Multinational corporations on the fast track to reducing operational costs eventually face a crossroad. Take the easier route of immediate cost reduction by disbursing work to lower-cost processing areas company wide, and the path eventually slows to flat or diminishing returns.More»
One simple but effective strategy for efficiently handling subsidiary transactions is the implementation of an offshore account approach to managing payment inflows and outflows. This is a powerful solution for many multinational corporations and helps avoid or reduce foreign exchange transaction costs, reduces risks and improves operational efficiency.
Global corporations are on a mission to simplify. Multiple banking interfaces across their growing networks of banking partners are overly complex to navigate and often inefficient to operate. Financial institutions vary in how they connect to their corporate clients, format financial messages, and allow cash to be moved and managed across their banking networks. Corporations also face considerable difficulty coordinating multiple bank accounts that require different communications channels, contingency arrangements and security standards.
Q&A with Lillian Sim, Asia Pacific Head of Multinational Corporate Sales, J.P. Morgan Treasury Services
Nearly five years after the recent Great Recession, corporations are still haunted by some of the same pitfalls and risks that preceded the crisis. Corporate treasurers continue to juggle unprecedented amounts of cash across multiple, potentially risky bank counterparties and invest these funds based on stale investment policies with sometimes inflexible limits. Despite improvements in technology, treasurers’ task of funding ongoing business and taking advantage of opportunities for growth is becoming more challenging as cash is spread over more and more countries and banks. It is vital for corporate treasurers to reevaluate their investment policies to ensure effective visibility and governance.
The Global Financial Crisis of 2007-08 saw major pressure on treasuries to maximise their use of internal liquidity, but finding ways to accomplish this has always been a concern for Asian corporates operating in a highly regulated region. Nevertheless, the visibility, control, efficiency and accessibility needed to achieve this can all perfectly intertwine - if corporates have the right strategy and tools.
As Indonesian companies expand into new markets and as regulatory requirements continue to grow, financial institutions in Indonesia need to leverage new solutions and global expertise to manage their business better, amidst increasingly dynamic and volatile economic conditions.
As an increasing number of global and Asian-headquartered multinationals (MNCs) begin to manage cash out of Asia rather than New York or London, developing the right structure for their Regional Treasury Center (RTC) is essential and setting up the RTC in a business-friendly location like Singapore offers a multitude of advantages.
Amidst rapid change across the payments landscape, growth in the global foreign exchange market and a greater focus on reducing risk, corporates are looking at how best to simplify their international cash management processes end-to-end, in order to increase efficiency, reduce cost, free up resources and improve visibility. Leading banks are developing solutions not just to assist corporates with managing and integrating foreign exchange and payments effectively, but also to help them analyze the right metrics and benchmark against peers so they can develop a roadmap for superior performance.
With constraints on cross border payment processing and ongoing regulatory changes in China, multinational corporations (MNCs) are applying payment and treasury center best practices to enhance payment processing efficiency, and manage foreign exchange (FX) risks more effectively for Renminbi (RMB) cross-border transactions.
With change being a constant in the Renminbi (RMB) clearing market, financial institutions domiciled outside of Greater China will be challenged to determine the best approach for market entry. This article provides insights for financial institutions looking to navigate the RMB environment and developing a clearing strategy.
China’s slowing economic growth has implications that extend far beyond its domestic borders. Key trading partners in particular seem vulnerable to the knock-on effects of reductions in imports or exports. In the case of Brazil and Chile, however, concerns about potential economic disruption seem misplaced.
By July 1, 2014, J.P. Morgan will launch an enhanced operating model in response to FATCA regulatory requirements.
Protracted global economic uncertainty and ongoing regulatory change make this a challenging time for financial institutions engaged in trade finance. In addition to these external headwinds, banks face an uphill task maintaining profitability amidst a volatile operating environment and rising operating costs. In spite of this, growth opportunities exist.
SMALL- AND MEDIUM-SIZED BANKS generally prefer to market their traditional trade offerings – products like letters of credit – while larger banks often aim at fulfilling the supply chain finance demands of their corporate customers. As a result, there is a remarkable lack of focus in marketing one of the most exciting innovations in Trade Finance: the Bank Payment Obligation (BPO). Why is this?
As usage of Renminbi (RMB) for trade settlement gains traction, there is considerable interest amongst corporates and financial institutions about whether and when they should establish RMB capability to ensure their full participation in this growing trend within the international trade arena.
The Single Euro Payments Area (SEPA) is much more than a European operational compliance challenge, and should be seen as a strategic opportunity for corporations to restructure their European cash and liquidity management functions so that they can be run far more efficiently, and significantly reduce costs and risks. The fundamental change that SEPA brings from an operational perspective is the standardization of all euro Automated Clearing House (ACH) payments in the SEPA zone. All businesses that make euro payments within Europe can do so using a single euro account to submit a SEPA compliant payment, which becomes mandatory with effect from 1 February 2014.
All ready to start clearing Renminbi (RMB) payments? Not seeing any or low volumes? This article flags how a Financial Institution (FI) can encourage usage of RMB by understanding the benefits the RMB internationalization offers to a corporate client.
Globalization continues at a staggering pace and companies around the world are moving further afield, faster than they ever have before to drive business growth. For treasurers, this coupled with the imperative to do more with less, poses fundamental opportunities and challenges in how they approach risk management and enhance operating and funding efficiencies. Centralization may be an answer.
Q&A with Diane Quinn, J.P. Morgan Global Client Executive for Large Corporate Sales
The Consumer Financial Protection Bureau (CFPB) recently published a final rule for implementation of Section 1073 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("DFA 1073").
Japan's famous Lost Decade actually turned out to be a Lost Decade-and-a-Half, with little or no growth for more than 15 years in what was previously the world's second largest economy. But policy reforms designed to ignite Japan's economy are now helping lift the country out of stagnation.
A Q&A with Kiat Lim, Asia Financial Institution Group Sales Head, J.P. Morgan
Q&A with Diane Quinn, J.P. Morgan Global Client Executive for Large Corporate Sales
Financial stresses can develop a life of their own, as the aftershocks of 2008 evolved into sovereign concerns. Various banks continue to face challenges, with questions arising from their own financial exposures and resiliency, coupled with increasing regulatory obligations. This has compelled corporates, even as their cash balances rise, to revisit their banking strategies, with increased emphasis on counterparty quality and contingency capacity. Fortunately, as David Li, Head of Liquidity, Asia Pacific at J.P. Morgan Treasury & Securities Services explains, there are still ways in which both risk and return can be managed.
With the International Monetary Fund forecasting 7% growth in Asian Gross Domestic Product in 2012 and beyond, having the right infrastructure in place to support this growth is vital.
The rapidly growing Chinese market offers significant expansion opportunities for foreign corporates, but also substantial risks for treasury managers, unaware of China’s unique circumstances. Michael Nelson and Sarah Zhou of J.P. Morgan Treasury Services highlight the key pitfalls to avoid, and suggest strategies to optimize a corporate’s liquidity management in this challenging emerging market.
How best can banks support their clients in expansion mode? Do banks build, buy or ally to align with client needs and ambitions? J.P. Morgan gathered leading bankers to debate the drivers, challenges and best practice behind financial institution partnerships.