Cash Management: New Trends Finance Should Know

by Cesar Bacani, 14 July 2011

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topics:
Cash and Liquidity Management

tags:
cash management Citi inter-operable banking platform Sandip Patil shared service centres SWIFT treasury management

In his 15 years with global bank Citi, Sandip Patil has worked in multiple markets across Asia, including India and Thailand. As the bank’s Managing Director and Region Head, Asia Pacific, Payables and Receivables, he has been assigned to Citi’s regional headquarters in Hong Kong for the past seven years.

“There is a lot that’s happening in the market, practically every year, and even more so in Asia,” he says. Among them: the evolution of shared service centres and inter-operable banking platforms, including a new corporate-to-banks service by SWIFT (Society for Worldwide Interbank Financial Telecommunication).

In Part 2 of a three-part interview session with CFO Innovation’s Cesar Bacani, Patil discussed these and other issues. Excerpts:

Is setting up a shared service centre (SSC) part of the service that Citi and other global banks can do for a company in Asia?

Adopting the SSC model to provide different parts of an organization with services from one or more central locations entails extremely complex organizational changes. You need internal buy-in from stakeholders on the business requirements. It also involves systems, operations, processes, regulatory compliance, organizational changes etc. All these are best managed by the corporate organization.

And an SSC doesn’t necessarily have to deal only with banking. When you’re establishing an SSC of the purchase-to-pay-cycle, banking is [only] one component of the entire gamut of activities. You’re going to suppliers, you’re looking at the kind of products they’re selling, establishing contracts, giving purchase orders, taking invoices and creating tables. These are relatively non-banking activities.

However, banks normally offer advisory services to assist clients in achieving their operational aspirations. We do this by sharing concepts and insights on process efficiencies, as well as identifying opportunities for clients to transform their process and optimize their cash conversion cycle. Banks do have insight into the processes of many of their clients and experience from operating their own shared-services centers.

In Citi, we have a consulting team which runs diagnostic questionnaires with clients to help them assess process efficiency/maturity and perform peer benchmarking, as well as gather latest industry trends, best practices and other relevant information for sharing with customers.

I asked because I know Citi was among the first to adopt shared-services structures for its internal operations and I imagine you would know a lot about what works and what does not.

We were the first one to create a shared service centre in the banking industry. There are a lot of centralisations we have done out there. It’s using technology as an enabler. We are the first users of emerging platforms for banking applications.

Citi created shared services centre-type concepts in India, in which we’re servicing the consumer side of the business as well as the corporate side of the business. This was in the 1990s and we ended up centralizing many of our consumer banking activities globally to our SSC in India. A lot of support services for credit cards and consumer banking units are supported out of our SSC in Chennai.

We created a separate legal entity and took it public. In 2008 it was sold to Tata Consultancy Services (TCS).

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