This year, we have honorees across a range of product areas that all aim to either help make their clients’ lives easier or make it easier for the banks themselves to foster innovation. From cash management to payments to FX, this year’s innovators cross the gamut of transaction services.

Application programming interfaces (APIs) are a big buzzword in transaction services this year—driven in part by the push for open banking standards and changes under the EU’s Payment Services Directive 2—and a number of our nominations were for API-based solutions. An API is a set of routines, protocols and tools for building software applications that specifies how software components should interact. Basically, it is a plug-and-play interface between systems.

In Europe, banks will need to satisfy requirements under the PSD2 that they open their data to third-party providers, and APIs can enable that process. This is the push, but the reward is to develop solutions that are more reactive and can come faster to market, with easier access and greater transparency for clients.

Citi | CitiConnect API
Product Innovation

The CitiConnect API allows a company’s treasury workstation or enterprise resource planning (ERP) system to be integrated directly with its bank’s platforms and solutions via API. It makes it easier for companies to “develop interfaces with Citi to initiate payments, collect payment statuses and check account balances,” the bank says. The API technology is also integrated across Citi’s 96-country footprint. According to the bank, it is one of the first transaction banks to enable its full, global footprint through API for cash management.

“Establishing integration between corporate clients and their banks can be a costly, complex and time-consuming affair. In many cases additional providers, including service bureaus and file-transfer platforms, need to be leveraged by the client,” Citi says. As a result, both corporate clients and banks are continuously looking to simplify the integration process to exchange payment instructions.

The bank had used an API for integration on the consumer side, and Citi’s Treasury and Trade Solutions (TTS) business leveraged that infrastructure, technology and experience to accelerate development processes for TTS. Development of the CitiConnect API took nine months, and it came about as a result of input from customers seeking a direct-integration solution using API.

Danske Bank | DynamicPay
Product Innovation

DynamicPay takes a much-used solution—reverse factoring—and puts it in the hands of smaller suppliers, with rapid onboarding and allowing them to drive

the decision-making about how, when and with whom to engage in dynamic discounting. The reverse-factoring process involves a bank’s committing to pay a company’s invoices to suppliers at an accelerated rate in exchange for a discount.

Conventional programs usually capture only a buyer’s top tier of suppliers, leaving out smaller suppliers as a result of the onerous onboarding, documentation and regulatory reporting processes. DynamicPay, however, “provides an alternative solution that has similar characteristics but enables simple and speedy onboarding of the entire supply chain, while enabling all suppliers access to early payment of an invoice against a dynamic discount,” the bank says.

It is innovative in that it is bank-independent (the supplier does not need to be a customer of Danske Bank), and it automates the cash discount process: The system uses the existing payment file and, based on the buyer’s bank payment instruction file, calculates a dynamic discount on behalf of the buyer. It then ensures the required funding is available and presents the early payment offer to the supplier.

DynamicPay does not require a long KYC (know your customer) process. “Onboarding is done online and in one process without the involvement of the buyer,” notes Danske. Finally, it is a global solution: Suppliers can originate anywhere in the world.

DenizBank | Competitive Idea Playground
Product & Process Innovation

The Competitive Idea Playground is a gamification-supported app to encourage employee innovation, with “Solution Tournaments” to build consensus around new innovations. What this means is that DenizBank has set up a tournament structure internally, where employees compete to create the most innovative new ideas and solutions, and the employees themselves vote on which solution is the most innovative. In addition, the whole process is run through a platform that also acts as a social environment for idea sharing.

It provides a gamification platform where each user gains points (for rewards) upon entering a solution, making a comment on or liking the other solutions, joining a tournament or voting on a tournament.

IGTB | Ripple-Backed Payments Solution
Product Innovation

iGTB’s blockchain-based payments solutions provide faster, more secure payments between partner banks. The Ripple-backed solution is a unique addition to the Payment Services Hub of parent company Intellect Design Arena. iGTB has completed proof-of-concept testing with a client-bank, using a single currency for the testing phase. Banks using its hub can take advantage of Payments Solution to eliminate delay in confirming receipts for payment processing, integrate messaging and settlement processes, reduce error rates in pretransaction communication and lower settlement risk with real-time payment tracking. This iGTB payments solution provides transaction visibility for exception handling and reduces processing costs versus traditional correspondent banking arrangements. Because it is connected to the Ripple network, it also lets users take advantage of real-time FX quotes from network market participants.

ING | Virtual Cash Management
Product Innovation

Virtual Cash Management (VCM) from ING takes two solutions, virtual bank accounts and Virtual Ledger Accounts, and combines them into the integrated

VCM solution that allows companies to keep the benefits of local accounts—including local international bank account numbers (IBANs)—while having centralized oversight of funds and reducing administrative costs. It does not require highly sophisticated technology solutions to be in place within treasury, so it can benefit a wide range of companies and opens up the possibility of using tools that generally have a high barrier to entry in terms of technology and budget—such as on-behalf-of structures. Says the bank, “Through the enhanced reporting capabilities of VCM, and its invoice-matching engine, treasurers can also concentrate on optimizing the company’s working capital position by streamlining order-to-cash and purchase-to-pay processes.”

Although each virtual bank account has a virtual bank account number that conforms to the local IBAN, it is unfunded. Transactions are initiated or received in the master account. A Virtual Ledger Account is a “multibank reporting dashboard” that acts as a fully functioning alternative to treasury management and ERP systems. It is basically an administrative subaccount for treasury to allocate cash without segregating it physically.

Invapay | Card-Based API Payments Solution
Product Innovation

Invapay’s card-based solution takes advantage of the delayed-payment facility in payment-card schemes to let buyers extend their days payable outstanding while paying their suppliers within a few days, and it opens up the use of supplier card payments where previously they were not feasible. The solution integrates with a buyer’s existing ERP systems through a simple payment API to deliver a secure, data-rich automated payment solution, with suppliers paid via electronic funds transfer.

It has also integrated World First’s foreign exchange API to provide users with real-time FX visibility across multiple currencies, and with the cash and treasury optimization features of its existing platform—and enhanced transaction data— this ultimately offers greater control and a highly flexible payments solution. It supports p-cards, debit cards, business cards, supply chain finance, trade finance and working capital accounts. It is Cloud based and can be set live in just 24 hours.

Mashreq | Cardless Cash Withdrawal Using Internet Banking
Product Innovation

Mashreq’s cardless cash withdrawal solution enables corporate customers or their beneficiaries to withdraw cash from Mashreq Bank ATMs without the use of

a card, via the Online Banking portal. With this solution, a withdrawal transaction is initiated via the portal and, once approved, a code is sent to the beneficiary’s mobile. That code is entered at any Mashreq Bank ATM—in any of the countries in which it operates—and cash is dispensed. This is a unique solution for corporations, allowing a central corporate treasury team to seamlessly support the immediate cash requirements of international branch offices.

Nordea | AutoFX
Product Innovation

AutoFX integrates best-of-breed hedging strategies with advanced data insights to accurately forecast exposures and automate the transfer of currency balances and related FX conversions. It enables customers to enter instructions on how foreign currency exposures should be handled, and the system automatically monitors accounts and executes orders. As a result, the bank says, “accounts can be swept to reduce excess balances or, alternatively, topped up to eliminate negative balances,” all on an automated basis. It helps facilitate automated hedging and interest optimization strategies.

