Bank Interview: Michael Spiegel, Deutsche Bank

Published: Oct 2010

Exploring new ways to interact with clients whilst maintaining high standards and functionality is a significant challenge for today’s transaction banks. We speak to Michael Spiegel, Head of Trade Finance and Cash Management Corporates, EMEA, Global Transaction Banking at Deutsche Bank about the evolution of client dialogue, new technologies and how they are shaping the industry. We also discuss Deutsche Bank’s growth in EMEA, in particular in the Netherlands.

Michael Spiegel

Head of Trade Finance and Cash Management Corporates

Michael Spiegel is the head of Trade Finance and Cash Management Corporates for Europe (ex Germany), the Middle East and Africa in Deutsche Bank’s Global Transaction Banking division. Michael is based in London.

Prior to this, Michael was Head of Trade Finance and Cash Management Corporates, Americas, a position he held since 2005. Michael began his career in Deutsche Bank’s Credit Risk Management Group in 1987 and has held a variety of positions with the bank in locations including Hong Kong.

In 2005, he was named one of the 100 Most Influential People in Finance by Treasury & Risk Management magazine. Michael holds a BA in Banking from the Bank Academy in Frankfurt, Germany.

How important is client interaction in today’s transaction banking environment?

Client interaction really is fundamental to any successful transaction banking relationship. Through mutual dialogue, banks can advise clients in finding the best way forward for their business, as well as assisting the client to implement best practice solutions. Similarly, through this interaction, clients can help banks to shape their business offering and also provide ideas for product innovation. Essentially, what this means is that the client is actually contributing to the way in which their transaction bank is designed.

In what ways has Deutsche Bank embraced this client-centric approach?

We are actively engaged in changing our bank to include this level of client interaction, rather than simply offering clients the services that we, as bankers, think that they need. Aside from regular, direct discussions with our clients, we also have a Client Advisory Board, which has been running for over a decade. At the sessions we run, a number of our clients meet with senior management to share views on trends and discuss future requirements. It is a very open forum and helps us tremendously in finding out how we can better serve our clients.

We pride ourselves on our open approach and count strong client relationships and excellent customer service among Deutsche Bank’s core strengths. In fact, we regularly have very positive feedback on our decentralised customer service model. Using this in-country structure, means that we are close to the corporate entity in each country, and this close proximity allows us to be in contact with our clients, know how they operate and provide a very customised and a user-friendly service on the back of that local knowledge. This is a pillar of our strategy.

What are the main themes coming out of these client discussions and how have they shaped product development?

Post-crisis, clients are looking to grow revenues, whilst keeping a tight rein on budgets. In itself, this is a significant task, but coupled with heightened risk management concerns that threaten supply chain stability, treasurers are operating in extremely challenging circumstances. As such, clients are looking to identify areas where they can glean further internal cost savings, without having a detrimental impact on future growth.

Greater control over areas such as high-volume, low-value cross-currency payments can provide these sought after cost savings. Many large multinationals for instance operate using a ‘threshold’ system for payments, and amounts over and above the threshold are dealt with by the treasury department as ‘trade’ payments. However, anything below this threshold is often processed by overseas finance departments or operational teams. As such, visibility and control are lost and there is no central record of the FX rate that is applied to these low-value transactions.

With this client feedback in mind, Deutsche Bank developed a new cross-currency payment solution called FX4Cash, which was launched in July 2008, with the aim of streamlining and automating payables for clients, affording them greater visibility and control. The solution supports payments in over 125 different currencies, with multiple payment options and access channels, together with competitive rates. Rather than providing the client with information on the FX rate post-payment, FX4Cash allows them to see the rates as they are being applied. Moreover, the solution is highly automated, which leads to greater efficiency, speed and accuracy, together with fewer exceptions and lower fees.

Elsewhere, our continued investment into bringing cash management and trade activities together means that we are now much more focused on the receivables side of treasury processes. As a result of the tight credit conditions that the market is experiencing today, many treasurers are now realising that it’s not enough only to look into the payables side of operations, they must also take a closer look into the receivables side in order to generate internal cash. Many of our large corporate clients have already addressed their payables concerns through payment factories and shared service centres, but it is now time to look towards collection factory solutions. To help clients we need to set-up accurate information flows. This then enables the client to perform automated reconciliation matching, which brings with it the efficiency benefit of straight through processing.

Again, with a strong focus around receivables management, we are also continuing to invest in mobile services and card offerings. Commercial cards is definitely an area that we see ourselves becoming a much stronger player in going forward.

So the developments have been largely focused on the broader themes surrounding payables and receivables?

Deutsche Bank is focused on delivering solutions that respond to clients’ specific needs and on improving the overall client experience. One example of us responding to a particular client need is our investment into the development of ‘virtual accounts’. These allow clients such as insurance companies, investment managers and some large corporates to segregate funds without opening a myriad of independent accounts.

Account opening is another one of those broader themes that we are also looking to address in line with suggestions from our clients. The bank’s role here is to make it as easy as possible for the client to actually come onboard by standardising documentation and automating processes. Deutsche Bank has developed a centralised administrative database, which will enable us to offer a much quicker technical turnaround, and also removes some of the need for implementation staff to contact the technical support centre for non-standard onboarding administrations. This provides us with a greater flexibility in the handling of multiple changes for individual customers. In addition, we’ve started to use intelligent Adobe forms, which I believe is unique in our space.

