Act, 020212 final
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Transcript of Act, 020212 final
Chris Skinner
www.thefinanser.com
Corporate2BankRelationships –
Brilliant or Broken?
Interactive Vote
Do you think that, since the crisis began in 2008, the Corporate-Bank relationships you are engaged with are:
1. Better?2. Same?3. Worse?
Corporate2BankRelationships –
Brilliant or Broken?
Past
• Global platforms• Payment Factory• Supply Chain
Management• Working Capital• IFRS vs GAAP• Bank consolidation
• Open Account vs Letter of Credit• SEPA• e-invoicing• Treasury metrics /
treasury workstation
• Standards
Present
• Cash management• FX: Remnimbi v
Dollar • Eurozone • Hedging strategies• SEPA end-date [1 February 2014 ]
• Regulatory change• Risk management• Cloud services• Real-time
forecasting• XML
PwC Treasury Survey 2010• Nearly 80% of participants believe that the financial crisis
has won them greater boardroom attention.• Nearly 70% of participants believe that the crisis has
highlighted the value they create within the business.• Only 20% have secured extra resources as a result of the
crisis.• More than 70% of participants are keen to sustain a long-
term portfolio-style relationship with their bank, though 60% believe their banks would prefer an individually profitable transactional approach.
• The proportion of participants rating cash management and working capital management as highly important has more than doubled (from 35% pre-crisis to more than 70% during and after).
• Risk management tops the list of priorities for the future.
Top 10 risks for 2012(2010 results)
1. Macro-economic risk (4)2. Credit risk (2)3. Liquidity (5)4. Capital availability (6)5. Political interference (1)6. Regulation (3)7. Profitability (-)8. Derivatives (7)9. Corporate governance (12)10.Quality of risk management (8)
Source: PwC Banking Banana Skins 2012
FutureEconomicPolitical Social Technological
Dodd FrankVolcker RuleDurbin AgreementVickers ReportMerkozy EurozoneEast-West China divideUS elections (2012)French elections (2012)UK elections (2014)
Eurozone uncertaintySovereign debt issuesRemnimbi vs DollarCIVETS / Growth8New AfricaRussia WTOChina inflation bubbleChina 2018 or 2047India post-2020
Global gossipingCrowdfundingSocial financeOccupy Wall Street etcWikileaksAnonymousGlobal connectivity 1:1New economiesVirtual currencies
MobileContactlessTablet PCsSocial networkingSocial mediaAppsConnectivityChips in everythingWireless touch
Change VisionBoring banking vs casino capitalismNew regulationsNew economiesMicromoneyHybrid value managementGlobal currencies (Bitcoin)
• Products are apps, manufactured in such a way that customers can put them together to suit their lifestyle.
• Processing is open sourced, offered to anyone to plug and play with their offerings through APIs.
• Retailing is based upon competitive differentiation through big data analysis to deliver contextual personalisation.
The real issue =
complexity
“Even the financiers themselves couldn't understand the implications or robustness of the financial derivatives they were trading, or even how to properly price them.”Prophets Against Profits? What Occupy Wall Street
Misses
OTC Derivatives
Commercially robust versus speculative
trades?
FX hedging is key
What does a bank need to
do?
Barclays Treasury Survey 2011
Barclays Treasury Survey 2011
“There is a clear message here for banks: in order to be the risk management partner of choice, banks need to distinguish themselves through more than just price. Corporate treasurers value ideas and quality of coverage.”
Strategic
Tactical
Long-term
Short-term
Staff
Supervisory
Management
Executive
CEO
Physiological
Safety
Belonging
Esteem
Self-Actualisation
Trusted Advisor
Strategic Partner
Preferred Supplier
Solutions Provider
ProductVendor
Future
• Dealing with uncertainty
• Finding returns through growth markets
• Managing stagnant or contracting old markets
• Recognising market failures and issues
• Knowing and managing risks
• Getting good advice
Does your bank care about
your business first and theirs
second?
Interactive Vote
Does your bank care about your business first and theirs second:
1. Yes 2. No3. Abstain
Chris Skinner
www.thefinanser.com