SMBC: How we helped juwi improve bank account management and streamline payments
When juwi, one of the world’s leading companies in the area of renewable energy underwent substantial expansion in Asia Pacific, its banking partner, Sumitomo Mitsui Banking Corporation (SMBC) noticed that the company’s treasury infrastructure created some challenges for its Singapore-based regional finance team.
Headquartered in Germany, the juwi group has been active in Asia Pacific since 2010, with over 1 GW of solar projects already delivered or under construction/planning. As a result of juwi’s dynamic growth in Asia Pacific, the group had a large number of bank accounts associated with their projects across different countries. This presented several challenges to the group. In addition, working with more banks made it difficult to standardise fees.
With efficient allocation of resources and a seamless implementation in mind, SMBC worked closely with juwi to rationalise its bank accounts while enabling the group to centralise control and visibility at the regional level in Singapore.
IDENTIFY THE PROBLEM
“One very important aspect of SMBC’s approach is how we connect with our clients. We deal with the issues on hand from their perspective as if we are the business owner. We partner each client in their treasury transformation journey, which includes identifying treasury activations, where they are in their current state of treasury health, and we identify any gaps in between,” said Lay Ling Koh, SMBC’s co-general manager, transaction banking solutions department, Asia-Pacific division.
By adopting SMBC’s regional banking platform SMART&TS, juwi gained visibility and control over its accounts across South East Asia. The platform further streamlined the group’s internal payment and reporting processes. By centralising its accounts with SMBC in South East Asia, juwi was able to achieve standardisation of bank fees and overall cost savings.
“As some of our entities’ payment functions are supported by the regional finance team based in Singapore, SMBC’s solution allows us to support payments through a regional electronic channel with a single login. At the regional level, this has eased our operational procedures and simplified our reporting process.” said Dr Valerie Speth, juwi’s regional director for the Asia Pacific region.
While Asia’s treasurers are rapidly adopting fintech solutions to ease pain-points, according to Koh, when it comes to analysing cash positions, 70-80% of corporates still use spreadsheets. Taking a more systemic approach, the SMART&TS system is an effective treasury tool that provides treasurers with easy access to cash balance reports from subsidiaries with graphical analytics. It is also flexible enough for clients to consolidate account information from other banks, in order to capture an overview of their treasury’s cash management position across this region.
“We are seeing a lot of demand from clients, who look to banks to be solution-providers instead of product pushing. We focus on how we can enhance the client’s treasury transformation and improve its overall health. It is a journey we take with our clients, rather than a transaction,” said Koh.
For Koh, the journey involves building trust, this ensures both the bank and clients work as partners when it comes to finding the right solutions and changing the way a treasury operates. This focus on building long-term relationships fits well with the business philosophy of SMBC. Headquartered in Tokyo, the bank operates 32 offices outside of Japan with recent expansion into Myanmar, the Philippines and India, plus reach within Cambodia and Mongolia.
While there are many sophisticated fintech products available to treasurers, how and what is needed depends on individual circumstances. Common pitfalls include inadequate planning, weak governance during implementation and lack of consideration of the key stakeholders’ requirements.
Rushing to invest in expensive platforms and systems without thorough consideration of user needs can potentially create additional issues. Assigning a designated project team to manage the roll-out of new technology helps ensure the project proceeds smoothly, and concerns are ironed out in a timely fashion.
Additionally, a lack of resources allocated to the implementation of new systems and having to solve unexpected delays mid-stream in a project, can turn what may once have been seen as a potential solution, into a costly problem-solving exercise. And, if the corporate treasury operations are changing, it is important that all stakeholders, such as accounting, finance and even sales departments need to understand, support, and buy-in to strategic change.
Koh believes there is no one-size-fits-all in treasuries, but she urges global or regional treasuries to tap into their country teams’ expertise to better understand local nuances.
Crafting bespoke solutions that address pain points and challenges means using both expert local knowledge and technology to streamline existing payments and collections processes, improve cash flow forecasting and reconciliations, create liquidity management solutions or simply to rationalise a clients’ bank accounts.
Asia’s fast-growing businesses and their treasuries face ongoing issues keeping tabs on liquidity and costs. But having a strong banking relationship can make a real difference to a treasury’s health and liquidity. “We embark on the long-term journey with our clients. The journey starts with the implementation of each solution, but we continue to engage our clients and evolve our solutions. Our partnership does not stop at the end of a solution,” said Koh.
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