In today’s complex and fast-changing business landscape, it is more challenging than ever to stay ahead of the curve. Many CEOs agree that we are living in a period of unprecedented flux that will have significant effects on the future of their companies.
KPMG’s 2017 Global CEO Outlook – a survey of nearly 1,300 CEOs in 10 of the world’s largest economies – highlights disruption and uncertainty as unavoidable realities all businesses must face today.
But the same survey reveals that 65 percent of corporate leaders view disruption as a business opportunity, not a threat. To identify opportunities early and minimise uncertainty, most CEOs are doing their best to stay attuned to shifts and trends, with 64 percent saying they are effective at sensing market signals.
In today’s market, businesses need to be more forward-thinking, vigilant and agile than competitors to stay ahead and plan for future growth. To do this, companies can benefit from working with an innovative commercial bank that has a vision for the future and will help them in three essential ways.
For some companies, key business functions are managed from a single headquarters with secondary support from local satellite branches. For others, that approach has shifted, as many business leaders see the importance of maintaining a balance between having both a clear global strategy and an appropriate on-the-ground regional presence or coordination.
This is becoming even more critical given foreign exchange rate volatility, interest rate variability, evolving compliance requirements, expanding counterparty risks and changing geopolitical risks.
An effective commercial banking partner should deliver practical support and intelligence to help an organisation identify and support the optimal geographic structure for its treasury function and financing strategy, which will enhance competitiveness today and fuel growth for tomorrow.
The majority of corporate leaders view disruption as a business opportunity, not a threat
A company’s approach should be consistent with the overall global business strategy as well as individual market strategies, tailored to economic and liquidity conditions and compliance developments.
A commercial banking organisation should serve as a thoughtful advisor to the treasury team, drawing on its experience, technology and knowledge of best practices to recommend the best treasury function system and supporting cash management solutions.
Doing so maximises a treasurer’s visibility and control, produces accurate reporting, and enables a team to establish internationally reliable treasury forecasts.
This includes deciding whether to centralise the treasury function in one location or decentralise it across regional hubs, considering a company’s business strategy and objectives, size, budgets and other key factors. A banking partner should always adapt to a business’ model and goals, not the other way around.
With BNP Paribas as our parent company, Bank of the West taps into an expansive global network and international cash management offering to help mid-sized and large companies set up an effective treasury footprint and supporting solutions around the world.
This includes: helping our clients increase control by unifying their treasury function and liquidity in the US and across the world; implementing cash management solutions across their global footprint; establishing a treasury centre in a particular region; or setting up an integrated treasury structure across a large group of countries.
For example, we worked with a leading global company that has a US headquarters and a presence in more than 40 countries, including 24 countries across Europe, the Middle East and Africa (EMEA).
In addition to helping our client control and secure its cash, our primary goal was to help them strategically pool its EMEA liquidity and manage one currency position in euros.
We helped the company centralise its EMEA liquidity in a single regional location and implement a multi-currency solution in one European market with all its EMEA entities participating.
Guarding against cyber threats
As companies focus more on innovation to gain a competitive edge, there is more emphasis on speed. Consumers want to obtain information, take action and receive products and services quickly.
This puts pressure on companies to speed up their processes in order to deliver products and services faster than their competitors.
We take a holistic approach to fraud prevention, maintaining open communication channels with law enforcement organisations so we stay aware of developing risks and educate our clients about them in real time.
Cybercriminals are trying to take advantage of this speed-focused business environment by finding gaps to access a company’s sensitive information and systems. It is a grim reality that a cyberattack is now a strong possibility for all businesses.
Executives understand this new reality. According to PwC’s 2017 20th CEO Survey, which polled 1,379 CEOs across 79 countries, 91 percent of corporate leaders believe cybersecurity breaches affecting business information or critical systems will have a negative impact on stakeholder trust levels in the next five years.
Furthermore, 61 percent believe cyber threats will pose dangers to their own organisation’s growth prospects.
An effective corporate banking partner should equip the leadership team with decision-making tools and information that enable a business to move quickly while staying as secure as possible.
This includes delivering treasury solutions that are transparent and time-effective, protecting a business’ cash flow, and individual transactions. In terms of payables, multi-level authentication and tools such as Positive Pay are essential protective measures to ensure not only the accuracy of the transactions, but also the accuracy of the settlement of those transactions.
Though these features add more steps to a treasury process, any trusted banking partner will recommend them as must-haves to guard against mounting cyber risks.
One specific trend that has been gathering steam is cybercriminals hacking into identities within the C-suite, posing as an executive through an email address that appears to be authentic but is really ‘masquerading’.
This can take many forms: criminals can hack into companies’ email systems or pretend to be senior executives or direct employees to make fraudulent financial transactions. They instruct the employee that these are important and create urgency around the request.
The employee may follow through using typical processes to initiate the fraudulent transaction. Criminals may also send a direct instruction to their bank partner with similar urgency, instructing them to go around defined processes such as multi-level authentication.
Bank of the West works with our clients to thwart such fraudulent attempts, training our entire support team on how to identify and protect against these threats.
Being a forward-thinking organisation
With so many businesses focused on innovation to capitalise on new trends and enhance competitiveness, an effective banking partner needs to be dedicated to delivering tools and data that help an entire organisation be more forward-thinking and proactive, not reactive.
This includes using a company’s historical data and industry information to do smart predictive modelling that more accurately predicts businesses’ future cash flow needs in an evolving landscape. The goal is to help treasurers plan more effectively by maximising the value of data.
Bank of the West takes a progressive approach. We are positioned in the heart of the tech industry, which offers insight into key market innovations. Our treasury team is constantly analysing these market innovations, industry benchmarks and segment-specific trends, and employing predictive modelling to offer the best financial solutions for growth.
We understand the significance of the client’s historical transactions, but to truly help our clients plan for the future, we also focus on the future: we present new solutions and strategies they can adopt to position their organisation more optimally for future growth and keep pace with industry changes.
For example, real-time payments with real-time settlement and information are emerging as a new payment type that is changing the dynamics of treasury management, enabling businesses and consumers to send and receive payments instantly and directly from their accounts at financial institutions.
As an owner bank of the Clearing House Association, Bank of the West is very involved in the real-time payments initiative currently in development. On the consumer side, Bank of the West also participated in this year’s pilot of Zelle, a new person-to-person payments network in the US that enables 86 million users to move funds in minutes.
We are now speaking with our commercial clients about whether real-time payments could benefit their business today, or in the future, so they can prepare for its arrival across their footprints.
Being part of the BNP Paribas network enables us to look at our clients’ operations in the US and around the world, and discuss how specific innovations can be applied across regions.
In a rapidly changing world, a strong commercial banking partner can serve as a company’s industry advisor, sharing and supporting the use of innovative solutions, keeping a business ahead of the curve.