of using funds from a bank account rather than separately stored on a device – and has launched a mobile application called Pingit that allows users to make clean, simple and safe payments.

Barclays Pingit is Europe’s first person-to-person service for sending and receiving money using mobile phone numbers. It allows users to

receive and send money, for free, to anyone with a UK current account and UK mobile phone number, simply by using that mobile number. There is no need to share bank details because the user’s mobile num-ber is linked to their current account.

To send money, customers can download and use the free Barclays Pin-git app, available on iOS, Android and Blackberry, or they can register online to receive payments. Money is sent using the Faster Payments Service – meaning payments are effectively in real time – and text mes-sages are sent to both the sender and the payee to confirm the transfer. Transfers are as safe as any other banking transaction and the app is protected by a five-digit passcode, set by the user.

Widespread applicationsPingit has been initially launched as a consumer application. At present only Barclays current account holders can send money. It is expected that Pingit will prove particularly popular for friends and family to send money to each other. Small clients of Barclays, such as sole traders like window cleaners or plumbers can also use Barclays Pingit, enabling their own customers to pay quickly, easily and securely.

A second release of the app, available soon, will enable non-Barclays current account customers with smart phones to register via the app and send money. UK current account customers of any bank can already register to receive payments with a UK mobile phone number at the Barclays website regardless of what type of mobile phone they use. Pingit will soon be rolled out beyond the consumer market to allow cor-

porate clients to receive and collect payments from consumer clients; for example enabling consumers to pay their utility and other bills via their mobile phones.

“For corporates, Pingit is attractive because it allows them to make im-mediate refunds. Moreover, receiving payments via Pingit is significantly less time-consuming for companies than being paid by cheque or cash because, like online banking, all payments have reference details at-tached, enabling straightforward reconciliation,” says Richard Martin. Indeed, Barclays is working with its clients to enhance reference infor-mation to improve reconciliation capabilities.

Antony Jenkins, chief executive, Barclays retail and business banking, said: “Barclays Pingit could revolutionize the way people send and receive money. For friends splitting the cost of dinner, repaying a bor-rowed £10 or people sending money to a son or daughter at university, it’s free, quick, convenient, secure and easy to use. You can send and receive money in seconds, without having to enter account details.

“We’re committed to making customers’ lives much easier, giving them more choice in how they manage their money, and Barclays Pingit absolutely does that. But it is not just Barclays customers who benefit, as it’s available to current account customers of all the other UK banks too. I’m sure we’ll soon be wondering what we did before it.”

Mike Walters, head of UK corporate payments product management, Barclays

Richard Martin, managing director, payments & cash management product, Barclays

“For corporates, Pingit is attractive because it allows them to make immediate refunds. Moreover, receiving payments via Pingit is significantly less time-consuming”

Barclayscash&[email protected]

rope, inter-operability between networks is growing rapidly, eg, OB10 now exchanges e-invoices with 30 providers, up from only six a year ago, as the awareness of the benefits of e-invoicing spreads globally.

There is also a greater understanding of the cost savings and improved service opportunities offered by e-invoicing. A major European com-pany has recently made an invoice status check available to its suppli-ers, enabling them to check the status of their invoices, whether they have been received and registered, require further processing, have failed the approval process and been rejected, have been approved or have been paid, and has seen a 60% reduction in calls to its payables call centre.

There is great competition between the networks, technologies and functionalities in financial supply chain automation. Ariba has devel-oped a smart invoicing processing which it claims reduces operating costs by some 70% and enables 98% of invoices to be processed untouched. Banks are beginning to integrate their trade and cash management back-office processes to automatically process files of invoices, choose FX rates, carry out sanction screening, determine whether they have sufficient liquidity to offer funding and make payments. The prices they charge for any new services developed are difficult to estimate, but they should at least be lower than they are at present. Unfortunately not many banks will be able to afford fully to de-velop straight-through processing for financing their corporate clients’ financial supply chains.

Asset-based financingIn the current financial crisis, asset-based finance has become one of the least difficult ways of raising finance. There are three types of asset-based financing: receivables or days sales outstanding; inventory or days inventory outstanding; and payables or days payables outstand-ing; all three have pros and cons as described in Table 1.

For many reasons, including the euro financial crisis and new banking controls such as Basel III and Frank-Dodd, world trade has become riskier and access to liquidity far less straightforward over the past few years, which is the probable cause of the slight decrease in the use of open account-based trading and the increase in the use of docu-mentary credits, including letters of credit. Avarina Miller, senior vice president at Demica, believes, “Trade receivables-based finance has long been a reliable source of funding that is attractive to borrowers and lenders alike and is set to remain an essential oil for the wheels of trade.”

Over the past few months asset-based financing has been growing rapidly worldwide, with facilities made available mainly to medium to small companies. The NYSE Euronext stock exchange has taken a minority stake in The Receivables Exchange in the US, which sells receivables directly to institutional investors in a real-time, competitive auction process (See Technology in Treasury Management Supplement 2011, page 48, for a full review). The NYSE aims to provide another outlet for public companies to borrow money, complementing the long-term funding provided by a stock-market listing. Since the official launch in September 2011, NYSE has been marketing the program to potential sellers, including NYSE listed companies. Paul De Domenico, head of global corporate receivables programs, NYSE Euronext, com-ments, “The reception of our issuer community to the new receivables program has been very positive. A solid pipeline of potential new sellers has been built. To date, TRE has signed on two new sellers in

the new corporate program and has completed the first corporate auctions.”

