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Saturday, March 18, 2006
Firms to merge back office services to raise competitiveness - HSBC
The Hong Kong and Shanghai Banking Corp. (HSBC) expects more companies consolidating back office services.
“We see more companies moving to a centralized set-up in the form of shared service centers for processing and in regional treasury for risk management. This allows them to increase their competitive advantage by consolidating back office support services and reallocating resources to their core activities,” said Lawrence Webb, HSBC head of payments and cash management in Asia-Pacific.
Webb officiated the Manila launch of the ninth edition of the HSBC’s Guide to Cash and Treasury Management in Asia-Pacific 2006.
In the guidebook, HSBC three major trends that will continue to influence the development of cash management in Asia, including its increasing use in the country.
For almost a decade, the book has provided corporate treasurers and industry professional with comprehensive information on banking systems, technology and cash management practices in over 17 countries and territories throughout the Asia-Pacific region, HSBC said in a statement.
Regionalization
Webb said in the late 1990s, the biggest issue for banks was the transition to electronic funds transfer from paper transfers. There was no talk of regiona-lization or globalization.
In this decade, banks, engaged in cash management, need to set up regional cash management structures that support their corporate clients’ regional service centers, which centralize their back office support functions.
Another trend identified by HSBC pertains to an increasing focus on working capital management, particularly liquidity management.
Technology, the easing of banking regulations in some countries as well as changes in tax and accounting standards, are all affecting the way treasurers manage their cash within countries, across the region and globally.
“At HSBC, we recognize that the most efficient source of funding is your own short-term cash balances. We are able to set-up liquidity structures that will help mobilize this cash, reducing interest expenses and improving returns on surplus funds,” said Webb.
Technology continues to play a significant role in the way banks and companies manage cash.
Information
The third significant trend in Asia pertains to the huge advancement in the way companies now receive and deliver information from and to their banking partners.
HSBC Philippines vice president for cash management Anupam Bansal sees these trends happening in domestic companies as well.
“Technology has become a powerful tool that for many local companies and one of the most popular cash management products is the check outsourcing service, which involves sending of payment instructions electronically to the bank for printing of checks and release to beneficiaries,” Bansal said.
Storage
“The wholesale lockbox service is the warehousing and storage of post-dated checks and uses technology to avoid manual errors.”
He added that HSBC’s own Internet banking solution, HSBCnet has become increasingly popular to companies as well.
HSBCnet is the bank’s global corporate Internet banking channel, providing secure real-time access to cash management solutions across.
“Banks that are serious cash management players should be prepared to address these developments on the corporate front.
More and more companies are looking for efficiency in the way they manage cash and consolidation of its cash management requirements to a single bank or a select few. (This) is a trend that will continue,” said Bansal. (PR)
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