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I am deputy editor at The Banker, a Financial Times publication. I joined the magazine in August 2015 as transaction banking and technology editor, which remain the beats I cover. Previously I was features editor at Profit & Loss, an FX and derivatives publication and events company. Before that I was editorial director of Treasury Today following a period as editor of gtnews.com. I also worked on Banking Technology, Computer Weekly, and IBM Computer Today. I have a BSc from the University of Victoria, Canada.

Thursday, 29 August 2013

What do corporates want from their banks?

May 2013

During a SWIFT Business Forum in London, Anne Coghlan, Head of Group Treasury at Dyson, talks about the realities of corporate banking and whether the banks are stepping up to the plate to deliver a home run in corporate customer experience. 

As corporates face new and continual challenges due to the sluggish global economy, their banking needs are evolving – and so are their expectations as to what banks should deliver in order to support their business. Much of this expectation is also driven by rapid technological innovation.

For Anne Coghlan, Head of Group Treasury at Dyson, which designs and manufactures vacuum cleaners, hand dryers, bladeless fans and heaters, there are two levels to the bank interface. Firstly, there is the “bread and butter” of day-to-day treasury transactions, such as payments and cash management. She voices her surprise that many banks do not offer a “health checklist” to assess how a corporate is functioning in the basic areas.

Secondly, there are the new tools, or “sexy bits”, such as helping corporates achieve better market penetration with their goods. She believes that these two levels need to be intertwined for a qualitatively better corporate experience, but that banks “haven’t quite got it right”.

Technology and system design goes to the heart of what Dyson is all about, and the whole company including treasury actively seeks state-of-the-art solutions. “We are continually striving to improve our treasury practice,” says Coghlan. Currently she is reviewing the company’s cash management strategy particularly around bank connectivity and electronic bank account management (eBAM), and is effectively creating a roadmap for the next three to four years.

At present, the company has six transaction banks, with almost 80% of activity going through just three of them. Coghlan would like to consolidate still more but admits that one bank is too few – reflecting a consensus most corporates reached after the recent financial crisis – whereas six is too many. “Today we are putting in place the building blocks that will help us achieve Nirvana – which is greater efficiency.” To reach enlightenment will take a full and frank discussion with their banks and technology providers, she argues.

Coghlan believes that for corporates the issue is more about internal efficiencies, and less about transaction banks and their specific offerings per se. “Today we handle five or six different file formats. So the strategic question is whether we continue maintaining all these formats or not. Do we put in an overlay or use XML file formats for everything?” She adds that XML is not a panacea, only solving about 80% of the format issues for corporates.

Even a relatively small multinational company (MNC) like Dyson finds it challenging to manage the many different formats, especially when it comes to documentation. Coghlan was surprised that she had to push for standardisation with her banking partners because it wasn’t a “given” that the company would want that.

Data collection and manipulation continues to be an issue for Dyson, as for most corporates.  “We usually receive data from our banks in a PDF instead of Excel, for example, which means we need to re-key it before we can use the data,” she explains. This manual process potentially introduces errors, as well as tying up valuable resources.

At the end of the day, Coghlan wants two things from her banks:
  1. To know that the solution that she chose after a request for proposal (RFP) process and put in place is actually doing what it is supposed to be doing.
  2. To have confidence that they will come to the regular six-month meeting with targeted suggestions as to how to improve the business.
“I am looking for a simple and efficient way to do transaction banking, with the bank providing a value-adding service,” she concludes.

This insight was first published on www.treasurytoday.com

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