“It also helps in automating cash flow and liquidity management; so if a customer has flows in multiple currencies, Liquidity Management automates the execution of overnight FX swaps.” This can eliminate negative balances in foreign currency accounts and minimize overdraft interest payments. The system is integrated to a client’s enterprise systems via Nordea’s REST API. After an 18-month pilot phase, AutoFX was launched in February. 

The Innovators 2017 is Global Finance’s fourth annual list of the most innovative new financing solutions and deals covering corporate finance, foreign

exchange, trade finance, transaction services and Islamic finance. To find the Innovators 2017, our editorial team assessed and then chose those who made the most trailblazing differences or biggest milestones in their respective fields.

For the Corporate Finance Innovators we looked at companies that have pulled off innovative financing deals, with either equity or debt capital, that create value for the firm through investing in certain projects while maximizing shareholder value.

In addition to multinationals celebrated for undertaking innovative corporate finance deals, we also mention the banks and advisors involved who helped make them happen.

For the Foreign Exchange Innovators we looked at the foreign exchange banks and services firms that devised breakthrough products and enhanced services that  are transforming how companies implement complex FX strategies and limit currency risk.

Automation, software and technology have made forex an area ripe for fintech disruption, and our list of innovators shows that this trend continues.

Transparency and trust are key concerns of our Trade Finance Innovators, as distributed ledgers become a key area of innovation. With its promise of immutability, blockchain is capturing the attention of fintechs, banks and others involved in trade transactions. The speed with which blockchain innovators are moving from proof of concept to production, moreover, shows the benefits it will bring to a digitized supply chain that crosses borders and industries.

Our Transaction Services Innovators are providing the most up-to-date and complete business intelligence to their clients—enabling them to make the best possible strategic decisions. Being able to know where cash is at any given time is a boon to modern treasury departments, as is the need to automate treasury functions, so technology is key to how banks deliver both cash and treasury management solutions.

Finally, our Islamic Finance Innovators include both finance and tech innovations that improve infrastructure, banking and finance solutions for Islamic finance institutions and their customers. Embracing new technology has been a key reason behind the growth of Islamic finance and a valuable source of alternative finance for Islamic businesses.

METHODOLOGY

Featuring global companies, technology providers and financial institutions, our honorees were assessed and chosen by Global Finance editorial staff having received submissions from financial institutions, nominating either themselves, a client or a partner firm. This year’s submissions came from banks, financial institutions and technology providers from around the globe, which formed the backbone of our research into the groundbreaking organizations that are disrupting the marketplace and engendering new solutions in their sectors. Nominations were for either a Product or a Process Innovation, as defined by the OECD’s Oslo Manual of Innovation. Product Innovation applies to a good or service that is new or significantly improved. “Significantly improved” means a groundbreaking change was made to the product. Process Innovation applies to a new or significantly improved method of production or delivery. In both cases, the change needed to have been made, or new product launched, within the last year. Submittors were asked to specify why the nomination was new and innovative and how it solved a problem for the firm or its clients, as well as describe its origin or inspiration and the process from conception to product launch. Finally, applicants were asked how internal resources are allocated to encourage innovation.

This year’s submissions came from banks, financial institutions and technology providers from around the globe, which formed the backbone of our research into the groundbreaking organizations that are disrupting the marketplace and engendering new solutions in their sectors.

Nominations were for either a Product or a Process Innovation, as defined by
the OECD’s Oslo Manual of Innovation. Product Innovation applies to a good or service that is new or significantly improved. “Significantly improved” means a groundbreaking change was made to the product.

Process Innovation applies to a new or significantly improved method of production or delivery. In both cases, the change needed to have been made, or new product launched, within the last year.

Submittors were asked to specify why the nomination was new and innovative and how it solved a problem for the firm or its clients, as well as describe its origin or inspiration and the process from conception to product launch. Finally, applicants were asked how internal resources are allocated to encourage innovation.

Global Finance:  How is your FX hedging solution unique?
Nils Waldmann:  AutoFX automates the entire process chains of foreign exchange risk and liquidity management that normally require high-level attention and manual work in treasury departments. With Auto FX, three to four manual steps, perhaps across different banking systems, have been reduced to straight-through processing via a rules-based automated setup. AutoFX has disrupted the traditional treasury setup through automated efficiency and reduction of the need for trading platforms and functionalities that may have been provided by treasury management system providers.

GF:  How did the idea for AutoFX evolve?
Waldmann:  The inspiration for AutoFX came from a customer asking us to take over their FX handling on a daily basis. As this was neither legally compliant nor possible for us as a bank to execute manually on behalf of the customer, we were inspired to build a rules-based solution that would take care of it. As the customer said, “You have all the information about our accounts in your systems, so surely you can build a solution around it to do the actual trades that it takes.” They were right, so we did!

GF: What were the key challenges to creating this solution?
Waldmann:  As with all projects, it was difficult to secure funding. Often, new services also challenge your own organization and existing business, so the combination of those elements was tough to overcome.

Developing new products in the banking industry is often a long, bureaucratic process with lots of internal stakeholders. It is also a process that can choke creativity and innovation. At the very least, it often prolongs the crucial time to market. With AutoFX, we developed a prototype with a group of pilot customers on a small scale, which allowed ample customer feedback and quick adjustments along the way. Only once we knew we were on the right track was the prototype “bankified,” and put through the normal product-development process. Following the customer inspiration detailed above, we called an internal brainstorming meeting. Soon after, we produced a sketch and called in the customer to get feedback. Already, we were confident enough to build our first prototype and begin testing with dummy trades. We could see immediately that this was a solution that could really deliver value to our customers in general, so that also drove us on to develop the optimal solution.

GF: How has this inspired future projects?
Waldmann:  AutoFX showed the power of working across internal units, as Nordea Cash Management and Nordea Markets combined to deliver the best solution. This joining of strengths internally requires a new, agile culture for large organizations—but thankfully this is supported at unit and group level at Nordea. We have introduced initiatives and ways of working that mean we can work directly with customers and new entrants. It is a new era, where banks like Nordea have to compete or work with fintechs that are smaller, more agile and idea-rich, with short times to market. Nordea is adopting some of this culture and more agile ways of working so we can be an ideal partner for third parties and customers. [Our] Transaction Banking [team] is a leader in developing Nordea’s strategy and products with the aim of staying competitive and crucial in the future payment ecosystem. This object has been borne out through initiatives, such as the specially formed Innovation Lab, with responsibility for fintech collaboration and initiatives around PSD2 and other areas

“As anyone who has worked in Africa will know,” explains Sachin Shah, head of cash management products, transactional products and services at Standard Bank, which won Best Overall Bank for Cash Management in Africa in this year’s awards, “one of the key requirements is to be able to understand and navigate a rapidly changing landscape from an interest [rate], exchange [rate] and other benchmark perspective.” Shah says African companies are more prepared to deal with volatility than companies in more-mature, stable economies.

