HSBC Corporate Insights

GLOBALISATION: External forces driving corporate growth and expansion

Diane S. Reyes Group General Manager and

Global Head of Global Liquidity and

Cash Management, HSBC

HSBC ViewWelcomeGlobalisation continues to be a driving force in the world economy, creating

new opportunities for businesses of all sizes to grow and expand.

To explore this and other key industry issues, HSBC has partnered with Celent – a

leading research and advisory firm specialising in Financial Services – to produce a

series of reports. The sixth report in our series takes a deeper look at the external

forces driving corporate growth and expansion as an outgrowth of globalisation.

The research examines how understanding economic uncertainty, the geopolitical

climate, the regulatory environment, and technology evolution are crucial to

making informed geographic market decisions. The report includes recommended

strategies and tactics for corporate treasurers to weather uncertainty while

propelling corporate growth.

In addition to Celent’s findings, Drew Douglas, Regional Head of Global Liquidity

and Cash Management for North America, and Kee Joo Wong, Regional Head of

Global Liquidity and Cash Management in Asia Pacific, share their insights on the

key trends driving corporate expansion, the importance of flexible treasury models,

and the need for interoperability across financial technology.

The findings also highlight the importance of working with financial services

partners with international reach coupled with local expertise to leverage cross-

border opportunities with sophisticated liquidity and cash management solutions.

We understand how important it is to continue to be a strategic partner to our

customers as they consider global working capital solutions. Through this series,

our objective is to continue a dialogue with you to better understand your unique

goals and challenges.

The research examines broad trends driving corporate growth and expansion as an outgrowth of globalisation.

The globalisation of treasury demands sophisticated liquidity and cash management solutions.

Published: December 2016

HSBC Bank plc. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Registered in England No. 14259

Registered Office: 8 Canada Square, London, E14 5HQ, United Kingdom

Member HSBC Group

GLOBALISATION: EXTERNAL FORCES DRIVING CORPORATE GROWTH AND EXPANSION

Patricia Hines, CTP December 2016

This report was commissioned by HSBC Bank Plc. ("HSBC") at whose request Celent developed this research. The analysis, conclusions, and opinions are Celent's alone, and HSBC had no editorial control over the report contents.

CONTENTS

Introduction ......................................................................................................................... 1 Key Research Questions ................................................................................................ 1

External Forces Driving Corporate Growth and Expansion ................................................ 3 Economic Uncertainty ..................................................................................................... 3 Geopolitical Climate ........................................................................................................ 4 Regulatory Environment ................................................................................................. 4 Technology Evolution ..................................................................................................... 5

Challenges of Global Expansion ........................................................................................ 7 Bank Relationship Management ..................................................................................... 7 Liquidity and Cash Management .................................................................................... 7 Risk Mitigation ................................................................................................................ 8

Best Practices for Global Expansion ................................................................................. 9 Treasury Transformation ................................................................................................ 9 Collaborating with Banking Partners ............................................................................ 11

The Path Forward ............................................................................................................. 13 About Our Research ......................................................................................................... 14

Using Seasoned Professionals ..................................................................................... 14 An Unparalleled Network .............................................................................................. 14 Robust Research Methodology and Independence ...................................................... 14

Related Celent Research ................................................................................................. 15

INTRODUCTION

“It has been said that arguing against globalization is like

arguing against the laws of gravity.” – Kofi Annan, Former Secretary-General of the United Nations

Globalisation involves increasing integration of economies around the world, from the national to the most local levels, thereby promoting international trade in goods and services and cross-border movement of information, technology, people, and investments.”1 The rise of Foreign Direct Investment (FDI) accompanies the rise in globalisation, with emerging Asia the largest recipient of FDI flows.2

Changing demographics in Asia-Pacific are also spurring infrastructure investments, with a trickle down impact of more opportunities across manufacturing, trade, and service industries. Specific government initiatives such as One Belt, One Road and the formation of the ASEAN Economic Community will further fuel and drive growth in both outbound investment and trade across key corridors.

