Integration of cash and trade key for greater efficiency in Asian banks

As clients look for enhanced services, banks will have to strive for better cash and trade product sets - find out what HSBC’s John Laurens, Citi’s Ravi Saxena, and DBS’ Ken Stratton have to say.

ABF: How is the integration of cash and trade affecting Asian banks?

HSBC: John Laurens, Head of Global Payments and Cash Management
Clients are looking for greater advisory support from Banks to improve their financial processes.

Whilst the delivery of traditional payments and collection services, whether through Trade or Cash Product sets from Banks, remains important, clients are looking for service enhancements beyond the normal movement of cash. As well as working with our existing customers to integrate their own financial environment, HSBC is increasingly being asked by these clients to provide similar payments, collections and financing services to their customers or suppliers to further enhance the integration process within the supply chain.

This trend is in line with an overall shift in the value proposition of Transaction Banks. To be effective in today’s world, their orientation needs to move to the integration of cash, trade, foreign exchange and short term credit to meet the corporates’ need for working capital management and the effective harnessing and management of their liquidity.

Citi: Ravi Saxena, Managing Director, Asia Pacific Trade Head, Global Transaction Services
Cash and trade have been an integrated business for Citi for almost 5 years and globally for 3 years. The benefits we see are a couple. First is the management of the balance sheet, because if you just take one business, let’s say cash, it generates liabilities. And then consequently these liabilities need to be deployed to really earn the returns, and that is the trade part of the equation. In terms of just optimizing the balance sheet and managing it, it is very helpful that you have the businesses together to support clients.

There are further synergies. For example, let’s take payments and payables financing - things like integrating with the clients, workflow management, they are very common to both solutions , so that’s a synergy you get from the integration .

DBS: Ken Stratton, Global Head of Sales, Global Transaction Services
How many banks have actually been successful at integrating cash and trade? Great momentum has been made on delivery channels, and many now offer consolidated cash and trade offering, with single sign on capabilities and data threading. On the sales front there has been some success, but there is still a long way to go. Sales people are getting much more comfortable asking questions to unearth opportunities outside their main area of expertise, but once the opportunity becomes more complex, they are still looking to the subject matter expert to iron out the deal.