The World Bank predicted lower levels of growth in Sub-Saharan Africa in 2016, with growth falling from 3% in 2015 to 1.6% in 2016. Growth has suffered—in part due to lower prices for resources and commodities—but there is still optimism that growth will remain higher than levels seen in other regions, says Shah. “The drive to diversify dependency away from resource-heavy sectors into the consumer, infrastructure and manufacturing sectors continues across the continent,” he notes, “and will set markets up for improved growth rates as the resource environment improves.”

Volatility and regulatory uncertainty play a role, but not all key developments in the region are negative, says Shah. “With the advent of increased innovation, we continue to work with our clients to evolve their approach to payments and collections, with a view to both reaching more clients and [reducing] their working-capital cycle.” Shah points to digitization, disruption and innovation as key themes that will resonate across most regions this year.

The development of regulations surrounding foreign currency payments and “trapped cash” present a challenge for fully harmonized, regional treasury centers; but “there are some opportunities emerging that will [ultimately] contribute to improved payments outsourcing and processing,” says Shah. “On a positive note, East Africa continues to be one of the regions at the forefront of driving the adoption of electronic and alternative payments mechanisms.”

Mobile payments and collections are a key driver for change in Africa, as companies “positively disrupt their own value chains within a region where more people have mobile wallets compared to bank accounts,” notes Shah. “This enables access to more clients for [the companies’] own products and services, as well as improvements to their working-capital cycles through direct client engagement.”

In conjunction with this payments revolution, African companies are increasingly taking advantage of improved infrastructure to set up shared service centers, and they are making better use of data to improve treasury visibility and forecasting.

“Concerted efforts and partnerships between the public and private sectors in these markets continue to diversify growth into new sectors, sustain job creation and spur the growth of small and medium-size enterprises, which is encouraging,” says Shah.

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AFRICA

Best Overall Bank for Cash Management

Standard Bank

Standard Bank has been around for 152 years and has a presence in 20 countries in Africa. It is a leading pan-African bank supporting intra-African trade and the global and regional cash management needs of corporate clients. Its Business Online digital banking portal offers ease-of-use with such features as single sign-on and multibank account management and reporting. On the working capital front, the bank has “created a dedicated team in South Africa which conducts in-depth analysis into the working capital cycles” of clients, says the bank, along with benchmarking and analysis of how process reengineering can enhance working capital management.

It is one of few banks with the ability to help multinational clients with regional liquidity management solutions for markets such as Mozambique, Nigeria and Angola. The bank’s Global Liquidity Management System allows corporate clients to “view and manage their cash management schemes with Standard Bank on a real-time basis, allowing treasurers to optimally manage intraday liquidity risk, in addition to optimizing overnight cash working capital interest yields.” Companies can thus take advantage of real-time cash pooling services combined with real-time consolidated balance reporting.

Best Bank for Liquidity Management

Standard Chartered

Standard Chartered is in the midst of a $2.9 billion investment to 2018. Our ‘Here for Africa’ campaign further demonstrates our commitment to the region. It has a direct presence in 15 countries in the region.The bank offers corporate clients with optimized solutions for liquidity management, such as true end-of-day cross-border sweeps offering same-day value. It can provide multi-currency, multi-entity global interest optimization, and automated options on surplus and overnight cash for yield enhancement.

Standard Chartered also offers best-of-breed digital solutions for optimizing liquidity management, such as Straight2Bank Liquidity—a global liquidity platform that provides companies with greater visibility of global liquidity, along with improved control and operational efficiency.

Best Bank for Payments and Collections

Ecobank

Ecobank has the largest pan-African corporate banking network of any bank, along with a strong local presence in the markets where it operates. It offers a comprehensive payables management solution—Ecobank OMNI—to enhance payment processes and improve controls. It also boasts the largest banking network in Africa. The bank is in the midst of rolling out Ecobank Masterpass QR, a mobile payment solution that it expects to have live in 33 countries by 2020.

The bank offers custom collections management offerings, tied to its digital receivables management solutions. As an example, when a major Nigerian telecoms company wanted to integrate its point-of-sale and bank branch collections into its ERP system, Ecobank delivered. Notes the bank: “The objective was to allow their field sales representatives who collect cash from customers to easily deposit the cash into the company’s account with amounts deposited updating their ERP system for easy reconciliation.”

Best Provider of Short-Term Investments/ Money Market Funds

STANLIB

While the investment manager is rooted in the history of Standard Bank, which was founded in 1862, the current iteration of STANLIB began life in 2002—the amalgamation of seven different asset and investment management holdings of Standard Bank and Liberty Life. STANLIB has boots on the ground in 10 African countries, with over R586 billion in asset under management.

The asset manager offers a range of investment options, including the STANLIB money market fund.

STANLIB’s Cash Management team seeks out products “that could maximize clients’ short-term cash returns and aims to offer liquidity,” says the firm. “Fixed-interest portfolios are made up of varying investments in the bond, money market and other income securities. These portfolios aim to provide interest income over the short- to medium-term.”

Best Bank for Working Capital Optimization

Standard Chartered

Standard Chartered has been growing extensively in the major markets of the region, and investing heavily in solutions that fit this diverse marketplace. It offers market-specific receivables discounting and supplier finance solutions and is one of the world’s best providers of tailored trade finance solutions—all of which help clients to most effectively optimize liquidity.

In addition, the bank stands our for its ability to design and implement unique solutions for specific corporate problems. As an example, the bank was mandated to set up a multi-market cash management solution to improve efficiency for a mobile infrastructure provider, enabling “automated transaction initiation and information flows through SWIFT, Onsite Cheque Printing and Local Bank Cheque leading to maximization of ROI and ERP investments,” said the bank. The solution provided full visibility of account and transaction initiation across markets, 24/7 centralized check disbursement, increased control of cash disbursement and allowed the company to benefit from optimized yield, via the bank’s liquidity management solution.

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Tax and regulatory regimes are many and varied in the countries that make up the Asia-Pacific region. With multiple currencies and diverse macroeconomic outlooks, disparate banking systems and inconsistent technological and physical infrastructure, managing cash and liquidity across the region can be challenging at best.

One of the key concerns for corporate treasurers is staying on top of changing domestic regulation. China has once again enacted measures to restrict capital outflows—creating fears that it may retreat on promises to liberalize its currency and cross-border investment.

In April last year, the National Payments Corporation of India introduced the Unified Payment Interface for speedier person-to-person and e-commerce transactions and for compliance with know-your-customer regulations.

Other regulations that are impacting companies in Asia include the Bank for International Settlements’ Basel III capital-reserve requirements. Banks in Asia are well positioned to meet the standards, as many jurisdictions have more-stringent capital
restrictions in place than those stipulated under Basel III.

Other key concerns for Asian corporate treasurers are geopolitical in nature, such as the territorial disputes in the South China Sea, for example.

There is uncertainty surrounding Asia’s trading relationship with the United States—particularly trade ties with China—and how it is likely to change under the new Donald Trump administration. Although a great deal of rhetoric suggests Trump could enact trade barriers and import taxes, how that plays out remains to be seen.

President Trump has pulled the United States out of the proposed Trans-Pacific Partnership, which would have given preferential trade treatment to signing members in the Asia-Pacific region—including countries such as Australia, Japan, New Zealand, Singapore and Vietnam.

On the other hand, corporate treasurers continue to benefit from the fast pace of digitization and technological advancement across the region.

