Tag Archive for: banking

Bank Relation Management

| 12-12-2016 | Maarten Verheul |

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There is a lot to say about bank relation management. And there are a lot of things in a bank relation that could be better. Send every information to the bank in time and do not wait until the bank asks for the information that is needed. Do not make them nervous.

Simple, do not sent your annual report to the bank, but make an appointment and speak about it. Do not wait for a reminder of the bank if you have something you have to deliver every month like inventory statement or accounts receivable statement, but communicate if you are late and when you expect to do it.

There is a lot to do nowadays. For example the ratios you have to report quarterly – do not come in default with this. Sent the ratios in time and do not wait until the bank asks for the ratios. Do not make them nervous.

Bad communication most of the time is also the cause that a company goes from normal management to special management of the bank. Not only the financial reports are the cause of going to special management of the bank. Three months ago I met a retailer whose business was transferred from normal department to special department of the bank because of bad communication. He waited until the bank asked for the annual report. Be proactive towards the bank, that is good for the relation. My advice: ‘Give your annual report to the bank when it is ready.’ Two weeks ago he told me that his shop was closed by the bank. The shop owner had his annual report ready in January, but waited till the bank asked for it in September –  with all the consequences.

Therefore a daily cash statement and a CF Planning is important. Companies that do not do that, sometimes do not know that they are running out of cash and they sent more payment transactions (in value) to the bank, than the bank can execute. The bank notices that of course. That is bad for your bank relation and before you know you are in the special management department of the bank. So cash management is a part of your bank relation management.

Make a payment statement every week, that indicates what you are going to pay. Make a note when you made a payment promise. The best is to give Accounts Payable a budget every week and let them make the payment statement. This will help you to have a payment batch with a value that is not higher than the value of cash.

A lot of companies pay too much interest on their loans. Good Bank Relation can help you to lower the interest rate. Small companies pay sometimes 300 points above 3 months Euribor rate and bigger companies pay only 60 points above 3 months Euribor rate. That is 2,4% more interest. There are always things to discuss with your bank that can decrease your rate. For example, you did a sale lease back of your real estate and because of that the equity of your company improved a lot. That is certainly a reason to decrease your rate. Another reason can be your annual report and sometimes a long term good relation can be a reason. But most of the time this is how it works with a bank:  when you do not ask you do not get anything.

maartenverheultxlMaarten Verheul – Treasury Consultant

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Rentederivaten in de ban… of toch niet?!

| 9-12-2016 | Rob Bekker |

grafiekEr staat op dit moment veel in het nieuws over rentederivaten en de ontwikkelingen rond deze producten. Rentederivaten kunnen nuttig zijn om het renterisico af te dekken, het zijn echter ingewikkelde producten. Als treasurer zult u de werking en de risico’s van het product goed begrijpen. Als u toch behoefte heeft aan voorlichting kunt u zich laten informeren door uw bank. Daarnaast kunt u kennis over de werking van deze producten in huis halen, bijvoorbeeld bij een advieskantoor dat zich specialiseert op het gebied van rentederivaten.  

Wij hebben onze expert Rob Bekker gevraagd om kort in te gaan op de ontwikkelingen rond rentederivaten:

Al enige jaren lijken rentederivaten volledig in de ban gedaan, wellicht mede door de veelal negatieve aandacht in de media. Daarnaast gaven de ontwikkelingen op geld- en kapitaalmarkt niet direct aanleiding om in te dekken tegen stijgende rentes (vanuit leningperspectief bekeken dan). Nu het er (opnieuw) op lijkt dat de rentebodem is bereikt, is het toch zinvol om concreet na te denken over de renteafdekkingsstrategie die men binnen een onderneming wil toepassen.

Staan er toekomstige investeringen op stapel die financiering behoeven, dan zijn er prima renteproducten te hanteren om binnen het risicoprofiel (én strategie) van een onderneming de rentelasten op flexibele wijze in toom te houden. Zorg dat u weet wat u te doen staat als de rente daadwerkelijk weer gaat oplopen. Regeren is vooruit zien.

Met de binnenkort van de Derivatencommissie te verwachten nadere uitwerking van het herstelkader zal in elk geval duidelijk worden hoe de toepassing van rentederivaten, die in het verleden op onjuiste basis of onjuiste gronden heeft plaatsgevonden, dient te worden gecorrigeerd. Daarbij zullen de banken dan een passende compensatie moeten gaan aanbieden aan haar cliënten binnen de specifieke doelgroep. Dit zal naar verwachting opnieuw veel aandacht in de media opeisen, maar hopelijk in het juiste perspectief en dus zonder rentederivaten in de ban te doen.

