Photo of Andrew Fullarton, J.P. Morgan, Tor Stian Kjøllesdal, Varvara Belousova and Hallvard Bokn Eikeland, Equinor ASA.
Equinor ASA is a multinational energy company headquartered in Stavanger, Norway. This Norwegian energy company has operations in 37 countries.
in partnership with
As a global business, Equinor’s treasury team works with four main cash management banks internationally and maintains 800 bank accounts for 250 subsidiaries around the world.
A regular part of corporate treasury’s highly centralised responsibilities is the opening and closing of new legal entities, which then require the establishment of new accounts. This presented a challenge for treasury, which must maintain bank legal documentation, including account terms, sweep documentation and ancillary services.
Because each bank frequently updates their agreements, and these changes vary from country to country, Equinor’s legal team has to review all of these complex documents before they can be signed. In many cases, these documents were being changed every six months, creating a burden on the treasury and legal teams. The review and negotiation process between Equinor and each bank resulted in delays for internal commercial clients, who need access to these bank accounts. This also stretched limited treasury team resources.
The treasury team initiated a discussion with banking partner, J.P. Morgan to create a unique, Global Master Framework Agreement, which standardises and simplifies all global terms for Equinor’s 300 plus bank accounts globally. The solution enables new accounts to be opened with the completion of a one-page document only, signed under power of attorney from the parent company. This negates the need for legal reviews, multiple document completion and speeds up the onboarding and account opening process dramatically, while ensuring global consistency on terms.
In parallel to the Global Master Framework Agreement, treasury will employ J.P. Morgan’s electronic signatures solution which will further streamline account opening by leveraging technology to digitise this part of the process.
Equinor’s treasury team is continuously looking to achieve process improvements. One of its central tenets is to improve treasury efficiency, utilising digital processes where appropriate, to streamline end-to-end processes. As the company’s treasury function is centralised, it is critical solutions implemented are global in nature and scope.
The treasury team worked closely with banking partners to find a solution. The Global Master Framework Agreement was a result of such collaboration with J.P. Morgan. This allowed the creation of a centralised and standardised process that dramatically reduced time-consuming administrative treasury and legal activity. The result is better controls, commercial consistency, reduced strain on treasury resources involved in the process, and the speeding up of core treasury operations in support of critical business objectives.
The overwhelming success of the solution has not been kept under lock and key: Equinor is eager to share its best practices with peers and the treasury industry as a whole.
Standardising legal and commercial terms across all accounts globally has simplified and accelerated the timing for account opening processes. Global account terms and change notices for them have been reduced from 153 down to just one. Country addenda have been cut from more than 153 to 12; while signatures required for re-papering common terms have been reduced from 153 down to one.
Equinor expects time spent by its legal team on reviewing new account opening documentation will be reduced to zero. In addition, its treasury team has achieved centralised control of all account opening processes, reducing delays for internal commercial clients, driving tremendous efficiency for the organisation. It is anticipated that reviewing documentation for onboarding new accounts will be reduced by up to 80%.
At the same time, by simplifying the requirements of the KYC renewals and account opening documentation process, the improved efficiency lowers the strain on already stretched treasury and legal resources, allowing them to focus on more mission-critical tasks for the business.