Companies ranging from small and medium-size enterprises up to the largest blue-chips are anxious to go digital-first with banking partners. And regulators—particularly in Hong Kong and Singapore—are driving this trend by pushing companies away from a check culture toward electronic payments and digital money.

As is the case elsewhere, transaction banks in the region need to work with the best and brightest financial-technology companies to deliver the high-end solutions their clients are looking for to improve customer interaction, increase data availability and ensure the safety and security of their data. 

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ASIA-PACIFIC

Best Overall Bank for Cash Management

DBS

DBS has been rapidly expanding its treasury and cash management offering and market share in the region in recent years. The bank has embraced digital solutions and launched a number of new offerings that are tailored to specific markets in the region. For example, DBS launched enhanced online tax payment functionality on its IDEAL platform–for Indonesian clients; automated clearing house (ACH) services in Taiwan; NACH solutions in India; and an On-Demand Domestic Sweeping service in China, which allows clients to initiate multiple intraday sweeps between entities for urgent settlement. In addition, DBS PriorityPay provides instant cross-border transfers within Asia.

The bank saw its transaction services business grow significantly in 2016, and record growth is on track for the coming year, as well.

Best Bank for Liquidity Management

China Construction Bank

China Construction Bank has focused on increasing investment in digital banking solutions for enterprise clients and has invested heavily in its cash and treasury management suite. That investment is paying off, as the banks boasts increasing numbers of cash management customers—and increasing market share.

Managing liquidity in Asia is hardly a simple thing. It is a region of disparate regulatory and currency regimes, from fully- liberalized markets to very restricted ones. But digital banking solutions are being launched to increase cash visibility, which is a first step to improving liquidity management. For trapped liquidity, banks are making use of tailored solutions, such as intercompany transfers, dividend payments and interest optimization,  to move liquidity.

China Construction Bank provides corporate clients with access to a wide range of solutions to deal with the complexities of the market, including interbank lending and borrowing, repos and reverse repos, and interbank deposits.

Best Bank for Payments and Collections

ICBC

ICBC online banking platform offers a “single point entry for global cash management in different currencies, languages, countries across different time zones and banks worldwide,” notes the bank.

On the payments and cash management front, the bank has been investing heavily in its solutions for global account management, collections and disbursement and liquidity solutions, such as cash pooling. One key plank is the bank’s multicurrency centralized collection and disbursement offering, which supports data flows between ICBC accounts, between accounts of ICBC and third parties—and between accounts at third parties.

Best Provider of Short-Term Investments/ Money Market Funds

JP Morgan Asset Management

With decades on the ground in key markets in this region, few banks have the deep local roots and global reach of J.P. Morgan. It offers access to a range of short-term liquidity and investing solutions covering the gamut from money market funds to short-duration funds and commercial paper, along with Treasury securities and other offerings.

J.P. Morgan’s Asset Management arm is one of the leading bank-owned providers of investment solutions to corporate clients in the region. It has global assets under management of $1.7 trillion, and the banking group has a CET1 ration of 12.4%.

Best Bank for Working Capital Optimization

Standard Chartered

Standard Chartered boasts more than 6,000 corporate clients in the Asia-Pacific region. It takes a client-specific approach to working capital optimization that stands out. The bank works closely with clients to solve working capital problems is ways that are specific to each market and company.

At the same time, Standard Chartered offers market-leading global solutions, such as working capital analytics tools to improve cash-flow forecasting. It also offers a virtual account solution for collections and payments, to centralize funds and improve intraday working capital management. And of course, the bank is perhaps best known for its wide-ranging and tailored trade and financial supply chain solutions, which are structured to help companies improve working capital efficiency.

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As economic fundamentals deteriorated in the region—in 2016, GDP growth fell to 2.9% from 2015’s 3.6%, says Focus Economics—and the political will for economic reforms ebbed, companies were retrenching and banks were refocusing their assets in key markets in the region.

With some western banks retreating from Eastern European markets in recent years, corporate treasurers have had to focus on efficiency gains to ensure liquidity and access to working capital.

At the same time, treasurers in CEE are struggling with some of the same issues that their global counterparts are facing—including the need to define and manage risks involving the rapid pace of technological advances and to learn how best to make use of those advances.

To manage liquidity more effectively, corporate executives need to access higher volumes of data to unlock cash, says Dick Oskam, global head of transaction services sales at ING, which won Best Bank for Payments and Collections in CEE in this year’s awards. “Some of the areas that can most benefit from data analytics are liquidity and cash management, trade finance and risk management,” he explains. Oskam notes that data engineers are using the latest statistical models, machine learning, text analysis and other advanced techniques to study large amounts of data and explore applications.

“There are a myriad of opportunities and applications for data analysis,” says Oskam. “The challenge lies in unlocking the right data and getting the information you need from huge data pools. We are working hard to make data accessible for new analytical techniques—and together with our clients, starting to explore use cases to unlock value with data engineering.”

Oskam says two major issues that concern corporate treasury executives in the region are cybersecurity and data analytics. “There is no doubting the scale of [the cybersecurity] challenge and the importance of industry collaboration. It’s of concern for ING, for our clients, and in our personal lives.” Oskam says that recent cyberattacks have shown that investment and wholesale banks are much bigger targets than retail banks, as they handle larger-value transactions.

“Increased accessibility to knowledge on how to breach cyberdefenses is fueling the volume of attacks,” says Oskam. “At the same time, exploits such as zero-day vulnerabilities, malware on mobile [devices] and botnets using connected devices continue to cause significant damage.”

Corporate treasurers in the region are keenly aware not just of cyber risks, but also of the business and macro risks that they face—from rising instability in Ukraine and Russia to the trade impact of Brexit. In fact, some analysts have suggested that economies in CEE could feel the greatest effect from Brexit. Analysts at Focus Economics note regarding Brexit: “Waves of contagion are expected to hit CEE through trade, investment and financial challenges. Lower confidence will impact investment and trade will suffer due to the expected slowdown in the eurozone.”

And through it all, treasurers in the region continue to focus on managing cash, understanding the impact of regulatory change and ensuring the availability of both long and short-term liquidity. 

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CENTRAL & EASTERN EUROPE

Best Overall Bank for Cash Management

Commerzbank

Commerzbank has a footprint on the ground in most countries in the region, backed by global cash management solutions. Global Payment Plus, the bank’s online multibanking application, provides global visibility of accounts and transactions, and its corporate mobile app offers best-of-breed functionality and services, including multibank visibility of accounts.

The bank has increased corporate lending by 12% since 2013 and holds a significant share of the trade finance market in the region and is a global leader in export finance. Its working capital solutions help companies benefit from faster flow of funds and increased transparency in the trade cycle.

Commerzbank has a CET1 ration of 13.6%, or fully loaded CET1 ratio of  11.8%.

Best Bank for Liquidity Management

UniCredit

UniCredit has one of the largest regional footprints in CEE, with an on-the-ground presence in 14 countries. It is a top-five bank in most of these markets. The bank provides multibank cash pooling across the region and offers both zero balancing and target-balancing pooling structures. UniCredit stands out for both its regional and its local-market solutions. For example, UniCredit Bulbank, based in Bulgaria, offers not just cash pooling and liquidity and interest optimization solutions, but also physical cash collection services across the country. In Romania, the bank offers zero-balance, target-balance and reverse-balance cash sweeps along with domestic and regional cash pooling. In Hungary, the bank offers cash pooling, along with a product called EuropeanGate, which is a multibank digital banking solution connecting accounts across CEE.

