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Become a Treasury Superhero by Improving Bank Relationships

  • By Dan Gill, CTP
  • Published: 3/15/2016
superheroShrinking teams and constant information requests leave treasury professionals focused more on efficiency in the tasks assigned and less on the larger duty of managing risks and controlling costs. However, motivated treasury professionals with a few hours’ investment can systematically work through their banking relationships, leading to greater control, reduced cost and greater efficiency.  

Changing it up

Time and again, I have seen motivated individuals on treasury teams conduct an analysis of their bank fees and find great success. Be methodical in your approach. Rationalize all of your banking services to ensure you are buying the right one. Next, apply standardized AFP Service Codes to all of your services, which allow you to aggregate and compare services across banks.  

View fee reduction as a means to an end. Every account is a source of cost and exposure, and every person that has authority over an account is a point of risk. Focus just as much on the risks in your bank relationships as you do on the efficiency of your cash flows. If you break your risks down between internal and external, you can build a workable project that is easy to manage. Focus on the internal processes you use to manage your inventory of accounts. Develop a solid set of business processes that can be enforced.

Finally, you will get to a place where you can begin to tackle perhaps your greatest challenge: synchronizing the banks’ view of your accounts. We all seem to know that the gap between our records and the banks’ records is wide, but how do we close it? Electronic Bank Account Management (eBAM) is a tool that gives treasury professionals a way to communicate, validate and confirm changes to bank accounts.

SWIFT eBAM in its current form allows the treasury user to communicate account openings and closings, send account updates and request information to synchronize the bank’s records with the company’s records. Most of the tier one U.S. banks are capable of communicating via eBAM and a number of corporate treasury groups are using it to communicate. As both the number of banks and corporates using eBAM increases, it will continue to gain momentum and even increase in capabilities. I believe the result of this will be a push from our auditors to include eBAM as a part of our controls infrastructure.  As usage increases and capabilities grow, it will also add even more efficiency to our management of banking relationships.  

Lay out your plans, achieve some easy wins, and you can become a treasury superhero.

Dan Gill, CTP, is vice president of Weiland Corporate Solutions, a part of Fiserv. Gill has worked in corporate treasury for 18 years, focusing exclusively on helping corporations effectively manage their bank accounts and bank fees. Gill is teaching the upcoming eBAM and Managing Banking Partners virtual seminar.

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