With these ‘intelligent’ forms in place, the client is guided through the process and their data is instantly validated. This means that the client onboarding process can begin straight away, whilst avoiding the manual re-keying of data, improving data quality and speeding up all of the internal processing. Not only have we therefore introduced a much more efficient work practice within the bank, but we have also significantly improved the client experience. But we will not stop there; we will strive to make ongoing improvements to this process, making it even simpler where possible.

To what extent is technology the key to enhancing client experience and how has this changed over the last decade?

What we have seen over the past five or so years is that clients increasingly expect more user-friendly technology. The bar for client experience has traditionally been set by the retail banking sector and transaction banks need to ensure that they are delivering both ease-of-use and ease-of-integration as they roll out their new technology offerings.

Corporate treasurers are increasingly looking to their banking partners to provide integrated online tools that facilitate a much more holistic approach to liquidity and risk management. Close monitoring of cash positions and exposures has become of utmost importance to the treasurer and availability of real-time information is imperative. In response to demand from clients, and in order to benefit from the synergies available through an integrated approach to treasury and liquidity management, Deutsche Bank’s Global Transaction Banking and Global Markets divisions have come together to deliver an integrated liquidity management module on the bank’s existing e-commerce platform, Autobahn.

Could you explain how this liquidity management offering works and what you see as the main benefits that corporates can derive from using it?

This is a state-of-the-art web-based liquidity management module that allows corporate and financial institution clients to access the full range of Deutsche Bank’s treasury and liquidity services through a single sign-on application. The platform therefore combines liquidity management, forecasting and planning, foreign exchange and investment services, in a single location. In addition, clients can access strategic and tactical financing tools as well as information and analysis tools through the dashboard on the platform. For corporates, this means the ability to better determine liquidity positions, foreign exchange exposures and investment opportunities at a glance.

Real-time account information can be gathered on a multi-bank basis, which also means that corporates can more effectively monitor their credit line utilisation. Of course, clients can also invest liquidity through the platform, with a selection of money market funds and short-term investment options on offer. Additionally, Deutsche Bank offers value added post-execution services such as automated matching and reconciliation tools.

Ultimately, we are aiming to deliver a solution which reduces the complexity of our clients’ daily treasury activities, whilst offering full functionality in a user-friendly environment.

Why have bank portals suddenly come under the spotlight?

Generally speaking, the treasury world now has a much greater interest in enterprise risk management, so that tools that offer visibility, such as portals, have become of far greater importance post-crisis. Beyond visibility, portals also offer the ability to further combine cash and trade activities, with supply chain finance solutions and e-billing capabilities.

Our main aim with developing the Deutsche Bank e-commerce platform further is to allow the transaction banking products to evolve alongside the investment banking, sales and trading products, and to enable clients to access a strategic financial tool through a single window. We strongly believe that portals should be easily customisable, so that clients have their own user permissions and can change the way they view the information, rather than being stuck with the functionality that a bank believes a user should be able to see on screen.

So clients are becoming much more demanding in terms of the technology they want to see on offer. What other technologies are you consequently investigating?

In order to better serve our clients, it is always necessary to embrace new technologies and mindsets. We are currently exploring ways to leverage the power of social media within the treasury space and are planning a campaign using social media technology. In fact, we have recently hired a Head of User Experience into our Client Access product team – who used to work for one of the leading search engines – to build up that side of our offering. It will be a huge undertaking to ensure that the social media side of our offering is maintained properly and monitored appropriately.

The great thing about social media is that it not only helps us to tap the knowledge-base of our customers, but it allows the client to be very open with us. We want our clients to feel empowered to bring suggestions to us and have a say in driving the direction of the services they receive.

Will Deutsche Bank be taking these innovations into new markets?

We offer our new products and services in all locations where they are relevant and beneficial to clients. For instance, over time our innovations will be available in countries where we have recently expanded our EMEA presence. We have recently widened our local coverage in the Netherlands and opened new offices in Ukraine and Abu Dhabi.

In the Netherlands, Deutsche Bank has acquired approximately 20% of what was ABN Amro’s corporate banking business in The Netherlands, comprising a nationwide network of 13 SME branches, two mid-cap business branches as well as a domestic factoring company. Together with the business that we already had in Amsterdam, we have become the fourth largest corporate bank in the country and the Netherlands has become like a second home market for us. We are excited about the possibilities to expand our product and serve offering in this market and to reach out to new clients.

Is there a great deal of competition in that market? If so, how will you rise to the top?

I believe that we are very well positioned amongst the Dutch corporate bank competitors, as Deutsche Bank can offer local clients a truly international network. In terms of the technology we can offer, as well as the product range, I would like to think that we can bring much deeper and broader expertise into the mid-cap space. Whether it is a question of risk management tools, financing the supply chain, or capital market discussions, Deutsche Bank is well positioned to broaden the discussion away from a pure bilateral or bank lending driven model into a much more alternative funding model. This will help to prepare the broader market for any future uncertainty.

In conclusion, we want to bring easily usable risk management tools and some more sophisticated products into the SME segment in the country. Of course, this will mean working with our clients on the suitability side, so that we can deliver the right solution to the right client, we are not a bank that blindly pushes products. We want to be the leading bank to the corporate universe in the Netherlands, in particular to those companies that have international needs.

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