Best Bank for Payments and Collections

ING

ING has a presence on the ground in all of the major markets of Central and Eastern Europe, and has been in most markets consistently for 20 years or more. It offers domestic and multinational corporates a full suite of solutions to supports their treasury and financing needs.

The past year saw the further development and roll-out of ING’s digital banking platform, InsideBusiness, which offers clients a single point of access to the bank’s products and services—including payments and collections, e-banking, financial markets and lending. Last year, the bank launched a single sign-on for all payment services.

But the biggest development in recent years is the ING Virtual Cash Management solution. VCM is a multibank self-service portal to manage group cash, which enables corporate in-house banks to provide both payments-on-behalf-of (POBO) and true collections-on-behalf-of (COBO) for subsidiaries.

The bank also holds annual internal ‘innovation bootcamps,’ during which the best 100 ideas put forward by ING employees are presented, and winners receive a budget to develop and implement their idea.

Best Provider of Short-Term Investments/ Money Market Funds

Deutsche Bank Group

With a longtime presence in the region, along with its European and global solutions, Deutsche Bank is well positioned to meet the investment management needs of both local companies and multinationals.

Given the diverse markets and local banking systems, changing regulatory structures—plus the current investing climate—managing short-term investments can be challenging. And trying to eke out some earnings while focusing on capital preservation and ensuring necessary available liquidity is almost impossible.

Deutsche Bank also offers corporate clients a range of tailored liquidity management services, including automated cash concentration, pooling and intraday or overnight investment services. The bank’s products provide real-time information and offer a global view of cash positions, allowing companies to invest excess liquidity more strategically on an intraday, as well as overnight, basis.

In addition, Deutsche Bank’s asset management arm has Eu186 billion in asset under management in EMEA ex-Germany, is one of the top bank-owned asset management firms in the region and globally, and has a range of investment solutions catering to the current climate and investment needs of corporate clients.

The bank has a CET1 ratio of 11.1%.

Best Bank for Working Capital Optimization

Raiffeisen Bank International

The bank’s longtime presence in Central and Eastern markets have given the bank a truly regional outlook and product set, while also providing solutions tailored to specific markets in the region. On the working capital front, Raiffeisen has unique offerings that match its client base in each market, and enable suppliers—and corporates—to make their order-to-cash or procure-to-pay cycles more efficient and allow them to unlock trapped cash.

One of the big things that stands out about the bank is its focus on solutions that solve problems for clients. As an example, the Cash Management Billing System (an honoree in Global Finance’s Innovators program) may seem like a simple solution, but it answers a longtime desire on the part of cash managers by providing transparency to the bank-corporate relationship.

The bank has a fully-loaded CET1 ratio of 12.3%.

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Countries in Latin America faced massive economic and political upheavals last year. In Brazil, the impeachment of president Dilma Rousseff sparked riots and months of protests, emblematic of a crisis of confidence in the country’s political leaders and systems.

In contrast, Argentina—a country that has struggled since its debt default in 2001, and subsequent “selective” default in 2014, to change its image among foreign investors—is now presenting a more business-friendly and reformist face under president Mauricio Macri, who assumed office at the end of 2015. The other major economy in the region, Mexico, saw growth start to slow toward the second half of last year.

This year, the big question for multinational corporations that do business in the region—particularly in Mexico—is whether US president Donald Trump will enact changes to trade policies, and what this means for those companies that derive the bulk of their revenues from trade with the United States.

According to Carmela Gómez Castelao, head of international transaction services at BBVA, security and risk management are key concerns for companies based in Latin America. “Companies are looking at employing successful tools to protect themselves,” she explains. “These tools go beyond the deployment of IT—but also [include] analyzing risk at all levels by training employees and validating suppliers.” Castelao says that ensuring security of communication channels is critical.

She also highlights the drive to digitize, citing corporate executives’ desire for an enhanced digital experience, with simpler interfaces and fewer processes. “Customer experience is on everyone’s mind; [and] investment in innovation [means] channels, online customer services, products and DIY [do-it-yourself] capabilities that allow an ‘anywhere-everywhere’ service.”

Data is king, adds Castelao, in helping customers with their day-to-day supply chain and liquidity management. In a region that is made up of many countries, each with its own systems and utilities for payments, clearing and settlement, companies are keenly aware of the challenges of managing cash and liquidity.

Castelao says cash flow forecasting and efficient cross-border account structures are critical for both clients and banks, as is “designing a standardized payment process for all payment types in the region.”

Going into 2017, she says the matter of faster payments is topical, with initiatives already underway to improve the speed and efficiency of payment systems in different countries in the region. “[It] is making financial institutions invest in digital technology solutions—as we’ve seen with the explosion in blockchain initiatives—through collaboration with fintechs,” explains Castelao. 

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LATIN AMERICA

Best Overall Bank for Cash Management

BBVA

BBVA has an on-the-ground presence in the major markets of South and Central America. Its BBVA Cash is a highly customizable multicountry, multibank digital banking solution. The NetCash app, a former honoree in Global Finance’s Innovators program, allows corporate treasurers and staff to handle a surprising array of functions via their mobile devices. These  include viewing account positions, accessing latest transactions and the associated documents, handling transfers, managing cards, along with market-leading functionality such as generating codes needed for signing transactions and managing and advancing invoices for trade financing products, of which reverse factoring is one example.

The BBVA group reported income before tax of €5.1 billion in the first 9 months of 2016, and operations in Mexico and South America accounted for 57.7% of group income over the same period. The bank has a CET1 capital adequacy ratio of 12.3%

Best Bank for Liquidity Management

Citi

One of the key differentiators for Citi in Latin America is that it has created market-specific liquidity management solutions for the countries in which it operates. For example, “Citi offers a Multi-Bank-Target-Balance solution in Brazil and Peru that allows customers to manage cash across all the banks and concentrate flows with Citi for efficient cash management,” notes the bank. It has the Citi Interest Optimization solution for countries including Argentina, Brazil, Costa Rica, Peru, Panama and Guatemala. Citi’s Global Concentration Engine solution is available in Puerto Rico, letting clients perform cross-border pooling beyond local clearing cut off times, using a target balance design. Users can also apply arm’s length pricing and thin capitalization policy to satisfy different tax jurisdictions. In Brazil, the bank launched FCA, an automated platform for short-term investments, allowing clients “to invest cash in short-term investments and redeem it in real-time only if there is a commercial payment exceeding available cash.”  The bank has a CET1 ratio of 12.5% and reported income of $3.6 billion for  2016.

Best Bank for Payments and Collections

BBVA

BBVA offers a range of payments and collections services for markets in the region to provide a clear view of cash and transaction details and. Its multibank, multicurrency digital banking solution provides a single position for the region. It has an electronic collections solution that offers access to collection details in each country, e-collections, a vault service, and e-invoicing and remote deposit. On the domestic payments front, it supports digital payments and tax payments, multicurrency digital transfers and check outsourcing.

