The Future of Cash Management

These are interesting times for cash management. Traditional business models, for clients and their partner banks, are evolving, with digitalisation a core driver. This is occurring at a time when macroeconomic factors, including the effects of the continuously evolving COVID-19 pandemic, as well as the systemic low and even negative rate environment are putting a further strain on businesses. So what does the future hold for cash management, and how is Deutsche Bank meeting these needs? TMI speaks to Ole Matthiessen, Head of Cash Management, Corporate Bank, Deutsche Bank to find out more. 

Eleanor Hill (EH): Which macroeconomic factors would you say are having the most significant impact on cash management today?

Ole Matthiessen (OM): Liquidity is one of our clients’ most precious assets. However, cross-border transactions, different time zones, varying local banking practices and regulatory environments can make it difficult to utilise liquidity effectively. Macroeconomic factors throw an extra spanner in the works.

The euro interest rate environment represents a severe cost pressure for all our clients. The decision to boost the European economy by taking interest rates below zero in 2014, followed by further cuts in recent years, primarily affected the financial institutional client base, to begin with, at least.

Given the dramatic change in outlook for the euro interest environment over the past 12 months, however, it’s fair to say that negative interest rates are here to stay – and this has made it necessary for banks to reconsider their euro strategy across all client segments, impacting treasurers in the process. We have been very open and transparent around this and have begun to pay our clients market rates – as have our competitors. While this means our clients now face negative rates, we have provisions in place to help offset this.

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