There is a continued movement of Asian-headquartered firms moving East to West, allowing these firms to diversify and access Western markets and technology, Asian firms have been expanding globally, either organically or through acquisitions, for some time, driven by a desire to expand distribution channels, garner new segments, move closer to international customers, and take advantage of depressed asset prices.

In February 2016, China National Chemical Corp. (ChemChina) offered US$43 billion to buy Swiss pesticide maker Syngenta AG that if approved, would be the largest foreign takeover by a Chinese company. India’s merger and acquisition (M&A) activity has reached its highest on record, up 36.2% at US$46 billion for January through September 2016 as compared to the whole of 2015, which saw US$33.8 billion in deals.3

It is against this backdrop that this report discusses the external forces providing opportunities for corporate growth and expansion through evolving trade corridors by answering three key questions.

KEY RESEARCH QUESTIONS

1 What are the external forces driving corporate growth and expansion?

2 What are the challenges facing corporate treasurers when going global?

3 What are best practices when considering global expansion?

To successfully take advantage of opportunities arising from evolving opportunities for corporate growth and expansion, firms must understand critical factors affecting growth

1Globalization and the Benefits of Trade, Federal Reserve Bank of Chicago, 2007 2World Investment Report 2016, United Nations Conference on Trade and Development, 22 June 2016 3India's M&A activity reaches highest on record in Q3, up 36.2% by value, T. E. Narasimhan Business Standard, October 6, 2016

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prospects, regional differences, and business models. Four primary external forces impact corporate geographic expansion and growth:

• Economic uncertainty. • Geopolitical climate. • Regulatory environment. • Technology evolution.

Eight years on from the 2008–2009 financial crises, global economic growth remains sluggish, hovering between 3.1% and 3.4% since 2012. There are numerous examples of geopolitical events exacerbating volatility, uncertainty, and risks arising from the increasing interconnectedness of regions caused by globalisation. New regulations impact treasury organisations in many ways, including in-house banking, intercompany transactions, and transfer pricing documentation.

Corporate treasury organisations continue to lean on technology to facilitate change and mitigate complexity arising from global expansion. Cloud-based treasury management systems (TMS) provide an opportunity to implement specific modules on a subscription pricing basis. Governmental agencies, banks, and fintechs are collaborating to evolve complex corporate treasury services.

Treasury management plays an important role in a corporation’s globalisation efforts especially in the areas of cash management, banking, foreign exchange risk, and investments. They must address challenges with managing liquidity distributed across markets, currencies, and businesses, especially the need to keep up with regional liquidity nuances and regulatory issues.

Multinational corporations globally, wherever headquartered, typically share similar treasury priorities, namely visibility and control over liquidity and risk. A key difference for multinationals headquartered in developing economies is where they are in their international expansion journey and therefore the degree of treasury sophistication that they have in-house to facilitate this international strategy. To support their international strategy, many firms choose to centralise some or all of their treasury operations. While centralisation is a valuable step for improving visibility and control over liquidity and risk, establishing the right banking relationships is another.4

Although firms are in different stages of their globalisation journeys, they can benefit from working with their banking partners to adopt strategies and tactics that address the external factors affecting corporate growth and expansion.

4The Next Generation of Asian Treasuries?, Helen Sanders, Editor, Treasury Management International, March 2016.

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EXTERNAL FORCES DRIVING CORPORATE GROWTH AND EXPANSION

To successfully take advantage of opportunities arising from globalisation, firms must understand key factors affecting growth prospects, regional differences, and business models.

Corporate treasurers face a wide range of external forces. Four are critical if corporates are to capture the opportunity for growth and expansion afforded by shifting trade flows (Figure 1).

Figure 1: External Forces Driving Corporate Growth and Expansion

Source: Celent Analysis 2016

ECONOMIC UNCERTAINTY In its 2016 survey of corporate treasury executives, The Economist Intelligence Unit found that global economic growth was the most serious macro and financial risk cited by respondents.5 Eight years after the financial crisis of 2008–2009, global economic growth remains sluggish across most regions. In its most recent World Economic Outlook (October 2016), the International Monetary Fund (IMF) predicted that global GDP growth will slow to 3.1% in 2016 before slowly recovering to 3.4% in 2017 and 3.8% in 2021.