The bank’s Net Cash app has twice been an award winner in Global Finance’s annual Digital Bank Awards.  BBVA recently bought Mexican firm OpenPay, which facilitates digital commerce and payments for companies in the Mexican market. The bank is a leader in technology innovation, and was an early leader in launching an innovation competition and mentoring program, Open Innovation and Open Talent, with its latest round of the former focused on “alternative banking business models.” The Open Talent program was launched in 2009 and last year boasted 1,200 entries from 77 countries.

Best Provider of Short-Term Investments/ Money Market Funds

Santander

The bank offers tailored short-term investment solutions for different markets in Latin America. In Argentina, for example, in addition to term deposits denominated in ARS and US dollar, it also offers an open-ended money market mutual fund in ARS, along with dollar-denominated sovereign bonds. In Brazil, in addition to automatic sweeps and term deposits, the bank provide clients with repos denominated in BRL that are yield-advantaged vs. traditional MMFs. And in Chile, the bank offers repos, terms deposits and open-ended investment funds, all denominated in CLP, USD or EUR. More broadly, the bank’s asset management arm, Santander Asset Management has €84.4 billion of asset under management in Latin America, representing 45.9% of the bank’s global AUM. The asset management arm of global bank Santander manages 23 funds across various asset classes, including multi-asset class solutions, and has viewed Latin American asset management as a key focus area for close to 20 years. It has the largest team in the region devoted to investment management, with 79 managers, analysts and economists and it is the largest international management firm in the region.

Best Bank for Working Capital Optimization

Citi

As companies in Latin America focus on creating more-efficient treasury structures and unlocking liquidity in trade flows, some international banks have concurrently been reducing their presence and footprint in the region. Citi, however, has doubled down on Latin America, providing corporate clients and their global trade partners, with a wide range of solutions to help unlock capital tied up in their working capital cycles.

Few banks have the capability to provide a holistic view and approach within the disjointed Latin American region, but Citi’s global solutions simplify and enable better working capital management. The bank offers a range of trade finance and supplier finance solutions, along with distributor finance, export-credit agency backed working capital programs. In addition, large corporates can take advantage of Citi’s Working Capital Analytics review service where the bank mines a company’s payments data to determine working capital enhancement opportunities and its procure-to-pay suite of solutions. 

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Treasury and cash management in the Middle East region is complex and unique—reflecting the different economies and companies that operate here. The region is home to some of the most advanced corporate treasuries in the world—and a host of smaller treasury operations that are becoming increasingly sophisticated. Regional banks have worked hard to provide services that meet the needs of these diverse client bases, to ensure that companies have the tools they need to excel as their focus turns outward from home markets.

The region saw limited economic improvement in some countries, rather than broad-based progress in 2016, according to Focus Economics. It also saw geopolitical stability improve in some markets, such as Iran and Iraq, while others, namely Syria, continued to deteriorate.

But those countries dominated by the oil and petrochemical sectors continued to suffer as a result of low-for-long oil prices. One of the key impacts has been less liquidity, as governments struggle to cover budgets and pull liquidity from the region’s banks to do so. A related effect is higher costs and reduced funding access for corporations.

This means that companies have had to become more efficient in their cash and working-capital management, leading them to look for better tools and services. This is especially true for small and midsize enterprises and family-run businesses. Many companies had grown accustomed to easy access to funding and liquidity in the heady days when oil was priced at $100 or more a barrel.

But given the sophisticated operations of the region’s largest companies, many are looking to treasury solutions that can increase enterprisewide visibility across the working-capital cycle.

Economic and regulatory reforms to increase business friendliness have been a key plank in the agenda of some of the region’s largest economies in recent years. Companies can make use of regional solutions, such as cross-border cash pooling, to increase efficiency of liquidity and cash management.

In addition, digitization of payments is a key area of development for corporations—although it is hampered by the fact that many markets continue to be driven by cash and checks, and by payments infrastructures that vary greatly from market to market.

The year 2017 started out on a positive note for the oil-exporting economies of the region, as oil prices began to rise following the oil-output cap effected by OPEC. But souring that for many countries was the immigration ban, currently under review by the judicial branch in the United States, that was enacted by President Trump’s administration in late January. 

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MIDDLE EAST

Best Overall Bank for Cash Management

National Bank of Abu Dhabi

National Bank of Abu Dhabi has consistently invested in building its cash management and transaction banking product offering and services in recent years, with the rollout of a number of solutions in the past year.

For example, the bank recently launched a receivables management and integrated information reporting solution to help simplify complex reconciliation and reporting requirements. It released an Escrow Management System and dramatically increased escrow management services. And it continued to improve its regional transaction services, rolling out its iBANKING digital banking solution in Oman and Egypt.NBAD is also keenly focused on how new fintech developments are changing the banking landscape. As the bank noted, “We are the first commercial bank globally to successfully execute a Blockchain pilot with Ripple.”

Best Bank for Liquidity Management

National Bank of Abu Dhabi

The bank offers a full suite of liquidity management and interest optimization solutions for its local and regional clients, including a range of cash concentration and reporting options. NBAD’s flexible sweeping solutions, multi-entity sweeping for 100% owned subsidiaries. Third-party sweeps are managed via SWIFT MT101 arrangements, and the bank can provide back-valued solutions—where sweeps for previous dates can be recalculated on back-valued transactions. Reverse sweeps—where the balances are returned at the start of the next working day from the Master back to the Participant account—are also supported.

The bank provides cash pooling for interest optimization, with support for tiered interest rates and interest allocation options for different accounts.

Liquidity and interest optimization solution can be accessed via NBAD’s iBANKING corporate digital banking platform.

Best Bank for Payments and Collections

Samba Financial Group

Samba stands out in particular for its tailored and unique payments and collections services for clients. The bank won a number of important new mandates in the past year on the strength of that position—and its soundly modern technological infrastructure.

For example, the bank was mandated to provide real-time online payments with host-to-host connectivity for Umrah pilgrims.

It also launched a unique service to manage dividend and coupon payments to shareholders or investors electronically through its Samba Access platform, using data feeds from the Saudi Stock Exchange (Tadawul). The bank released a billing and settlement engine for clients to upload, manage and pay invoices.

Best Provider of Short-Term Investments/ Money Market Funds

Banque Misr

Banque Misr is one of the largest banks in Egypt. Established in 1920, Banque Misr now boasts 580 branches across the region and worldwide. The bank offers MMFs denominated in Egyptian pounds, dollars and euros.

With an extensive distribution network, and given the flexible, low risk structure, its Yom B Yom MMFs have seen impressive growth. They hold significant market share on the back of higher yields versus current accounts and deposits—and as a result of the bank’s flexible liquidity and investing solutions.

Best Bank for Working Capital Optimization

Citi

The combination of Citi’s longstanding, deep penetration of Middle Eastern markets coupled with its global, market-leading solutions for working capital optimization make it easily the best bank for companies in the region to work with in this area.

It boasts a full suite of financial supply chain solutions to help companies improve efficiency in their working capital cycles, including a wide range of trade finance and supplier finance programs, distributor finance and export-credit agency backed working capital programs. Its powerful Working Capital Analytics service can help companies have a clearer picture of their working capital cycle, benchmark that to peers and determine effective working capital enhancement opportunities. 

