INTERNATIONAL CASH
MANAGEMENT (ICM)
4
cliënt panel
WHAT's NewS Issue 7 November 1995
International cash management has been around in one shape or form for as
long as people have been doing business together. But today's clients expect
more and more from their banks in this area. Han Segaar, head of payment and
information services for CBB customers, and external consultant Peter van den
Berg explain the bank's ambitious strategy to expand and globalize interna
tional cash management services and how our now regular cliënt panel of top
corporates has helped us define that strategy.
Looking for Utopia - Segaar (right) and Van den Berg.
'Until a few years ago,' Segaar explains, 'a
company that was operating in, say, seven
countries had to maintain contacts with
domestic banks in each. That is, unless
they worked with some of the bigger
American banks which can offer services
at their operations in those countries,
often known as the mono-system and you
may think it sounds ideal, but it has its
drawbacks. If you look at payments alone,
then maybe it is a sound strategy. But ICM
is not only about payments traffic. Today,
it covers an ever-broadening range of
other services required, often on a daily
basis, by corporates. I'm thinking here, for
example, of interest rate forex products,
swaps, FRA's, hedging, and other products
relating to the allocation of resources.'
STRONGEST BANK
According to Segaar, because companies
want to allocate their financial resources
in an optimal way, 'the perfect situation
would be to end each day in a zero situ
ation, that way they don't have debit in
terest. The reality is that if you work with
TOUGH OPTION
The concept the ICM team has
come up with is an integrated
approach. 'What we're
proposing is to establish re-
lationships with the top banks
in each country. This would
mean we could then supply the best condi-
tions for customers at any given location.'
Both Segaar and Van de Berg agree this is
certainly not the easiest option. 'Setting up
the kind of quality totally global network
this integrated system requires entails an
incredible amount of preparation,' Van
den Berg confirms. 'Then you have to
manage it - that's quite a job.'
REALISTIC APPRAISAL
It is an ambitious concept, which, if to
tally successful would be what Segaar calls
'ICM Utopia'; he also agrees this is some
way in the future. 'This is an approach
which, as far as we know, has never yet
been undertaken,' he says. 'You often see
an integrated approach mentioned in the
literature, but no one has actually man-
aged to set it up.' Yet, as in anything you
want to achieve, however visionary, you
have to start somewhere, so the team
began with basics. 'We sent out question
naires to banks around the world asking
for a realistic appraisal of what they can
do. Our preliminary conclusions are that
Rabobank is currently in the process of
developing a revitalized - and even revol-
utionary - new system of international
cash management which it believes will
offer customers the best of all worlds.
only one bank, it cannot always offer the
best rates in each country. Just take Rabo
bank as an example. We can get guilders
cheaper than other bank. When a foreign
corporate working with the mono-system
needs guilders, its bank can
never offer the kind of rates
we can. So our thinking is that
the best solution for com
panies working internationally
is to work with the strongest
bank in the particular currency
they need.'
"Utopia" is still "Utopia", but we do
think the results will show we could, per-
haps, start up with a number of top banks
in neighbouring European countries.'
FLEXIBLE PRODUCTS
The type of products this new ICM system
would ultimately offer is highly diverse.
'What the cliënt panel input showed is that
no two companies have the same ICM
needs,' Van den Berg says. 'Given that fact,
you then have to start thinking seriously
about how to approach your product pack-
age. We need flexible product development.
Your first priority is to analyze what is
needed by the customer, and you have to
take into account what is happening with
them. What does internationalization mean
for clients and a whole range of other as-
pects that are indispensible to defining your
strategy. You have to ask yourself: How
should I develop and redevelop my services
in order to provide the best possible alterna-
tive to the competition? Who are the really
big players? What could a single currency
mean in terms of ICM? Then there is the
question of how we provide our services.
The type of plan we have in mind requires a
massive investment of both financial and
human resources. We have to know what
the market thinks about our plans.'
REALISTIC APPROACH
Planning a system which will not be fully
operational for some time is, of course, a
difficult business. 'We're developing
something over the coming years that may
only be fully operational at a much later
date,' says Segaar. 'New applications are
coming onto the market all the time. So
you're continually anticipating devel-
opments that are still on the drawing-
board. We're realistic about this. Our
primary aim is to be at the forefront of
broad-based ICM as we define it - and
maybe then we'11 be able to provide at
least a little piece of Utopia to our clients.'
ICM
International Cash Management
(ICM), bestaat al zolang er zaken gedaan
worden. De huidige klant verwacht op dit
gebied echter steeds meer van zijn bank.
Han Segaar, hoofd Betaal- en Informatie
diensten CBB, en extern adviseur Peter van
den Berg lichten onze ambitieuze doelstel
lingen op het terrein van ICM toe ten aan
zien van de globalisering en uitbreidingen
die gepland zijn en de daarmee samenhan
gende investeringen in mensen en midde
len. Zij benadrukken de grote rol aan van
ons vaste Cliëntenpanel, bestaande uit af
vaardigingen van topbedrijven, bij het be
palen van deze strategie.
