Thursday, September 22, 2011
Sponsored By
Bank Payment
Obligations Need
Better Framework To
Match LCs
Bank Payment Obligations offer the promise of faster payment and reduction or elimination of paper documents-with the security of a letter of credit. But BPOs must still go through a great deal of working out before they will offer the full benefits of a traditional LC. One issue is ownership of the instrument, notes GS Subramaniam, senior vice president at Reliance: "If a BPO will substitute for an LC, then the beneficiary should own it." Under rules now in development by the International Chamber of Commerce, that is not the case, he notes. Only the bank can be the beneficiary of a BPO, he notes, which ties the company to that bank. This could affect the cost of funds, he says.
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Building a Business Case For New Technologies
Building a strong business case for initiatives such as SWIFT and shared services is a key challenge for treasurers, according to panel participants at Sibos. Garry Young, director of corporate services at Logica, says: "Corporate treasurers need help from their banks in articulating the business benefit." That business case is driven just as much by qualitative factors as by quantitative results. A number of corporate panelists at Sibos on Wednesday said that they were now including SWIFT connectivity in each banking RFP for new countries.
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Sponsor's Statement
Scotiabank is one of North America's premier financial institutions and
Canada's most international bank operating in more than 50 countries. With
over 70,000 employees, Scotiabank Group and its affiliates serve
approximately 18.6 million customers across North America, the Caribbean,
Central and South America, Europe, the Middle East, and Asia.
Through Global Transaction Banking, we provide financial solutions including
cash management, payments, trade finance and correspondent banking services
to meet the needs of financial institutions? commercial and corporate
customers worldwide. We can also be your end-to-end supply chain partner by
offering customized integrated business banking solutions.
Count on us to meet your needs in the markets where you do business.
Cemex Improves Control Of Bank Connectivity
In a matter of a week, Cement company Cemex can change connectivity from one bank to another through its SWIFT connection. So notes Fausto Sosa de la Fuente, design leader, processes, VP, at Cemex. He says that you must be engaged and understand all of the underlying benefits, rather than simply allowing IT to drive a SWIFT initiative. De la Fuente says: "Now I can commit that in a period of one week I can switch banks and the other bank [counterparty] won't even notice."
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Increase Cash Visibility And Reduce Risk With Payment Factories
Reducing costs is not the key driver for moving to payment factories and other shared service environments, according to a survey out by consultancy Logica and EuroFinance Research Services. The survey of European multinational corporates found that the key reasons that companies centralize payments or collections in a shared service center are much more qualitative. Most said they want greater visibility of cash (80%) and see it as a way to reduce risk and increase internal control (58%).
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