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One of the key trends changing the treasury and cash management landscape in the Nordic region is the swift rise of fintechs, which are entering a space that was previously dominated by the banks. Those banks that want to survive, and indeed thrive, have embraced this trend and are partnering with their fintech peers to provide best-of-breed solutions to clients.

“Fintech disruption, digitization, the blockchain, payment systems—these developments are certain to affect corporates and the role played by treasury,” notes Erik Zingmark, co-head of transaction banking at Nordea. “Three of the main disruptive factors we see are technology and digitally-driven future payments, the morphing of treasury ecosystems—including skills development and new solutions—and connectivity within organizations across different banking partners and borders.”

As with the rest of Europe, countries in the Nordic region see the Payment Services Directive 2 (PSD2) as a game changer for their payments business models. The new directive applies to countries in the EU (Denmark, Finland and Sweden) and in the European Economic Area (Norway and Iceland). “Banks are under attack due to changes driven by PSD2,” says Zingmark. “In short, banks and banking will change fundamentally. Fintechs won’t take over, but this is the starting point of new ways of working and new ways of collaborating with partners.”

Treasury needs to drive this change, alongside banks and third parties, says Zingmark, by creating and pushing their own digital agenda and forming a solid strategy for all commercial, financial and intercompany flows. Another key area of focus for corporate treasurers in the Nordics is the efficient handling and easy access to cash and liquidity. Zingmark says centralization goes hand in hand with treasurers’ desire to better manage their working capital. “[Centralization] is particularly appealing to corporations that have expanded quickly and found their finance arrangements have become more complex and fragmented,” he explains. “It can offer greater transparency for regulatory purposes, as well as cost efficiencies through simplifying banking relationships and reducing the cost of previously idle cash.”

Broader market and geopolitical trends are also of prime importance to Nordic companies, especially as they look to grow globally. Zingmark notes, “We will see Nordic companies continue to expand overseas, especially in Asia and other emerging markets, as they search for higher growth markets.”

Zingmark says we are entering a major turning point in payments and how banking fundamentally functions. “A new landscape is taking form and we need to reshape our business.” He says banks need to ask themselves how they need to respond to this new environment. “If they want to survive, they need to deliver the benefits of these developments to their customers,” says Zingmark. 

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NORDIC REGION

Best Overall Bank for Cash Management

Nordea

Banks and their corporate clients in the region are focused on the impact of new regulations, such as the recent revision of the Payment Service Directive (PSD2) and the General Data Protection Regulation (GDPR). For corporates, the biggest impact will likely come from PSD2, which notes Erik Zingmark, co-head of transaction banking and head of cash management at Nordea, “will increase competition by integrating the role of new and emerging payment services into the regulation, promoting innovation and creating a more level playing field for payment service providers (PSPs) or third party payment service providers (TPPs).”

Nordea is the leading cash management bank in the Nordic region, and is the fifth-largest bank in Western Europe by market cap, according to data from Thomson Reuters Datastream. The bank processes around two billion transactions a year. Since early 2016, the bank’s cash management operations have been fully integrated into its transaction banking unit, and the bank is in the midst of a €1 billion “simplification” project to transform its core banking, payments and data warehousing platforms. The goal is to create a streamlined global payments infrastructure, allowing Nordea to be more agile in embracing new technology and initiatives.  On the innovation front, the bank’s Innovation Lab leads partnerships with global fintechs.

The bank reported net profit on €2.7 billion in the first nine months of fiscal 2016, and a very strong, CET1 ratio of 18.4% at year-end fiscal 2016.

Best Bank for Liquidity Management

Danske Bank

Banks in the Nordic region have begun to emerge from the shadow of negative interest rates, adapting their business models to deal with the rate regime themselves. At the same time, they successfully help their corporate clients manage liquidity in this ongoing challenging rate environment. Danske offers real-time visibility and control of enterprise-wide liquidity through its Business Systems banking portal. It provides overlay and pooling structures, as well as support for intercompany limits and interest. Danske enables easy outsourcing of internal risk and centralized liquidity management. Via its group cash pool structure, companies can set unique interest rates for different subsidiaries and allocate internal credit limits to subsidiary accounts.  Danske’s Corporate & Institutions segment brought in pretax profits of DKK3.5 billion in the first nine months of their fiscal 2016, down slightly from the same period a year earlier. The decline in profits is partly due to rising operating expenses and to increased regulatory costs, along with impairment charges relating to facilities for oil sector clients.

Best Bank for Payments and Collections

DNB

Each Nordic market is starting to specialize in specific areas of financial technology development, according to a recent report sponsored by DNB. In Norway, the focus is on authentication and security; Sweden is recognized for e-payments; in Denmark it is the blockchain; and in Finland, the focus is e invoicing and electronic banking for SMEs. Nordic banks partner with fintechs to provide market-changing solutions to clients. DNB, long an innovator in its own right, is ahead of the curve. On the consumer payments front, for example, the bank is the brain behind Norway’s leading e-payments app, Vipps, which it recently spun off, though it maintains a controlling interest. DNB offers corporate clients a broad range of payments and receivables management solutions. Its’ DB Connect corporate banking portal provides a multicurrency, multibank view of global accounts with self-administration for quick authorization of new users. The bank’s DNB Bedrift app offers advanced corporate mobile functionality, including global accounts overview, payments and payments approval, transactions overview, equities trading, file approval and alert services.

Best Provider of Short-Term Investments/ Money Market Funds

Nordea

Nordea is the largest bank by market cap in the region. The bank’s liquidity solutions for corporates are accessible via the multibank, multicountry digital banking platform, Corporate Netbank. Its asset management arm has been one of the best-selling asset managers in Europe for a few years now, with total assets under management of €215 billion end of third quarter 2016. Nordea Asset Management covers a range of asset classes from fixed income and equity to multi-asset solutions and manages regional and European products, along with US, global and emerging market products.

Given the low-yield environment that the region and Europe more generally has been dealing with for quite some time now, Nordea Asset Management has created solutions tailored to provide the best return in that climate, offering “unconstrained products catering for the current low yield environment with either global or regional focus.” Nordea has a CET1 ratio of 18.4% and reported operating profits of €4.6 billion at year-end 2016.

Best Bank for Working Capital Optimization

SEB

SEB offers clients a wide range of solutions to help with working capital optimization. It all starts with benchmarking and analysis in order to determine not only where and how to make processes more efficient, but also to determine if needed investment is ultimately worthwhile with business case calculations of release potential. SEB’s Financial Strategy offering, of which working capital optimization is a key component, is focused on analytics and strategy for its corporate clients. The team helps companies to enhance capital structure, provides corporate ratings advisory, working capital management and treasury best practice. Via the working capital offering, the bank provides clients with “financial engineering alternatives through a range of process improvements, business model adjustments and product usage,” according to the bank. In addition, the bank’s financial supply chain solutions help both clients and their suppliers to make their payables and/or receivables cycles more efficient, providing working capital financing at various points throughout said cycles.

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The key problems that companies in North America are likely to grapple with in 2017 are cross-border regulatory issues, says Ian Stewart, CEO of BNY Mellon Treasury Services. “As in 2016, corporate treasurers will be looking to banks for guidance in managing increasing regulation, particularly as these regulations’ demands vary—and must be reconciled—from region to region,” explains Stewart.

