Bank Interview: Richard Dallas, Lloyds Bank

Published: Mar 2012
Richard Dallas hero image

In these straitened times, it is important for companies to keep pushing forwards. We speak to Richard Dallas about ways in which corporates and banks can work together to create solutions that overcome the unique growth challenges of today’s operating environment. We also discuss the inherent value in recognising innovative projects and best-in-class treasury practice.

Richard Dallas

Managing Director

Richard Dallas holds the position of Managing Director, Transaction Banking at Lloyds Banking Group, part of the Group’s Wholesale Banking & Markets division. As the recipient of significant investment for 2012, Richard’s focus is on delivering the benefits of that investment, and ensuring that Lloyds Banking Group becomes the UK’s leading house bank.

Prior to joining Lloyds Bank, Richard was the Director of Strategy, Product Development and Change for Barclays Insurance where he successfully launched a range of general, health, business and life insurance products. He also led a successful response to the PPI regulatory risks. Preceding Barclays, Richard was Business Development Director to Sage SME division where he delivered 10% per annum growth of the service business, major customer retention improvements and diversified the service offering.

Earlier at Charles Schwab Inc. Richard was Head of Products then European Marketing Director. He was responsible for asset and income growth, rapid migration to e-channels, and the launch of a range of products which included ISAs, SIPPs and Funds Supermarket.

Richard holds a Business Economics degree from the London School of Economics, a Diploma in Marketing and MSc in Marketing Management.


Lloyds Bank is sponsoring Treasury Today’s Adam Smith Awards 2012. Why do you consider it important to support this initiative in particular?

The Adam Smith Awards are about encouraging and highlighting best practice and innovation in the industry. Not only is this an excellent showcase for talented individuals and teams within the corporate treasury space, but it’s also a great opportunity to demonstrate the effective partnerships in place between businesses and banks.

From our experience of having one of our clients win an Adam Smith Award last year, we recognise that people take genuine pride in what they’ve done and how they have worked together to achieve the best possible solution.

Our sponsorship of Treasury Today’s Adam Smith Awards 2012 demonstrates how much we support what these Awards stand for. It also reflects the importance and priority that we are giving to transaction banking and the related market space.

We are proud to be able to champion the largely unsung work that treasurers do in what has become a vital function in the corporate world today.

Do you think the tough economic climate has actually made corporates more innovative?

There is no doubt that the continuing tough economic environment has caused treasurers to look again at their practices and see where they can be improved, which in many cases will lead to innovation. At Lloyds Bank, we are certainly seeing some different requests coming through from corporates, compared to say, five years ago.

However the most interesting change has actually been the way that corporates are now approaching solutions. They are no longer simply coming to us and saying, ‘I need x or y solution’. It’s a far more open discussion along the lines of, ‘These are our challenges, how can you help us?’ or ‘We’re trying to crack this market, what’s the best way to go about it?’

In other words, the ideas and innovation are coming out of collaborative conversations. Treasurers have adopted a much more open-minded approach to solutions. In addition, it’s very refreshing that there’s a definite feeling of treating the regulation that is hitting the financial services industry as a joint challenge. We are working together with our clients on ways to overcome the impact of such regulation.

Could you give an example of this perhaps?

Yes, we worked very closely with Unipart on a SEPA Direct Debit solution recently. With a presence across Europe and a commitment to ‘The Unipart Way’ – a proprietary philosophy that embraces lean tools and techniques – the Unipart Group was the ideal candidate to be an early adopter of the SEPA Direct Debit scheme. Shared Services Manager Mike Morris confirms that the full service logistics provider is reaping the benefits of this ‘major opportunity for enhanced efficiency’.

SEPA DD has changed the landscape of European payments, and adoption is expected to become mandatory across the Eurozone for businesses of all sizes in the next few years. In the UK, Lloyds Bank Wholesale Banking & Markets has been quick to facilitate the adoption of the scheme, with an offering that enables customers to be debtors and creditors for direct debits on a pan-European basis.

Attracted by the efficiency of collecting payments into one bank and one bank account, Unipart has embraced the scheme and was fully migrated by the end of last year. Having started roll out in Italy, mandates quickly followed in Belgium, Austria, France and Germany. SEPA DD created the opportunity for Unipart to introduce direct debit payments for the first time in some jurisdictions, where previously cost and complexity made opening accounts an inefficient option. It is a significant advantage for companies with a European presence.

At Wholesale Banking & Markets, we are dedicated to supporting customers in all cash management transactions. Our relationship managers are experts in advising and supporting clients as they implement SEPA solutions, and seek to maximise their benefits. With SEPA DD migration deadlines set for early 2014, there’s no doubt that the time for planning and preparing is now.

How is Lloyds helping its customers through these challenging times?

We are six months into a three and a half year investment plan into transaction banking. So our focus is driving out much greater product capability to the customer-base. That’s across all aspects of treasury operations from cash management to working capital and financial supply chain solutions, to card solutions.

One of the ways we are rolling out this improved product capability is through a new generation of technology. We are investing in building out the capabilities of our recently launched Arena e-platform to create a leading, third-generation portal. This will effectively offer clients the ability to access all their core products and services, not just from transaction banking but across our wider product set. This means that in the future, clients will be able to do all their cash management, trading, FX risk management, interest rate risk management and so on from a single portal.

