Professional Documents
Culture Documents
3 Bank Relationship Management 2024
3 Bank Relationship Management 2024
Management
Bankers and Treasurers
▪ But banks provide a much wider set of critical services to corporations and
consequently, Banking Relationship Management is a key component of
Treasury
▪ Despite a significant disintermediation in the past decade and probably more to
come, Banks remain key partners
▪ In addition, as many regulated industries, Banking Industry is shaken by many
technical innovations and new entrants
▪ Treasurers needs to understand a minimum of the banking world to be able to
maintain the most mutually profitable relationship with their Bankers.
© Alain Rividi
– forum of discussion and establishment for the BASEL III prudential rules
▪ 6. Private Banks
© Alain Rividi
▪ Specialized:
– Tend to specialize in a small portion of the product scope or customer set
– May use partner banks to provide additional services
▪ Lazard et Cie higher end financial engineering
▪ Bank Mendes Gans: sub of ING group specializing in a specific cross border cash management
practice.
© Alain Rividi
▪ Caisse d’Epargne dealing mostly with individual customers and very small entreprises
▪ Will partner with more global players to support their customers needs
15 A. Rividi, Corporate Liquidity Management, January 2024
© Alain Rividi
▪ Funding
– Banking Loans on various terms from overdraft to long term
– Supply chain finance
▪ Market activities
– Forex, Interest rate, investment, …..
▪ Trade finance
– International trade instruments (documentary credits, trade insurances)
© Alain Rividi
▪ Investment banking
– Support and advisory for LT debt (Bonds) and Equity transactions
21 A. Rividi, Corporate Liquidity Management, January 2024
The Bank Account
▪ The bank account is the main interlock instrument between bank and customers
▪ Note:
– A bank account is a customer account in the bank’s books
– A bank account is a vendor account in the company’s books
➢ What our accountants view as a debit is a credit for a Treasurer
▪ Companies will usually use several bank accounts with a given Bank
Head
30
+200 +50
150
▪ KYC >> Know Your Customers, process by which the Bank is required to ensure they have
a thorough knowledge of who their customers and the customers attorneys are:
– Details of the legal entity
– Beneficial ownership >> who s the real owner
– Company directors, officers, and attorneys
▪ Who are they
▪ PEPS or related to PEPS ?
▪ Proof of identity and residence
▪ Issues
– Delay in the process
– Issues of data privacy
– Resistance of employees
© Alain Rividi
The Bank Mandate is the aspect of the documentation most critical and relevant to
the Treasurer:
▪ The Mandate defines who can do what and under which conditions from the bank account
– Authority to perform activities from the account
– How many signers for each activity
– Limitations
▪ While the other contractual elements are relatively stable, the Mandate will change every
time the personnel will change in name or in role.
– This may be a significant workload
▪ Forfait fees: Flat sum covering a type of service for a period, may be revised based on
actual volumes
▪ Float pricing: uses value dating, credits are accounted later, debits sooner, bank makes
money on the float
– Decreased importance in the very low interest rate environment
© Alain Rividi
▪ Technology is helping
– TMS tools usually provide some tracking and valuation capabilities
– New tools are being developed allowing automated reconciliation (TWIST BSB project)
© Alain Rividi
“If you have a financial interest in or signature authority over a foreign financial account, including a
bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the
© Alain Rividi
Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by
filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).”
38 A. Rividi, Corporate Liquidity Management, January 2024
Step 1 Define Policies
▪ Strict adherence to Policy is a prerequisite to the next step: “Know your Bank
accounts”
© Alain Rividi
▪ Additional benefits
– Communication tool with the various users
▪ Various Treasury players,
▪ Customer Fulfillment,
▪ Accounting
© Alain Rividi
▪ Standardization of:
– Bank mandates,
– Signatories nomination forms,
– etc..
▪ Banking industry has seen a number of new trends popping up in the past few
years
– Appearance of new players
▪ Neobanks
▪ PSP
▪ Fintechs covering a wide range of banking functions
– New constraints
▪ Increase regulatory weight (AML, KYC, MIFID/MIFIR,…)
© Alain Rividi