Regulations are costly in terms of both money and manpower, he notes. “As one example,” says Stewart, “the regulatory cost and complexity of dealing with regulation, particularly anti–money-laundering and know-your-customer demands, has created a $1.6 trillion trade finance gap globally.”

Both multinationals and US domestic companies with operations across state lines will be impacted by Section 385 regulations, which were released last October by the Internal Revenue Service and the Treasury Department. The regulations aim to address the issue of earnings stripping and certain tax-free repatriations of capital via intercompany debt issuance. Section 385 significantly increases the documentation requirements on companies and includes the general recast and funding rules, which would see specific types of transactions funded by domestic debt issuance—and possibly certain trade payables—recast as equity.

Other regulatory actions requiring the attention of US-based corporations include Base Erosion and Profit Shifting (BEPS)—the OECD’s transfer-pricing initiative set up by the G20. As consultants at information firm Thomson Reuters explain: “New global tax requirements [under BEPS] will result in the need for worldwide standardization of data
collection and processes, centralized control, up-to-date monitoring of global transfer-pricing legislation updates, and accurate risk assessment.”

For treasurers, this means working more closely with the tax and finance departments and company boards, to ensure compliance with these new regulations as they are rolled out in each jurisdiction. How this ultimately plays out for US companies could depend on the new Donald Trump administration, which is expected to take a business-friendly approach to tax and regulatory policy.

Then there is the issue of technology. “There’s a lot to monitor,” says Stewart, “including the role of Big Data, mobile banking, challenges—and opportunities—from
fintechs [financial technology companies], real-time payments, same-day ACH payments, application programming interface development, tokenization and Swift’s global payments initiative, to name a few,” he says.

Rapid development in the world of payments provision creates a number of decisions for transaction bankers, such as whether to invest in these technologies or work with technology partners. For corporate treasurers, one key question is how to weigh the contrasting offerings and costs of bank and nonbank providers.

The world is full of unknowns, including potential trade conflicts between the US and its trading partners.“Like financial institutions the world over,” says Stewart, “we are closely monitoring the effects of the new presidential administration in the US—and the effect of Brexit in the UK and Europe—on the global economy.”

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NORTH AMERICA

Best Overall Bank for Cash Management

Citi

Citi Treasury and Trade Solutions can count 81% of F500 companies as clients. The bank provides its corporate clients with leading solutions such as Citi Treasury Diagnostics, a benchmarking and analysis tool that measures performance and provides feedback and analysis in such areas as working capital and liquidity management, entity funding and repatriation as well as systems and technology. The bank has made major investments in areas such as liquidity management and receivables management through tools like Citibank Online Investments and Money Fund Analytics, and its ‘Payments-On-Behalf-Of’ services for corporate in-house banks. The bank’s CitiDirect BE digital banking solution has garnered accolades for 11 years running in independent research firm Greenwich Associates’ Digital Banking benchmarking study. CitiDirect BE is particularly strong in client onboarding and cross-product integration, and its CitiConnect service provides a range of technology integration solutions, including solutions for File/SWIFT connectivity and the CitiConnect ERP Integrator. The bank also offers out-of-the-box solutions that are highly user-focused, such as InfoPool, by which Citi collects daily account statements from third party banks, collates them and sends a single statement to the client. InfoPool also has the functionality to produce statements to send to a client’s other banking partners in a variety of formats.

Best Bank for Liquidity Management

Citi

Citi provides a suite of analytics tools to examine and improve liquidity and investment structures for greater operational efficiency. With one of the largest footprints of any global bank, you would be hard-pressed to find a bank with similar advantages when it comes to regional and global liquidity management. Most particularly, the bank has structured liquidity desks in various global locales to support and facilitate investment transactions in disparate regions and countries worldwide. The structure provides several advantages for customers. For one thing, clients can access real-time market updates and trade execution support. In addition, the bank provides tailored liquidity solutions for various maturities and has, for example, engineered liquidity products specific to maturities longer than overnight. The bank provides Global Liquidity Management programs, such as notional pooling and target balancing, where appropriate. Moreover, it has launched innovative new services, such as Citibank Online Investments and Money Fund Analytics. In addition, the TreasuryVision Global Liquidity Portal is an integrated solution to provide enterprise-wide visibility of global financial information, with analytics to help in managing risk and liquidity, together with a number of treasury workflow tools to increase efficiency. The bank has a CET1 ratio of 12.5%.

Best Bank for Payments and Collections

Citi

The bank long ago built its name as a cornerstone payments provider around the world, and its market-leading position in this space continues. Citi’s Integrated Payables Solutions provides a suite of leading-edge analytics, core and emerging payment services, for domestic and cross-border payments, B2B commercial cards, and wholesale payments. The bank has launched a number of services in recent years to address specific problems for corporate clients, such as “Citi Payment Exchange to support payment digitization, and Citi Integrated Freight Processing to help optimize management of logistics spend,” notes the bank. Its CitiConnect services make it easy to get on board with their solutions and supports integration with internal systems. Citi boasts more than 80% of the Global Fortune 500 companies as clients of its banking, payment and trade services. The bank has a CET1 ratio of 12.5%.

Best Provider of Short-Term Investments/ Money Market Funds

JP Morgan Asset Management

Major money market fund reforms in the US have now taken effect, including the requirement for prime MMFs to move from a stable to floating net asset value, along with the imposition of redemption fees and liquidity gates in certain cases. One key result is that many investors, including many corporate investment managers, have focused on government MMFs and away from prime funds. Corporates are looking for advice and help in understanding what the changes mean, whether there will be further changes, and how they should respond. The asset management arm of banking giant J.P. Morgan is one of the largest and most diverse investment management outfits in the world, and regularly provides insights, as above, for its diverse clients. It has a unit dedicated to liquidity investment—J.P. Morgan Global Liquidity—which is well-positioned to understand and assist North American corporate investment managers with their short-term investment needs. The bank’s Global Cash portal, its’ trading and account management solution for Global Liquidity customers, helps companies best manage cash and liquidity needs in the region, and worldwide. J.P. Morgan Asset Management has global assets under management of $1.7 trillion, and the banking group has a CET1 ratio of 12.4%.

Best Bank for Working Capital Optimization

BNY Mellon

BNY Mellon is one of the leading providers of working capital management solutions worldwide, according to recent research. The bank stands out not only for its range of offerings, but also for its unique solutions to local problems. It is involved in key initiatives to further enable digitization of the supply chain and trade, such as the blockchain. But probably the most game-changing development for the bank is its move to NEXEN—an open-source, Cloud-based technology platform. Ian Stewart, CEO, BNY Mellon Treasury Services notes: “BNY Mellon has for many years been a thought leader regarding the impact of regulation. Regarding new technologies, we have been proactive, both partnering with fintechs when optimal, and advancing proprietary technologies, such as our NEXEN platform.” An example of the way in which the bank helps its clients dig into their financial processes to free up working capital is to leverage the clients’ core payables function into a working capital advantage via supplier finance programs. Its Payment Analytics service does a deep dive into a company’s payments processes to anticipate the availability of funds and to increase efficiency in managing current cash positions. On the procurement side, the bank helps companies to optimize payment terms and work with procurement, suppliers and the finance team to set working capital targets. The bank has a fully phased-in CET1 ratio of 11.3%.

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