Supply chain financingSupply chain financing is receiving a whole new level of attention since the financial crisis. Buyer-backed supplier financing programmes are

Table 1 - Treasury automation

Financing Types

Supplier-Centric Buyer-Centric

Receivables (DSO) Inventory (DIO) Payables (DPO)

Financing Techniques Factoring Invoice Discounting Invoice Securitization Distributor Finance

Inventory Finance Extended payables funding Supply Chain Finance/Reverse Factoring

Features Convert future payments into immediate cash Match funding with sales Predictable

Matches funding to sales, cycles and maturities

Extend supplier terms combined sup-plier finance for early payment Collaborative

Risk Debtor payment risk Fraud

Stock held Single debtor payment risk

Financing Types Supplier-Centric Buyer-Centric Receivables (DSO) Inventory (DIO) Payables (DPO)Financing techniques l Factoring l Inventory Finance l Extended payables funding l Invoice Discounting l Supply Chain Finance / l Invoice Securitization Reverse Factoring l Distributor Finance Features l Convert future payments l Matches funding to sales, l Extend supplier terms into immediate cash cycles and maturities supplier finance for early l Match funding with sales combined payment l Predictable l CollaborativeRisk l Debtor payment risk l Stock held l Single debtor payment risk l Fraud

Source © 2012 J&W Associates & Demica

“A focus aimed solely at optimizing inventory and procurement management can cause conflict between procurement and treasury departments”

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not only helping purchasing companies manage their own working capital management but also helping sustain the continued survival of their suppliers in a volatile economic environment.

As a result of current economic conditions, many large multinational manufacturers are focusing on improving cash flow by making their payment terms more consistent, and supporting new payment terms to suppliers by providing working capital and financing through bank-sponsored supply chain finance programmes. JP Morgan is supporting more than 50 such programmes around the world. A global programme launched with JP Morgan in 2010 is now serving buyers and suppliers in 10 countries, with hundreds of sup-pliers enrolled so far. More consistent payment terms and the supply

chain financing implementation have resulted in millions of dollars in cash flow benefit for the client across multiple divisions, with the supply chain financing programme serving as a valued option for suppliers to manage their cash flow requirements. As rollout contin-ues across the globe in 2012, suppliers in Asia and Latin America will be added. Suppliers enrolled in the program have more control of their receivables collection, have improved days sales outstanding, and have the cash flow they need to fund growth.

For a supply chain financing programme to succeed it needs to provide benefits for both the buyer company and the supplier. EDF, the French power group, worked with BNP Paribas to provide a supply chain financing programme for its key suppliers. EDF has not extended its payment terms and offer its suppliers full flexibil-ity on whether they make use of the early payment option or not. Suppliers opting to take early payment usually receive it within 48 hours. Frédéric Clauss, managing director of Sondages, Ausculta-tion & Maintenance, a small and vital EDF supplier which has been taking advantage of the programme since it began, explains, “The supply chain financing programme has been an important source of cash at market rates when we need it. The key advantages of

the programme are its simplicity, the very short response time to receive the cash, and there is no need to change our daily banking arrangements.”

New servicesNew supply chain financing services are coming to market all the time. Standard dynamic discounting services for early payment have been available on some of the major e-invoicing platforms for some time. OB10, the global e-invoicing network, will launch an, as yet unnamed, innovative financing service in mid 2012 that offers a couple of important new features, see Figure 4. When roll-out is complete, all the suppliers on the OB10 network will have the option to take early payment for any of their outstanding, approved invoices. This is very different to current practice supply chain financing which, mainly due to the complexity of setting up the arrangements, is a buyer initiated service and typically limited to higher value or volume transactions with a small number of stra-tegic suppliers. The OB10 service is supplier initiated and available to all, regardless of the size of the company or its funding require-ments. Early payment is optional. Suppliers opting to be paid before their scheduled payment date can elect to take it for all their outstanding invoices, a selection of invoices or a single invoice, as soon as the invoices have been approved. Early payment is made within two to three days.

Another important feature of the new service is that buyers can

choose whether to take advantage of their company’s financial po-sition and fund the early payment from their own working capital or use financial institution funding. The service will be relatively easy to implement as OB10 already has contractual relationships with all the suppliers on its network so only an update to their contracts will be required to allow access to the early payment functionality. Stefan Foryszewski, senior vice president at OB10, believes, “This is a breakthrough service. It is the first to give all suppliers access to early payment regardless of invoice value or company size, and also provide buyers with a flexible facility to choose whether to fund the early payment or not.”

FutureThe financial supply chain market is maturing. Complete financial supply chain solutions are being created collaboratively as the banks, the financial supply chain platforms and other suppliers learn to work together to provide the services their corporate clients require. New financing services are becoming available to all suppliers for the first time as buyers and sellers also learn to work together to ensure their mutual success. Collaboration is the name of the game.

Figure 4 - OB10 Supply chain finance service

Source: OB10

“For a supply chain financing programme to succeed it needs to provide benefits for both the buyer company and the supplier”

Benefit from Germany’s leader in Cash ManagementEuromoney survey confirms Commerzbank as Number 1

Corporate Banking

Efficient Cash Management is a major factor for every company. For this reason,choosing the right partner is essential. And as the latest survey in October’s issueof Euromoney magazine shows, Commerzbank is the best partner in Germany. More than 16,000 finance professionals from over 110 countries participated in thesurvey. The result confirms the previous year’s rankings, where Commerzbank wasalso voted Number 1.

The conclusion is clear. For individually tailored, effective Cash Management solutions, you cannot do better than to choose Commerzbank as your partner. Our Cash Management is and remains the best.

www.commerzbank.com/corporates

Achieving more together

Best Domestic Cash Manager Germany

Commerzbank

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