Today, Arena – our online trading platform – offers our customers a comprehensive e-solution which combines foreign exchange and money market deposits trading with economic insight and market analysis. In the next few months, the transaction banking elements of the platform will be enhanced offering our clients balance and transaction reporting along with cash flow forecasting functionality. Clients will be able to view the balances and transactions for accounts registered in Arena including those held with other banks. Cash flow forecasting will allow clients to manage and control their cash by forecasting their investments and outgoing payments.

Arena’s proposition centres on the customer’s ability to combine online trading with the research, data, analysis and reporting that gives them their ‘best view of the markets’ to support their trading and hedging decisions in one single view. Additional transaction capability is seen as a key development milestone for Arena in delivering an end-to-end cash management proposition.

Maintaining a leading host-to-host channel, linking up information from the bank’s systems to the client’s ERP system is another priority for us on the technology front, and technology for mobile devices is an additional area of planned investment from a software point of view. These technological developments are all designed to add real value for the treasurer, giving both cost and operational efficiencies.

What about specific product developments that help treasurers to achieve best practice?

Significant areas of focus for Lloyds Bank are all of our payment and international services, information services and reconciliations. Clients are turning to us to help them make such processes more efficient and to help them improve their working capital situation on a cross-currency, cross-jurisdictional basis. Naturally this involves investment in the integration of our partner bank network as well as further investment in cross-border liquidity solutions.

Another area that we are investing in is the commercial cards space. In fact, 2012 will see the launch of five new card products from Lloyds Bank, which will complement our existing corporate card and p-card solutions. However, we are also working extremely closely with our clients to ensure that the true benefits of such implementations are felt across the organisation. This means assisting clients in the optimisation of card programmes to ensure they achieve best practice.

In order to provide the best possible service to our clients, we are also expanding the size of our team. We will be growing our network of product and sector specialists, as well as relationship managers, by over 20% this year. That is absolutely the focus for us as we strive to help our clients’ businesses to grow and evolve.

Looking ahead, which areas of corporate treasury do you think will be most in focus over the next 12-24 months and why?

The financial supply chain has definitely become a key area of focus again. Corporates are either looking for financial support for their supply chain, or to realise cost savings within it. We’re seeing growing interest in financial supply chain solutions from the private sector, the public sector and non-bank FIs.

The second big topic that will continue to be a concern for the foreseeable future is the focus on risk, in particular counterparty risk. In fact there is growing risk awareness around countries, currencies, banks and suppliers. It is not surprising therefore that we are seeing companies adding to their panel of banks, especially among the mid and large corporates.

Is that purely a risk play though?

No, this is a reflection on many things, not just risk. For example, it could reflect the evolving nature of the company and where they are trying to grow or shrink. It could also be a reflection of the fact that certain banks are scaling back their operations in some countries and concentrating on what they consider to be core activities.

Another topic that is front of mind for treasurers at the moment is planning for different scenarios – what happens should some of the financial challenges across Europe translate into a change, for example. That might mean alterations to where companies source funding, what currency they trade in, and general conditions for trading through to the interest and inflation environment in a particular country. A change doesn’t necessarily have to arise purely out of an exit from the euro, if Greece writes down its debt for example, then being in Greece has a very different potential return profile.

Finally, coming back to the topic of innovation, which developments over the last decade or so, do you think have had the greatest impact on corporate treasury?

There have been a number of interesting and exciting developments, but there are three that I would pinpoint as adding true value for corporate treasurers. The first of these, in particular for businesses of scale that have a centralised treasury in place, is the development of host-to-host solutions. Having the straight through benefits of such solutions is a real positive for corporate treasurers. For example, we worked with Virgin Atlantic to create our own solution, ‘Host to Host’, which allows the client to integrate their payments systems with ours, letting them save time, reduce risk and increase the efficiency of their treasury processes.

In my opinion, another great development that has happened in the last ten years has actually been the introduction of the SEPA Direct Debit. As I alluded to with the Unipart project, the SDD has enabled treasurers to dramatically simplify and standardise the operating components of their AP/AR functions. Although many companies are yet to embrace SEPA, when the 2014 deadline arrives, I think the SDD will really be viewed as a substantial opportunity. And let’s not forget that this is one example of something good to come out of regulation!

Finally, mobile and contactless payments are undoubtedly changing the way corporate treasurers think. There has been, and will continue to be, a dynamic change in the evolution of mobile and contactless payments. We see an increasing interest from the larger corporate community in these fast-developing payment acceptance technologies. Our corporate clients are now keenly interested in managing payments more effectively to give customers a different, more sophisticated experience.

We estimate that there are currently over 15m contactless cards in circulation and we expect that to rise to more than 20m this year. Mobile phone payment facilities will also gather pace during 2012 and it is not just the youth generation that is showing an appetite to move to cashless payment methods. So as demand increases, supply will follow. All banks need to keep pace with rate of change and innovation in the payments arena to offer customers excellence in 21st century banking.

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