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Treasury Management in France As in the rest of Europe - and, indeed, the world - the role of the corporate treasurer in France is changing. Emmanuel de Resseguier, Head of Global Transaction Banking France at Deutsche Bank, explains how it is changing and how the behaviour of treasurers has changed since the economic crisis. Additionally, this article examines how the developments in corporate-to-bank connectivity are affecting the provision of cash management and treasury services, and how the roll-out of SEPA and the implementation of the PSD is progressing in France.

Treasury Management in France

As in the rest of Europe – and, indeed, the world – the role of the corporate treasurer in France is changing, says Emmanuel de Resseguier, Head of Global Transaction Banking France at Deutsche Bank

Within French corporates, how has the role of the treasurer changed over the past 12 to 18 months?

As is the case in all European jurisdictions, the role of the corporate treasurer in France has grown in importance in recent years. While this was a trend that was developing before the onset of the recent financial crisis – thanks to changing ideas regarding best practice in cash management and the increasing integration of this area with financial supply chain management – recent events have brought efficient liquidity management to the top of the agenda for many corporates.

The elevation of liquidity management to a boardroom-level issue in many organisations has resulted in a greater focus on the role of treasury and has made it imperative that the treasurer has comprehensive access to real-time information regarding all of a corporate’s transactions and cash positions. Access to this information ensures that internal sources of funding can be optimised and facilitates the unlocking of cash trapped in inefficient processes.

And how has the behaviour of treasurers changed since the crisis?

While some – especially larger – corporates already had cash pooling or similar centralised liquidity management structures in place, many others are now rushing to implement these models. And for those that may not have the geographic scope to justify such a structure, increasing visibility through using the latest electronic banking platforms can still yield significant benefits.

Indeed, a related area that has garnered a lot of attention in recent years has been the financial supply chain. There are two principal drivers behind this. First, many corporates have become increasingly aware of the importance of the ongoing financial health of their suppliers. Indeed, in some specialised industries the failure of a key supplier could be critical to the survival of corporates further up the production chain. Second, after many years of focusing on efficiencies in the physical supply chain, there has been a growing recognition of the benefits that are available through more actively managing relationships with suppliers. On the one hand this involves negotiation over payment terms and ensuring that key suppliers have enough breathing space in terms of working capital, but it also often involves the adoption of electronic platforms that can manage invoices and payments, as well as initiating financing opportunities.

How are developments in corporate-to-bank connectivity affecting the provision of cash management and treasury services?

This is currently a real issue for many French corporates. At Sibos 2008 it was estimated that over 90,000 French corporates would have to switch from ETEBAC (Echange Télématique Entre Banques et Clients) – the French corporate-to-bank reporting protocol – to either the ISO20022 SWIFT standard or the Electronic Banking Internet Standards (EBICS). In this respect, those banks that can quickly and efficiently support these changes will likely be the winners in this space.

In fact, the gradual spread of EBICS outside Germany, its original market, is an interesting development. With this protocol gradually being adopted in France and elsewhere, it is beginning to present a challenge to SWIFT, and some suggest it could be the future of corporate-to-bank and bank-to-bank communications.

Originally developed by the German banking community, EBICS is based on corporates registering each bank they want to use, and then the system functions through an exchange of keys. While EBICS is certainly viable and considerably cheaper than SWIFT, it is yet to be seen how much it will grow in popularity outside France and Germany. And, unsurprisingly given where the system was developed, Deutsche Bank can offer full EBICS connectivity as well as the more traditional SWIFTNet channels. Indeed, Deutsche Bank is committed to fully integrating the SWIFT channel with its offering. In this respect, Deutsche Bank and Syntesys, a leading SWIFTNet service bureau in Europe, have recently formed a non-exclusive partnership with the aim of promoting, expanding and maintaining SwiftNet solutions for corporate customers in Europe. This agreement will start initially in France and then will be rolled out to Switzerland and Germany.

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