5 Managing Risk in Challenging Economic Times, The Economist Intelligence Unit Limited, 2016

Key Research Question

1

What are the external forces driving corporate growth and expansion?

Understanding economic uncertainty, geopolitical conditions, regulatory environment, and technology

evolution are crucial for international footprint decisions.

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Economic volatility in an increasingly globalised world increases corporate treasury focus on cash and liquidity management and makes optimising them more difficult.

GEOPOLITICAL CLIMATE Increased regional interconnectedness heightens possible risks due to geopolitical instability. Geopolitical uncertainty complicates a treasurer’s ability to gain a clear outlook on geopolitical events and their potential effects on regulation and cross border trade. Three are highlighted here as examples — the passage of Brexit, the rise of protectionism, and the ratification of the TPP.

The passage of Brexit by the UK in mid-2016 increased uncertainty about business prospects. In November 2016, the Bank of England lowered its business investment growth forecast to 2% for 2018, less than half of the 4.75% growth it expected in August.6 The World Trade Organization (WTO) reports that new protectionist measures are at their fastest pace since the 2008 financial crisis, worrying some big global investors about the measures’ potential to undermine corporate profits.7 Following the recent presidential election and pending change of administration in the US, trade agreements like NAFTA and TPP may be under review. A US review of trade agreements and tariffs increases uncertainty about global trade projections and promises an interesting road ahead while the new administration confirms their policies.

These geopolitical shifts complicate a treasurer’s ability to forecast risk, whether related to cash flow, external financing, commodity prices, foreign exchange rates, or interest rates. We expect volatility to continue to be an issue that corporate treasurers need to address with their banks, serving as an illustration of the challenges of managing risk.

REGULATORY ENVIRONMENT Governments and central banks often respond to a challenging economic and geopolitical climate by promulgating new regulations or changing existing ones. The United Nations Conference on Trade and Development (UNCTAD) believes the untapped potential for further trade growth lies in regulation. The organisation estimates that 96% of world trade is affected by at least one regulation, or non-tariff measure (NTM) (in addition to trade tariffs), fragmenting trade and increasing trading costs. UNCTAD estimates that the 48 least developed countries currently lose an estimated US$23 billion a year, 15% of exports, because they lack the necessary financial and technical resources to comply with NTMs.8

In addition to regulations affecting their ability to trade with certain countries, firms themselves face a number of new regulations affecting international treasury operations. The Base Erosion and Profit Shifting (BEPS) project from the Organisation for Economic Co-operation and Development (OECD) and the G-20 requires multinational companies to refer to better align their economic activities with their taxable income to prevent firms from shifting profits to low or no-tax locations. New International Financial Reporting Standards (IFRS) address accounting for financial instruments, guidance on revenue recognition for contracts, and recognition of new assets and liabilities. An amendment to the long-standing India-Mauritius tax treaty introduces a levy to prevent investors using Mauritius as a tax shelter.9

A complex, disjointed compliance landscape hampers corporates doing business internationally. Where the European Union is harmonising regulations and directives across the region, doing business in Asia-Pacific is exacerbated by a non-uniform approach across the region. Regulatory change can be abrupt, and compliance requires 6UK inflation announcement: Bank of England forecasts record rise over Hard Brexit fears, independent.co.uk, 3November 2016 7WTO warns on rise of protectionist measures by G20 economies, Financial Times, June 21, 2006 8 Tackling “non-tariff measures,” the new frontier for global trade, UNCTAD, October 2016 9India Acts to Stop Investors Using Mauritius as Tax Shelter, Bloomberg L.P., May 10, 2016

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a careful understanding of the details and cross-border implications of each change (e.g. India demonetisation, Indonesia’s mandatory use of Rupiah, and internationalisation of the RMB).

Working with banks across different geographies can also be challenging. There are dramatic differences in onboarding processes across banks and geographic jurisdictions due to variation in regulation and market practices. In some countries, banks must use more labour-intensive procedures for KYC and other due diligence operations due to a lack of public information. Similarly, the legal acceptance of digital signatures is not universal, requiring that banks and clients exchange paper documentation with original signatures (and in some countries in Asia, company chops).