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Rob Bekker

Associate Partner at Treasury-linQ”

 

New norms in banking: more than 30 new areas emerging. Pick your Fights!

| 28-11-2016 | Hans de Vries | treasuryXL |

motherboardWe came across an interesting ‘panorama’ from McKinsey& Company about the key Fintech trends and asked our expert Hans de Vries to comment on it. He came back with interesting insight, that we want to share with you:

Blockchain, PSD2, Bigdata, Crowdfunding, Bitcoins: never a dull moment in the banking world. The McKinsey Panorama provides a perfect overview of the rapid technological changes taking place in the banking world today. However it’s hard to predict the impact of all these developments on the day to day operations of the corporates. Over the years we have seen trends like the “Holy EDI Grail” never coming fully of the ground due to a lack of general acceptance and interoperability. Some corporates stepped-in really early and now finally reap the benefits as a result of a generic acceptance of for example XML standards for the information exchange. This does not mean that you’ll have to lean backwards and wait for the future developments to start materializing. The challenge is to keep moving forward while optimizing the internal processes according to the latest more or less standardized techniques. In some cases you may not be using the latest technical solutions, however you achieve the goals in a more practical way and it leaves room for further improvement on the way. The main message should be: don’t get overwhelmed by all these new developments, keep moving forward and pick your fights carefully.

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Hans de Vries

Sales Consultant at PowertoPay

Kunnen banken zich opnieuw uitvinden of is het inderdaad Kodak revisited?

| 24-11-2016 | Jan de Kroon |

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Dat alle banken op dit moment stevig ingrijpen in hun business model en bedrijfsvoering behoeft geen betoog. Het staat immers dagelijks in de krant. De topman van ING geeft zelfs openlijk aan dat zijn bank zich transformeert naar een IT dienstverlener en ING is dus een van die banken die aast op over te nemen FinTech-bedrijfjes om het transformatieproces te versnellen. Ook de andere banken switchen in hun businessmodel en voegen zich in de ratrace.

Situatie uit zicht van de bank

Als belangrijk argument geldt steeds de verzwaarde regelgeving die het steeds minder interessant maakt het traditionele rentebedrijf te voeren in combinatie met een toezichthouder die banken op dat punt in de nek hijgt. Een veel meer bemiddelende rol en een vergoeding op provisiebasis lijkt het logische antwoord. Tegelijkertijd wil je als bank wel een beetje grip houden en dus een belangrijke rol in het verloop van geldstromen houden. Om daar nog iets aan te verdienen moet je dan wel mee in de technologie. En dus mee in de uitdagingen die FinTech bedrijven bieden.

Juist daar lijkt de historische vergelijking met Kodak op te gaan, waar oprichter Eastman alle nieuwe technologische innovaties wilde omarmen, op voorwaarde dat een filmrolletje een vast onderdeel was van de oplossing. Ook banken transformeren zich waarbij een zekere constante te vinden is in het regisseren van geld en betaalstromen. En alle oplossingen lijken dan ook innovatieve Fintech inhoud te moeten hebben.

Intussen is het nog maar de vraag welke banken nog echt weten wat de klant wil en wat die klant echt nodig heeft. Zo buitelen banken over elkaar heen met beloften over binnen hoeveel uur een financieringsaanvraag wel niet uitgewerkt is en hoe makkelijk je online je zaken kunt regelen. Daarbij wordt verondersteld dat de klant dat belangrijk vindt. Het is niet dat dat de klant het niet op prijs stelt; die gaat ook met zijn tijd mee immers. Feit is dat het niet meer is dan een hygiënefactor en geen onderscheidend kenmerk.

De wens van de klant

Wat wil die klant dan wel; welnu die klant wil vooral aandacht en een goed advies. Die klant snapt dat de bank efficiënter wil gaan werken want die tendens is er in zijn eigen onderneming ook. Wat die klant daarentegen niet begrijpt is dat de te bereiken efficiencygraad vooral de winst van de banken moet gaan verbeteren in plaats van de vrijgekomen financiële capaciteit te besteden aan effectiviteit van de dienstverlening. Afgezien van wat technologische verschillen is er nu al geen wezenlijk verschil meer tussen de Nederlandse grootbanken in de klantbediening. In feite zoals dat bij de grote energieleveranciers al langer het geval is.

