At a breakfast roundtable in Singapore in July, Lenovo Treasurer Damian Glendinning was clearly outgunned. There were six transaction bankers from ANZ, Bank of America Merrill Lynch, BNP Paribas, HSBC, OCBC Bank and Standard Chartered Bank.

 

Rounding out the attendees were two executives from Progress Software, which sponsored the event organised by Enterprise Innovation, CFO Innovation’s sister publication, and Martin Fitzpatrick, Executive Director at J.P.Morgan, who previously dealt with transaction bankers as Southeast Asia director for finance at Microsoft a year ago.  

 

Glendinning, who is also president of the Association of Corporate Treasurers in Singapore, more than held his own. “If you look at history going back 20 years now, everybody was busy building an electronic banking system as a means of trapping the customer – um, sorry, building customer relationships which just happened to depend on using the bank’s system that will only work with the services provided by that bank,” he said puckishly. “This has gotten in the way of the development of truly modern cash management solutions.”

 

The result has been “a complete nightmare” where companies ended up using two or three banks (because, among many reasons, not one bank covers all the markets where the corporation operates) – and “nothing talked to each other,” said the treasurer. “When they tried to build connectivity between the banks, you got into a situation where one bank refused to receive electronic communication on another bank’s behalf.”

 

Some companies have paid “a fortune” for an accounts receivable matching system, Glendinning went on. But they get only 90-95% accuracy. “C’mon, guys,” he said. “In this day and age, should we be operating this way? . . . I think if we sit around this table and take a look at how efficient we can make all the data transfers, I would submit that there’s a gross underutilization of the technological capability.”

 

The discussion was actually more good-humoured and balanced than the above salvo would suggest. Indeed, the picture that emerged was one of unprecedented internal and external challenges for both clients – CFOs, treasurers and others in finance – and their banking partners. .

 

Asked Paul Zanker, Senior Vice President and Global Business Solutions Executive at Bank of America Merrill Lynch: “Who hasn’t had a conversation with a client that is a) upgrading an ERP platform, b) putting in a new Treasury Management System, c) putting in a Shared Service Centre or some kind of back office, d) looking at standardisation and trying to rationalise all their bank accounts?”

 

Any single one of those transformations, let alone a combination of two or three or all of them, can drive huge changes across the enterprise. “The question is how to provide a solution to the client that absolutely meets their needs,” suggested Zanker. “Clients want solutions to deliver better, faster and cheaper than before. ‘Don’t sell us product. We want a partner that will help us grow.’”

 

The banks say they are trying to respond. “We have actually moved away from product sales to a working capital sales model,” said Samuel Mathew, who is Regional Head, Transaction Banking – SEA at Standard Chartered Bank. “One sales person looks after and understands the financial ecosystem/supply chain of the client, their suppliers and buyers, assessing the terms of trade and which markets they are in, etc.”

 

But there is a sense of uncertainty about how well they are doing. “I’m still scratching my head,” admitted another banking participant. “Getting somebody who’s been a very product-focused person to suddenly sit down and say, let me understand your industry, let me understand your business, let me understand your risks and challenges – that is quite a sea change . . . How the bank will do it I don’t have the answer yet.”