Complying with a seemingly constant stream of regulatory events, both expected and unexpected, reduces corporate treasury resources available to address other external forces.

TECHNOLOGY EVOLUTION Corporate treasury and finance departments are used to doing more with less and as a result, lean on technology to lessen complexity and to facilitate change. The growing adoption of cloud-based TMS solutions evidences a move towards “renting” treasury technology. With many firms in emerging regions still using spreadsheets to manage treasury operations, cloud-based systems may hasten adoption in these regions. The opportunity to implement specific TMS modules with a simple, fixed subscription cost model is an attractive choice, speeding implementation timeframes. Banks have an opportunity to adopt the same approach by creating segmented, tailored, and packaged offerings that are “right-sized” for each customer.

Real-time payments are sweeping the globe as domestic payment infrastructures are modernised to support high volume, low value payments. There are potential benefits for corporates at either end of the financial supply chain, including improvements to days payables outstanding and days receivables outstanding. E-commerce is the growth engine for many companies, helping to create a global marketplace for buyers and sellers.

There is much discussion of disruption by nonbank (fintech) providers in segments such as cross-border payments, foreign exchange dealing, traditional trade finance, and supply chain finance, but generally, corporate treasurers aren’t looking for disruption. Corporates value the scalability and reliability of technology solutions offered by established banks and technology providers. This is leading to a culture of collaboration, not competition between fintech providers and banks, especially for complex corporate treasury services.

Going a step further, several governmental and regulatory bodies are encouraging fintech innovation in their countries, including Singapore, Australia, and Hong Kong. For example, the Singapore Monetary Authority (MAS) has established an innovation lab located within the MAS building called Looking Glass @ MAS to encourage the community to connect. Several major financial services firms including Citi, MasterCard, HSBC, Standard Chartered, Visa, and Allianz operate financial services innovation labs in Singapore and will be working closely with MAS to pursue cutting-edge digital solutions.

Having access to the latest fintech innovations allows corporate treasurers to take a “best of breed” approach to treasury technology. But that approach increases the complexity of integration, both internally across the organisation and externally to financial counterparties. Treasurers are looking for solutions offered by banks and fintech providers to move from connectivity to interoperability, eliminating friction and increasing treasury visibility.

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Seamless and secure end-to-end integration between bank and treasury systems is the starting point for interoperability. Multi-bank connectivity and standardisation of file formats are key building blocks for interoperability. Some TMS providers are partnering with SWIFT to provide SWIFT Alliance Lite2 connectivity through their products. Many banks and corporates are moving to the ISO 20022 financial messaging standard for information reporting and payment initiation. Harmonisation of data formats increases straight-through processing, improving productivity and reducing fraud by eliminating manual intervention.

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CHALLENGES OF GLOBAL EXPANSION

With geographic expansion comes the need for treasury departments to understand a wide array of country variables: local bank providers, regulations, investment options, domestic payment systems, multicurrency requirements, and regional differences in cash management solutions.

BANK RELATIONSHIP MANAGEMENT Most treasury organisations have primary responsibility for managing, monitoring, and reviewing bank relationships. No matter the geographic region, most corporate treasury organisations use a number of banks to support their operations. Increasing the number of banks used, especially across regions, heightens the focus on bank relationship selection and management. Bank selection is a critical decision process and involves several criteria: product specifications, industry knowledge, pricing, financial strength, and information security.

With an increase in the number of banks comes increased complexity in managing key treasury functions such as foreign exchange, risk management, cash pooling, forecasting, and the like. Treasury organisations must adapt to the challenges of global expansion by determining how to organise best to meet those challenges, whether centralised, decentralised, or a combination of both.

LIQUIDITY AND CASH MANAGEMENT As they expand geographically, treasurers face challenges with managing liquidity distributed across markets, currencies, and businesses, especially the need to keep up with regional liquidity distinctions and regulatory issues.

