In this Product Profile we discuss the growth of Santander Corporate Banking in the UK and explore its range of Corporate Money Management services designed to help large organisations optimise their cash flow. We also review how this offering can help UK corporates better manage their money flows in, through and out of their businesses as they look to improve efficiency.
Overview
Santander Corporate Banking has developed a suite of services under the heading of Corporate Money Management which are designed to meet corporates’ needs relating to how they manage their inbound, internal and outbound money flows more efficiently. While the products can be used individually, Santander prides itself on building structured solutions to meet customers’ requirements, with an emphasis on developing strong value-led relationships.
Santander in the UK
The Santander name has just started to a grow in prominence in the UK market but the bank has a long history in Spain and South America and currently serves 90m customers in 40 countries worldwide. Santander has in fact had a branch in London for over 60 years and more recently has built up a significant presence in the UK retail, commercial and corporate banking sectors through its acquisitions of Abbey in 2004, and Alliance & Leicester and Bradford & Bingley in 2008. The Group is currently in the process of rebranding all three acquisitions with the Santander name.
By bringing together the corporate banking offerings of Alliance & Leicester Commercial Bank and Abbey UK Corporate Banking, and leveraging Alliance & Leicester’s partnership with the UK Post Office, Santander Corporate Banking is able to offer corporate customers access to over 11,000 counters – more than any other UK bank – and 20 regional Corporate Banking Centres. In addition, through the Santander Global Network, customers are able to make and receive payments in most major currencies and access a global network of expert relationship teams and international services for organisations operating in multiple overseas territories.
“For over 22 years, J Sainsbury has used the bank to process the cash generated by our business. With hundreds of J Sainsbury stores right across the UK, we require a cash handling service that’s competitively priced and reliable too. Santander Corporate Banking gives us just what we need. It’s a relationship that’s solid and reliable and we’re happy to recommend them to other retailers.”
Darren Clarke, Assistant Group Treasurer, J Sainsbury
The integration of Santander’s UK businesses offers customers more than a wide network. “Santander has always focused on a relationship management approach and this is something that we are importing to the UK business,” comments Louise Carter, Director of Money Transmission, Santander Corporate Banking. “Our approach is to look across the whole organisation and across a wide array of needs to help our customers achieve their goals.
The idea is to provide a cash specialist, alongside a dedicated Relationship Director who understands the whole structure and the fundamental issues the customer has. With the expertise that Santander Corporate Banking now has in cash management – through the heritage of Alliance & Leicester – we don’t believe this approach is reflected as well anywhere else in the market place.”
Handling over £130 billion of cash in 2008 – over a quarter of the cash passing through UK tills – Santander Corporate Banking currently works with most of the top 50 retailers in the UK.
Diagram 1: Santander Coporate Banking Solutions in Corporate Money Management
A diagnostic approach
Santander’s Corporate Money Management is a solution-based approach which draws on a portfolio of specialist experts to help corporates improve how they manage their inbound, internal and outbound money flows. The area includes cash management and provisioning, payment collection services, international transactions, card payments and sterling and foreign currency accounts amongst other services, such as Risk Management and Specialist Deposits. Santander’s Corporate Money Management offering is intended for both large- and mid-market corporates, including the UK subsidiaries of international companies operating in the UK.
Expert-led solutions include the following:
Cash management
Experienced specialists work alongside Relationship Directors to tailor solutions to help corporates optimise their cash management. Features of Santander’s cash handling offering include the following:
As a result of Santander’s partnership with the Post Office, customers can deposit cash and cheques and draw change at over 11,000 deposit locations – more than all the other UK banks and building societies combined.
For those customers requiring a secure carrier service, Santander offers access to a nationwide cash centre network.
Current account banking
Santander’s Corporate Reward Current Account claims the highest credit interest structure in the market for average monthly balances above £250,000. Benefits include:
Levels of credit interest akin to deposit account interest rates from other banks.
Transparent charging structure offering lower fees compared to most other corporate banks.
Account can be accessed via an Online Banking platform as well as by telephone and Post Office branches.
Provision of dedicated local Relationship Directors to oversee customers’ needs.
Account can be run to complement cash handling or cash supply requirements to create a bespoke cash management solution.
Cash supply and ATMs
One of the UK’s largest cash suppliers, Santander Corporate Banking provided over £60 billion of cash to ATM deployers and financial institutions in 2008. Features of the cash supply offering include:
Cash sales experts work in conjunction with Relationship Directors to develop solutions for clients.
Dependable supply of high quality ATM-fit notes.
Cash can be obtained over the counter at Post Office branches as well as by secure carrier delivery.
A range of income-generating cash machines is also available for deployment across company premises and branches with high levels of customer footfall.
Payment collection
Santander Corporate Banking offers collection services to corporates looking to handle a range of different payment types. These include internet payments as well as plastic card and paper based options for customers who wish to pay bills over the counter. Payment Collection features include:
BillPay™ website which can be integrated into the company’s website. Alternatively, payers can be directed to the BillPay™ website in order to make debit or credit card payments.
Over 30,000 payment outlets in the UK.
Scalable for the largest blue chips customers.
Over 70m transactions processed each year.
Card acceptance
Santander works in partnership with Elavon, a global payment solutions provider, in order to offer comprehensive merchant services. Elavon processes card payments for over 1m merchants worldwide. Features of Santander’s card acceptance solution include:
Santander’s corporate customers can access funds within two business days, or three business days if the current account is held elsewhere.
Payments can be settled in all major currencies.
International customers can pay in their own currency.
A free online reporting tool provides corporates with online access to transaction history and account details.
