Converting cash into a truly liquid asset with Virtual Accounts

Converting cash into a truly liquid asset

Section 1:

67% of clients have established automated cash concentration, either single or multi-currency

For Clients with revenues less than $10bn, 54% have a cash concentration arrangement.

For Clients with revenues in excess of $50bn, this proportion reaches 86%, and growing.

Section 2:

The remaining clients are relying on manual fund transfers, which may be hampering their ability to consolidate and recycle cash within the group.

Section 3:

We see growth and opportunity in the next generation of Virtual Accounts, that can be used for both payables and receivables.

Benefits – account rationalization and

Immediate consolidation and usability of cash into the “Header” account

Efficient recycling of group cash

Section 4:

Mobilizing cash around the globe

·         To seize the opportunities offered by virtual accounts, close to 25% of our clients with revenues exceeding $50bn have or are implementing Virtual Accounts, with growing momentum across the broader industry including enterprises in Asia Pacific.

·         Amongst the clients that have a cash concentration or a Virtual Account set-up, approximately 20% globally are taking advantage of a Notional Pooling structure, to efficiently manage the trade-off between FX for funding vs. strategic FX execution and thereby optimize transactional expense.

·         Although Multicurrency Notional Pooling is not market practice in the US – a single currency market – the proportion of client adoption increases to 30+% for our Clients based in the North American continent, typically leveraging a structure based in Europe and/or Asia Pacific for this purpose.