In this concise interview, Karin Flinspach, Head, Cash Products, Transaction Banking, Standard Chartered Bank shares her expertise on the various challenges corporates operating in emerging markets are facing and outlines the benefits in partnering with a bank with a global platform and deep local knowledge.

Karin Flinspach is Head, Cash Products for Standard Chartered Bank based in Singapore. She is responsible for the development of cash capabilities for the bank’s global corporate, investor and intermediary client segments. In this role, she oversees the full suite of cash products that include payments, receivables and liquidity management tools.

Prior to joining Standard Chartered, Karin worked with Citi for 20 years in a variety of cash management product roles covering both developed and developing markets. She was most recently EMEA Head of Payments and Receivables and is a key authority on SEPA (Single European Payments Area). Karin has published a large number of articles on the bank process infrastructure in Europe.

What unique cash management challenges do corporates in emerging markets face?

While the emerging markets are by no means a homogenous region, we do see collections as being a common issues for corporates operating across our footprint of Asia, Africa and the Middle East. In particular, how to ensure the collections process is done effectively and efficiently across often extremely remote areas.

Conventional methods have their limitations and corporates are looking to their banking partners to provide innovative and bespoke solutions to match very specific needs. To address this we have been working with our corporate clients to develop solutions that not only address local needs, but also offer pan-regional coverage. For instance, we recently worked with a client in Malaysia to utilise the ATM network of 20 major banks in the country to make cash collections straight into Standard Chartered Bank’s account. We have used this connectivity along with our award winning Virtual Accounts solution to apply funds straight through for our clients.

Another solution that has worked well with our clients is Mobile Money especially since in many of our markets, corporates are dealing with clients who are “unbanked” – which includes both individuals and small local businesses. In Africa for example, Standard Chartered is connected in four markets with mobile wallet providers allowing our clients to pay and receive funds directly from the mobile wallet holders. This allows smaller suppliers, even without a bank account, to receive payments from corporates on time and very easily. As an example, some of our FMCG clients pay directly to farmers and effectively replace cash transactions. This also substantially reduces not just the cost but also risks associated with cash distribution to un-banked recipients.

There is also demand from our corporate clients around the adoption and use of analytics to improve payments and collections processes. We have worked with them to leverage various tools that analyse the payment data from the organisation to generate information and insights over their incomings and outgoings across their global operations. This ultimately improves cash flow forecasting and working capital management.

Given the changes in the global banking landscape, what do you think is more important to a corporate in terms of global reach or local presence?

This really depends on the footprint and strategy of the client. We are seeing that for large corporates expanding overseas, global reach and access is key. However, this comes with its inherent challenges and these organisations will need their banks to develop standardised platforms, for example, in the area of reporting, that can be rolled out across the markets they operate in. This will ensure that the global treasury centre can look to automate and drive straight-through processing (STP) at all opportunities.

It also depends on the geographies that corporates expand into. For example, if the client grows across the emerging markets then it becomes increasingly important that their banking partner has deep local knowledge. Many of these markets pose complex regulatory challenges that may be difficult to navigate unless the bank has best-in-class knowledge of local regulations. Strong relationships with the regulators can make all the difference.

When selecting the best bank to work with, we find that treasurers nowadays do not just look for world-class systems and platforms that have cutting edge technology. The selection process is more complex than that and institutions which can offer the platforms and efficiencies as well as also add value and advice their client across issues like regulatory impact in a fast-changing environment definitely have the advantage.

The renminbi (RMB) making huge strides towards internationalisation, how are your clients leveraging the new opportunities afforded to corporates around the RMB?

The internationalisation of the RMB is a big topic for corporates, not just in Asia, but globally. The regulatory relaxation that has occurred over the past few years has now made it possible for corporates to move money out of China and pool this with other currencies offshore. Today, many of our clients are using RMB as a currency for cross-border trade and increasingly too as an investment currency. As a result, liquidity management solutions in Asia that include RMB are also becoming top of many corporates’ wish-lists.

There are also new developments such as the Shanghai Free Trade Zone and the loosening of restrictions on cross-border pooling and lending. With such a rapid rate of regulatory change, and significant complexity, clients are heavily reliant on Standard Chartered to help them keep up to date with changes, understand the opportunities and implement solutions that offer commercial advantage. Therefore, as we reflect on the future of the RMB, the question is not how fast and under what circumstances the RMB will become an international currency or a G4/G3 currency, but what this will mean for our clients and how we can prepare them in terms of infrastructure, balance sheet etc.

How can technology support treasury departments moving forward?

Treasuries are small entities that have lots of daily challenges. These are magnified as treasurers are being asked to do more with less. Technology has consequently become increasingly important to ensure treasurers meet their objectives. With limited resources, corporate treasurers are looking for solutions which can drive automation, help standardise operations and are also easily and quickly integrated. It is also important that these solutions are flexible and scalable to keep in tandem with business expansion and growth into new markets.

The role of big data moving forward cannot be downplayed and treasurers will require new and innovative solutions that better serve up key information, allowing them to make quick and well-informed decisions. This is particularly useful in the fast changing emerging markets.