Cash and Trade - Like Mixing Apples with Oranges

There has been much written regarding the convergence of cash and trade to benefit the banks’ corporate clients.

The benefits are real, banks delivering cash and trade has not been real.

The corporate CFOs are challenged with a never ending quest of optimizing their capital. Over the last few decades great strides have been made on operational efficiencies for the physical supply chains. The need for optimizing globally the financial impacts have increased. This focus is now on the financial supply chain and the impacts to corporations is driving them to push their banks to provide the benefits of merging cash and trade.

The image comes to mind of a bowl of apples and oranges. For clarity, cash and trade remain separate silos inside the bank.

Can mixing apples with oranges deliver on the promised benefits while staying true to their distinctive taste differences? How can corporations benefit as well as how can banks deliver benefits? It will take a cooperative realization to make the shifts in approach that are needed to reap rewards.

For the trade people, their transactional base and documentary experience needs to be combined with the cash management professionals’ thought process for optimizing the overall corporate portfolio. Corporations need to go from initiating a trade transaction to checking for settlement to pulling specific reports all in the same view. Maybe cash and trade can get along after all.

The work needed is to mix the “show,” with the “go”.

The following are the points that explain how cash and trade integration can give corporations needed benefits.

• Start with a single access point like a secure portal or dashboard.
• Initiate trade transactions that feed transactional information for Cash, FX and Payments actions.
• Combine cash and trade information in real-time user configurable reports.
• Provide mobile banking and two-way messaging for corporate actions.
• Add in EBPP (Electronic Bill Presentment & Payment) and e-invoicing services off of a trade transaction, based on either the buyer or seller.
• Connect to the banks FX system.
• Provide banks with the option to offer financing.

The call is for vendors to step up to deliver a corporate enterprise-wide initiation solution. Thinking must change from building and selling products to offering solutions. They must be flexible and modular to deliver business personalization that addresses the multiple models needed for large, medium and small corporations.

The challenge for banks is to realign their transaction banking business model from siloed to a unified corporate offering increasing automation along with leveraging their clients informational gold that the bank has access to creating a more personalized user experience.

The key is providing the kinds of information-rich relationships that corporations need today. In the new world order, cash and trade together can thrive, benefiting both bank and corporate.