Interview
Santander
Joanne Sugden
Head of Cash Management
How are corporates’ banking needs evolving and how is Santander able to meet them?
Corporates are looking to have a relationship with the bank where the bank understands them, partners with them and maintains a consistent level of long-term support that they can rely upon. This fits in well with Santander’s model – we focus on building relationships with businesses, rather than trying to work out how many products we can sell them, so it’s a more traditional and, we believe, rewarding approach to banking. We have been practising this for many years in Spain and South America and it’s a culture that Santander is importing to the UK business.
Customers are also looking to cut costs and Santander’s relationship management process is a means to understand where the opportunities for freeing up cash might be for our customers – looking across the whole organisation and across a wide array of customer needs.
We believe that the market wants an alternative to what it has seen in the last 15 years. Companies are becoming increasingly comfortable with the dual banking model, rather than having one relationship with a single bank for 25 years. That sits well with Santander’s model because in Spain even the smallest business will have two or three banking relationships. That’s now becoming the trend in the UK.
What differentiates Santander Corporate Banking from other banks in this space?
The majority of banks have tended to focus on the profitable business of lending until recently. Areas like cash handling, payment collection and current account banking have been considered less important by many banks, so they have focused on what they want to get out of a corporate relationship. They have a view of what product they want to sell, and they go and sell that. However, most companies have a broader requirement to improve efficiencies in their day-to-day banking operations, and that’s what we offer through Corporate Money Management. In today’s climate, that’s why we have been asked to go in and apply our solutions-based approach to companies looking to cut costs and optimise cash flows.
In the Corporate Money Management area, Santander has acquired a compelling cash management proposition with the acquisition of the Alliance & Leicester business, so our track record is over 40 years in the industry. Other banks haven’t been that committed in their strategy – they have dipped into the market and dipped out again.
In 2008 we handled £130 billion worth of cash in the UK market, which translates into £1 in every £4 that is taken in a UK till. We have a significant market share including most of the top 50 UK retailers and three of the big five.
How does Corporate Money Management fit in with Santander’s other offerings for UK corporates?
Santander employs a holistic relationship management approach – a diagnostic approach, if you like. It’s about fundamentally understanding what the customer is looking to achieve, what the challenges are for that business and how we can work together. Say for example a company has a problem with its cash flow, we could look at a good payment solution and a supplier payments solution, because the fundamental problem might not just be cash – it may relate to costs and improving cash flow, so we would include Corporate Money Management products and perhaps some other solutions we have as part of our Corporate Banking portfolio.
Basically it comes down to listening and understanding, then coming back and bringing the necessary experts on board – not just our corporate money management specialists, but specialists in our other corporate solutions as well, if that’s appropriate.
What aspects of Corporate Money Management are particularly appealing for corporate treasurers?
We take a dedicated approach to the market place, keeping up to date on all industry developments. Our position is UK based, which means customers deal with local staff who understand the business environment in which they operate – this is quite key, I think.
Also, treasurers face a number of different issues in areas such as cash flow, maximising investment returns, liquidity and funding. What appeals to treasurers about our approach is that we have experts and solutions that cover all those needs.
Specialist corporate deposit solutions
A range of account options is available to help organisations make the most of their working capital and to fulfil their treasury management needs. The Santander portfolio includes:
Currency Deposit Accounts.
Fixed Term Accounts.
No-Notice Accounts.
With-Notice Accounts.
Client Accounts.
Bespoke Deposit Solutions.
International Payments
The International Payments service allows organisations to send and receive foreign payments quickly and efficiently. In 2008, their dedicated team of experts processed 500,000 international payments totalling over £40 billion. Features of the service include:
Fixed low-cost fees using competitive rates of exchange.
Highly personal service or payment can be organised via the internet, fax or post.
There are no system set-up costs – offering free implementation, with no hardware or software to install.
A holistic offering
In order to meet corporate customers’ needs comprehensively, Santander develops a package based on the different solutions encompassed by Corporate Money Management. Solutions from different areas of Santander’s corporate banking product portfolio may also be included.
The Corporate Money Management offering is just one of a range of solutions available to Santander’s UK corporate customers, and the products can easily be combined with supply chain, risk management and international trade solutions, for example.
Diagram 2: A holistic proposal
Future developments
Looking ahead, Santander Corporate Banking plans to consolidate its recent acquisitions and to complete the integration of these. Santander is also in the process of extending Partenon, its global in-house banking system, to the UK market. “Partenon already supports a single view of customers internationally, so it’s a technology platform that reflects our business model,” comments Joanne Sugden, Head of Cash Management.
“In addition, being part of the Santander Group, Santander Global Network is being rolled out for multinationals who really want a joined up international bank – just as other banks are selling off overseas assets or retreating to home markets. Santander Global Network will be a real unique selling point for us as global trade starts flowing again and trading companies need a bank with international reach and expert relationship teams in multiple territories.”
Santander Corporate Banking
Picture a different kind of banking partner. A bank that listens, understands and shapes itself around you. A bank that doesn’t sell you products, but gives you solutions. A bank that has the strength, in good times and bad, to deliver on its promises.
At Santander, we’re forging a new era in corporate banking for UK businesses. We know that now, more than ever, our customers need the value that can only come from building close working relationships. So we’re placing great emphasis on growing our team, expanding our expertise and putting more Regional Directors and solutions specialists on your doorstep.
We’re offering a full portfolio of solutions from funding, deposits and corporate money management to supply chain and risk management. And behind everything is the stability that comes with being part of one of the world’s largest and strongest banks.
To see how we’re reshaping corporate banking contact your local Relationship Director or visit www.ukcorporatebanking.com