Capital restrictions, regulation, or taxation may prevent (or discourage) cash repatriation resulting in “trapped cash.” For example, to repatriate cash from China, foreign investors must obtain approval from the State Administration for Foreign Exchange. Maintaining these local cash balances can expose a business to geopolitical risks in the event of further tightening of monetary policy or regulation.

As discussed in Staying Afloat: External Forces Impacting Corporate Liquidity Management (March 2016), the Liquidity Coverage Ratio provisions of Basel III are affecting the availability of certain types of liquidity management solutions such as notional and physical cash pooling. Looking at investment options, central banks in some

Key Research Question

2

What are the challenges facing corporate treasurers when going global?

Treasury departments must cope with regional nuances affecting cash forecasting,

liquidity management, investment options, and risk mitigation.

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of the safest monetary havens (European Central Bank, Sweden, Switzerland, and Japan) have pushed nominal interest rates into negative territory. Corporate investors must choose between the security of keeping funds in relatively stable currencies (at a cost premium) and using those funds to pay down debt or shift to other currencies.

It is important for companies expanding into new countries to understand the unique treasury and financial management requirements in the region. Examples include:

• Same day remittance services across Asia-Pacific using Renminbi (RMB), US dollars, or HK dollars.

• Prohibitions or restrictions affecting foreign currencies in some jurisdictions such as Indonesia.

• Support for check services in the US (e.g. integrated payables, positive pay, controlled disbursement, and remote deposit capture).

• SEPA payment instruments in Europe. • Disparate faster payments schemes in production or under development around the

globe.

RISK MITIGATION An increasing number of corporate treasurers are involved with risk management activities, which span financial, fraud, operational, economic, technology, and physical risk. Financial risk usually falls under corporate treasury and includes interest rate fluctuations, foreign currency rate changes, and commodity price variations. Dependence on a highly integrated global supply chain across multiple continents and low pricing power in a deflationary and highly competitive market environment results in a significant cascading impact from currency volatility, which in turn influences the cost of investment, profitability, and returns. The primary risk from fraud is related to payment transactions, with treasury seen as the gatekeeper that controls access to bank accounts. The Kyriba/ACT 2016 Annual Survey found that 62% of participants had been actual or attempted targets of internal/external fraud (up from 43% in 2015). As the number of global bank accounts and volume of cross-border payments increases, Treasury must ensure that the appropriate controls are in place to reduce fraud.

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BEST PRACTICES FOR GLOBAL EXPANSION

TREASURY TRANSFORMATION The same external trends driving globalisation are driving a changing role for the corporate treasurer. There is increasing involvement by corporate treasury in areas that lie beyond traditional cash and liquidity management — geographic expansion, corporate funding, mergers and acquisitions, and business continuity planning. With an increasing involvement in broader corporate issues comes an opportunity to implement best practices across the treasury organisation.

Many companies operating internationally are revisiting their treasury structure in response to the challenges of global expansion. Some have already centralised some or all of their treasury operations, creating shared service centres for a wide variety of functions, and establishing in-house banks to provide services to international subsidiaries. These structures make it easier to implement and standardise processes including intercompany netting, pooling, and cash concentration used to maximise liquidity across geographies.

Shared service centres adopt treasury technology tools for data aggregation, multicurrency reporting, cash forecasting, and foreign exchange movement. And the compliance requirements of BEPS and other evolving regulations will be difficult to achieve without treasury systems to track data sources, in-house cash balances, transfer pricing, and intercompany lending.

While some corporations establish fully centralised treasury centres, others choose to use a combination of both, with regional centres providing services within a designated geographic area. Particularly in Asia-Pacific, navigating the complex and fast-changing regulatory landscape requires treasurers to be closer to the ground In Asia-Pacific, Singapore offers a number of incentives to entice organisations to establish regional headquarters, including a Finance & Treasury Centre (FTC) Tax Incentive. The incentive provides a reduced corporate rate of 8% on fees, interest, and gains from qualifying services and activities. Hong Kong is challenging Singapore with a 50% cut to profits tax, from 16.5% to 8.25% for qualified companies if they choose to set up a corporate treasury centre in Hong Kong.

The choice to centralise vs. decentralise operations can be daunting given the wide range of critical functions performed by global treasury organisations. Figure 2 shows that many corporate practitioners make the choice based on the specific treasury function.