De zakelijke klant echt centraal stellen vraagt naar mijn mening vooral om het borgen van de oprechte aandacht voor de klant; one way or the other. Je terugtrekken op de technologie achter het IBAN nummer of vergelijkbare bewegingen zouden wel eens het nieuwe KODAK kunnen worden; geen producten en diensten zonder infrastructurele technologie. Wil de echte bank opstaan.

Jan de Kroon

 

 

Jan de Kroon

Owner & Managing partner of Improfin Groep

 

How Bank Independency improves your Treasury Performance

| 18-11-2016 | PowertoPay |

bankgebouwenAs RBS in april 2016, ABN AMRO announced recently that they will lay off another 1500 employees worldwide and reduce services due to ongoing digitalisation. We came across an article of PowertoPay and in the light of recent developments you might find it interesting to read.

As we emerge from the global credit crisis and banks are starting to (geographically) withdraw from some parts of the market, managing cash flow more effectively is a top priority for treasurers. Monitoring, analysing and reporting on underlying business cash flow and risk has become extremely important. Despite the changing role of the treasurer which resulted in new requirements, treasury must still determine the optimal organizational structure that meets both strategic goals and supports overall efficiency. These efficiency goals have created the need for centralized bank-agnostic solutions that aggregate all financial information onto one platform.

The evolved need for bank-independency

As competition increases in the payments market, banks need to create competitive differentiation, either in-house or in a shared model. Banks need to reshape their focus and keep a consistent client focus. A recent example of a bank that needed to reshape was the withdrawal of RBS from a large number of countries. RBS has made the choice of being a consumer bank for the UK and decided to end servicing the earlier acquired Global Transaction Banking customers.

The withdrawal of RBS from large parts of the market created the need for large corporates to investigate bank-independency and bank-agnostic solutions more thoroughly. A logical consequence, because how can you be certain that your bank will remain active in a specific country for over five years? Frank Nolden, CEO of PowertoPay states:  “If the financial crisis has taught us anything, it’s that no matter how big, banks can go bankrupt. Therefore, corporates want to decrease their risk on financial counterparts, because these counterparts might no longer exist in a few years”.

Reducing risk

In order to: 1) reduce the risk on financial counterparts 2) overcome the bottlenecks  3) reduce potential credit inefficiencies found within the use of single banks, corporate treasurers increasingly focus on bank-agnostic solutions. Connecting to multiple banks via a centralized bank-agnostic solution means lowering the risks of having to change and select new banks in the future, which allows corporates to have greater financial performances.

Succeeding with simple connectivity

Large corporates more often choose for developing channels and services that support a multi-banking, bank-agnostic approach. According to the CEO of PowertoPay, Frank Nolden, “the maintenance of all the different multiple technology systems have driven corporates to opt for simple hub connectivity through centralized solutions”. Many corporates have to connect to a myriad of bank portals with numerous security tokens to handle their treasury operations, which considerably increases risk. Bank-agnostic solutions automate, centralize and standardize globally these payment and cash management processes, allowing treasurers to make better, more informed and faster decisions based on real-time holistic insights, improving their performance.

Conclusion

Corporates are always seeking to increase the levels of operational efficiency. Maintaining all types of different multiple technology systems with low efficiency levels have driven treasurers to opt for bank-agnostic, centralized solutions. These solutions reduce the risk on financial counterparts, creating more streamlined and effective treasury operations.

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Managing cash across borders

| 01-09-2016 | Olivier Werlingshoff |

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ING has launched a tool for managing cash across borders. Dubbed Virtual Cash Management (VCM), the solution, announced on the 24th of August, provides an array of digital solutions for corporate treasurers, including internal transfers, reconciliation and invoice matching. It also supports payment-on-behalf-of subsidiaries transactions, as well as collection-on-behalf-of subsidiaries transactions. (pymnts.com)

ING about this new tool:

 

 

“Virtual Cash Management (VCM) is a next-generation digital cash management solution centred around treasurers’ current and future needs. Designed to help treasury functions reach the next level of optimisation, VCM facilitates centralised cash management, visibility and control – without the significant cost or complexity that is traditionally associated with such goals.

The Virtual Cash Management solution combines a cross-border Virtual Bank Account (VBA) structure with Virtual Ledger Accounts (VLA) displayed in an advanced multi-bank cash management dashboard, offering a group-wide view of all payments, collections and cash – as well as enhanced reporting functionalities.” (ingwb.com)

What do our experts think about this tool? Will this help treasury functions reach the next level of optimisation?