Key Research Question

3

What are best practices when considering global expansion?

A corporate treasurer looking at cross-border opportunities can leverage their banking partners’

deep understanding of geographic differences, local regulations, and technology solutions.

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Figure 2: Centralisation and Decentralisation of Treasury Functions

Source: CGI 2016 Transaction Banking Survey, published by GTNews & CGI, Celent Analysis

Another area of treasury focus is mitigating financial risk to the organisation. This focus is prompting many treasurers to undertake payments and connectivity improvement projects. Where once the focus on these projects was reducing costs, a 2016 FIS Global survey found that the primary drivers for payments and connectivity projects are to improve controls and approvals as well as reduce fraud risk (Figure 3).

Figure 3: Drivers for Payments and Connectivity Projects

Source: FIS Global B2B Payments and Bank Connectivity 2016 Study, Celent analysis

To improve payments management, larger corporates are implementing payments factories alongside shared services centres and in-house banks. HSBC defines a payment factory as an internal functional construct, separate legal entity, or a third party provider that processes and executes payments and acts as the single gateway from the organisation to its banks and payment service providers.10 Payments improvement projects also position the organisation to take advantage of developments around immediate payments, mobile e-commerce, digitisation, and emerging fintech innovations.

10Payments Centralisation, HSBC Global Connections, July 2013

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For bank connectivity, many corporate treasurers turn to corporate digital portals and host-to-host file transfers. Some also connect to the SWIFT network directly, using in-house SWIFT software and hardware, a third party SWIFT service bureau, or SWIFT’s cloud-based Alliance Lite2.

COLLABORATING WITH BANKING PARTNERS Banks have traditionally acted as both trusted advisors and service providers to global companies. Internationally savvy banks keep abreast of developments in evolving trade corridors, keeping an eye on regulatory and geopolitical factors that could impact their clients in a region. As companies become more global, their need for a global universal banking partner with a solid capital base increases. These banks offer a comprehensive suite of treasury and cash management services for effective cross-border working capital management (Figure 4).

Figure 4: Corporates’ Needs for Cross-Border Working Capital Management

Source: Oliver Wyman analysis

As corporates internationalise, they need the right set of solutions and innovations to address the new treasury landscape. Some of the specific solutions offered by banks include:

• Aggregating multibank reporting and delivering balance and transaction through a variety of channels, in the format of the client’s choice.

• Concentrating cash (physical pooling) and redeploying it across borders. • Enabling cross-border, low-value mass payments. • Minimising FX risks through passive and dynamic hedging strategies. • Providing automated liquidity management, including mandate management. • Increasing visibility with online dashboards to consolidate information reporting,

investment holdings, trade transactions, and compliance reporting.

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• Global e-commerce enablement (payment acceptance in local currency). • Recommending whether to open local accounts or multicurrency accounts.

A company’s treasury focus often differs by business lifecycle stage. Many startups go global from Day 1, taking advantage of SaaS and eCommerce tools that span geographies. High-growth startups focus on quickly producing goods and services, ensuring their suppliers are paid on time to keep production inputs flowing. More mature treasury organisations look to reduce operational expense and increase the efficiency of day-to-day operations.

Key banking partners act as trusted advisors to globally active companies in times of uncertainty and volatility. Universal banks leverage their global network to support clients across regions to ensure a consistent approach, cash management infrastructure, and customer experience.

Given the unique treasury and financial management requirements in certain countries, a bank provider’s geographic reach is an important consideration. Banks can help companies to build a local presence and understand cultural differences, providing advice to capture emerging market growth. As they expand geographically, firms may need to reassess their banking providers in light of the impact of external forces. Partnering with banks that closely mirror your company footprint reduces the need for regional banks and bank accounts for day-to-day treasury operations.

Mergers and acquisitions are often a key corporate strategy for growth and expansion. Banks can offer market insights and transactional support to help corporate treasurers effectively manage the deal process and completion of settlement transaction flows. It is also important to ensure that bank accounts transition smoothly and that the new company is up and running with an effective, integrated banking technology infrastructure as quickly as possible.