Olivier WerlingshoffOlivier Werlingshoff:

Banks are looking for alternatives for the notional pooling. Companies use notional pools to compensate the positive balances from one account with the negative balance from another without moving any balance. Another positive aspect of notional pools is that intercompany transactions are avoided.

By using virtual accounts companies can still keep all transactions related to one bank account. For banks, on the other hand, virtual account are only virtual and uses one and the same real bank account for all transactions.

This is one option to avoid notional pools.

treasuryXL: summer holiday reading material

| 10-08-2016 | treasuryXL |

Time flies, it is August already. And, for most people, August means holiday time and taking time to read. Have you got your summer holiday reading list sorted yet? The perfect moment to provide you with some summer holiday reading material. These are the top 5 best read articles of treasuryXL from the start. Have a great summer!

 

1 | How can Cash Management influence the Cash Conversion Cycle?

| 27-06-2016 | Olivier Werlingshoff |

credit-card-851502_960_720How can the Cash Conversion Cycle (CCC) be optimized? The CCC measures the time the money is tied up in the sales and the production process before it’s converted into a cash in from customers. When translated in a formula this will be the DSO + DIO – DPO (Day’s Sales Outstanding + Day’s Inventory Outstanding – Day’s Payables Outstanding). Read the full article

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2 | Business case – Funding strategy : how Fastned uses Nxchange

| 09-05-2016 | interview with Claire Tange from Fastned |

logoFastnedFastned’s growing and they’re giving investors the chance to directly buy and trade in certificates of shares via Nxchange. We’ve asked Fastned’s CFO Claire Tange to explain this type of financing. Read the full article [separator type=”” size=”small” icon=””]

3 | Treasury ABC – part I

| 08-07-2016 | Jan Doosje |

S059QDGBOGFor many people Treasury is, as they think, something that is not concerning. Because there are many items that could be mentioned and listed here, I chose to mention the items that have effect on our daily lives, even if we are not aware of the existence of the described item. I’ll call it the Treasury ABC for normal citizens. Read the full article

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4 | 8 Career Hurdles in a Transfer from Banking to Corporate Treasury

| 07-07-2016 | Pieter de Kiewit |

careerAn increasing number of bankers come to my recruitment desk wanting to make a transfer to corporate treasury. This transfer can be made successfully but there are a number of things to take into account. Below the 8 career hurdles, I hear most about, in a transfer from banking to corporate treasury. Read the full article

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5 | Foreign bank accounts, how to include them in your cash pool

| 21-06-2016 | Jan Meulendijks |

janmeulendijksSignificant balances on your foreign bank accounts which are really of better use in the country where your operation is? Include them in an automated cash pooling scheme so that all your funds are available in The Netherlands and no more unnecessary interest is paid! Read the full article

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8 Career Hurdles in a Transfer from Banking to Corporate Treasury

| 07-07-2016 | Pieter de Kiewit |

careerAn increasing number of bankers come to my recruitment desk wanting to make a transfer to corporate treasury. This transfer can be made successfully but there are a number of things to take into account. Below the 8 career hurdles, I hear most about, in a transfer from banking to corporate treasury. 

 

8 Career Hurdles in a Transfer from Banking to Corporate Treasury:

  1. Understand the essential difference – Corporate treasury is about supporting the core business, banking is the core business;
  2. Translate the lingo I – Banks use different words; they talk about “transaction services” for the payment infrastructure. Within a corporate this term is often used the way auditors do for due diligence processes in M&A;
  3. Translate the lingo II – Banks give different meaning to the same words. An easy example is “treasury”. This is only financial markets related within a bank and a description of the whole department within a corporate environment;
  4. Bankers do not leave their vertical – Due to the size of banks, bankers can be specialized in one area and often do not leave their field. Corporate treasuries are often small and need generalists;
  5. Bankers are paid better – It is what it is.
  6. Corporate treasurers are not in the center of attention – Being in a supportive role, they often do not get the same respect bankers get;
  7. Banks provide a more extensive support infrastructure – The level of support in HR, legal, IT and other aspects banks can provide, is often not available for corporate treasurers;
  8. Bankers have to deal with the stigma – That they are overpaid, vain, lazy, inflexible, not hands-on and one cannot trust them.

Non of these hurdles are, in my perception, deal breakers. Bankers are often well-educated, hard-working, smart and business savvy potential colleagues that can really contribute. First, they have to deal with the above by themselves. They have to be convinced they want make the transfer for the right reasons. Then they can translate this in a proper labour market communication strategy and find the corporates that have dealt with the above.

It can be done, I am available for support. What do you think?

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search