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THE PATH FORWARD

Banks continue to act as both trusted advisors and service providers to help customers to take advantage of the growth and expansion opportunities afforded by globalisation. Decentralised banking models can provide local expertise but can also contribute to operating inefficiencies. Centralised, integrated banking services can help corporate treasurers to operate globally with localised expertise.

Corporate treasurers focused on understanding the external forces driving globalisation are adopting strategies and tactics to maximise growth and expansion:

• Engage with leadership to participate in setting strategy on regional opportunities. • Take advantage of learning opportunities afforded by industry associations and

global banks. • Explore optimal treasury structure as geographic reach expands; understand the

benefits and drawbacks of centralised vs. regionalised treasury centres. • Assess the adequacy of your internal controls framework to mitigate the additional

risk associated with global treasury activities. • Leverage technology to address the challenges of regulatory reporting, to increase

the visibility and predictability of global cash flows, and to reduce fraud associated with payment processes.

• Seek strategic banking partners that can offer guidance on local and regional markets with a far-reaching network of products, services, and trusted advisors.

• Understand available technology solutions to enhance treasury operations, particularly region-specific offerings and emerging cloud-based services.

Tackling these areas will help treasurers to weather uncertain economic growth, a changing geopolitical climate, and shifting regulatory environment. Universal banks understand geographic differences and are in a position to advise firms seeking to take advantage of the opportunities afforded by evolving trade corridors.

Was this report useful to you? Please send any comments, questions, or suggestions for upcoming research topics to info@celent.com.

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ABOUT OUR RESEARCH

Celent is a research and advisory firm which focuses on delivering technology-related insight to the Financial Services industry, to enable our clients to make the right decisions, at the right time.

To deliver these insights, Celent harnesses three core principles.

USING SEASONED PROFESSIONALS Our analysts come from a wide range of backgrounds, but they all bring wide ranges of experience with them. Often the source of an insight that an analyst brings is from their previous life of having dealt with an identical situation. Celent analysts have often walked in the shoes of their clients, rather than studied it in an academic way at arm’s length, and so they understand what matters, and the nuances of the situation.

AN UNPARALLELED NETWORK Celent's research clients include financial institutions, vendors, and consulting firms, from around the world. In addition, we interact with the broader community, from industry bodies to regulators to journalists. Every day brings new questions, giving Celent a unique insight into the pulse of the industry, and how each party in the ecosystem often perceives the same issue. Equally, this network is a powerful tool for Celent to tap into as it seeks answers or validation to questions.

ROBUST RESEARCH METHODOLOGY AND INDEPENDENCE Celent uses a variety of methodologies in its reports. For this type of report, we start with posing three key research questions. Based on our interactions with our clients, these are the questions that our clients are seeking answers to, or, using our experience and insights from previous questions, the questions that they now ought to be considering.

The research is carried to address these questions, through primary and secondary methods. We are careful to separate fact and opinion, and will always seek to validate or corroborate those facts. Information furnished by others, upon which all or portions of this report are based, is believed to be reliable but has not been independently verified, unless otherwise expressly indicated. Public information and industry and statistical data are from sources we deem to be reliable; however, we make no representation as to the accuracy or completeness of such information.

As a consequence, the findings contained in this report may contain predictions based on current data and historical trends. Any such predictions are subject to inherent risks and uncertainties.

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RELATED CELENT RESEARCH

Challenging the Status Quo: External Forces Supporting the Rise of Non-Bank Financial Services September 2016

Onboarding in Corporate Transaction Banking: Prioritizing Investments for Reducing Friction August 2016 Following the Money: External Forces Affecting Global Transaction Flows June 2016

Top Trends in Corporate Banking 2015: Turning Innovation into Results March 2016

Tailoring the Customer Experience: External Forces Impacting Corporate Digital Channels January 2016

Breaking the Payments Dam: External Forces Transforming the Payments Ecosystem November 2015

Corporate Banking: Driving Growth in the Face of Increasing Headwinds October 2015

Delivering Better Treasury Services Through Digital Transformation July 2015

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Copyright Notice

Prepared by

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