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A TREASURER'S GUIDE TO CORPORATE TREASURY IN GERMANY 2014

T reasurers and cash managers in Germany are familiar and confident with the useof EBICS to communicate with their banks for domestic payments and cashmanagement. An innovative new proposition from BNP Paribas, ’Global EBICS’,

provides the ability to leverage EBICS not only domestically, but regionally or even globally.

EBICS: A Global ValueProposition

by Andrej Ankerst, Head of CashManagement, Germany andStephanie Niemi, Marketing e channels, BNP Paribas

The ‘Global EBICS’ solution enables ourcorporate customers to benefit from thevalue-added services offered by BNP Paribas at a global level.

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A TREASURER'S GUIDE TO CORPORATE TREASURY IN GERMANY 2014

A market standard for GermanyEBICS (Electronic Banking InternetCommunication Standard) is the mostcommonly used communication channel inGermany, used by around 95% ofcorporations. Treasurers and financemanagers are attracted to high levels ofsecurity, signature workflow and the abilityto communicate in a consistent way with allbanks in Germany using standard formats.Furthermore, EBICS can be integrated withthe company’s ERP (enterprise resourceplanning) system and/or TMS (treasurymanagement system).

Expanding the value of EBICSAs a major cash management bank inGermany, we at BNP Paribas are committedto supporting our customers’ payments andcash management requirements both withinGermany and internationally. With most ofour customers in Germany connecting to thebank via EBICS, we wanted to extend thesame convenience, security and standardisa-tion to their cash management business

globally. To achieve this, we have expandedthe use of EBICS across our entire network(‘Global EBICS’), enabling customers inGermany to leverage EBICS as a single,convenient and familiar protocol for theircash management activities, such as makingpayments and retrieving bank statements,not only domestically, but wherever in theworld they do business with BNP Paribas.

The ‘Global EBICS’ solution also enablesour corporate customers to benefit from the

value-added services offered by BNP Paribasat a global level, such as:

� A sophisticated offer for cross-currencypayments;

� Traceability services with Payment StatusReport messages (pain002 messages,including DK version) available for allpayment/collection methods across theBNP Paribas footprint;

� Enhanced reporting services for improvedreconciliation e.g., - debit/credit advices for SEPAtransactions (camt054)- virtual accounts solution

� Customised end of day accountstatements with enriched information(e.g., German GCV codes).

Furthermore, as Martin Postweiler, TreasuryIntelligence Solutions GmbH demonstrates(Box 2), Global EBICs is highlycomplementary with corporate cash andtreasury management solutions.

The ability to leverage EBICS for globalcash management, rather than simplydomestic cash management, has beenreceived enthusiastically by customersacross a wide range of industries,particularly mid-market companies (the so-called Mittelstand segment). Many of ourGerman customers work with BNP Paribas ina number of countries globally, or areplanning to do so, so they recognise thebenefits of leveraging a singlecommunication channel globally, rather thanimplementing a separate channel forinternational cash management.Furthermore, it allows companies thatcurrently use multiple channels torationalise these and replace them with

Box 2 - Complementary solutions

“As a leading cloud provider of payments, liquidity and bank relationship solutions,Global EBICS perfectly complements TIS solutions. It enables our German treasury clientswho operate internationally to work efficiently from all locations and dramaticallyreduces implementation costs.”

Martin Postweiler, VP Product & Client Services, TIS (Treasury Intelligence Solutions GmbH)

Box 1 - About EBICS

Since 2007, it has been mandatory for banks to support EBICS (Electronic BankingInternet Communication Standard), an open IP-based communication protocol forcorporate-to-bank connectivity. By using a common, bank-neutral protocol, corporationscan communicate with all banks in Germany consistently and cost-effectively. EBICS canbe used as the secure communication channel for transmitting SEPA Credit Transfer andSEPA Direct Debit instructions as well as other payment methods.

Global EBICs is highly complementary withcorporate cash and treasury managementsolutions.

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A TREASURER'S GUIDE TO CORPORATE TREASURY IN GERMANY 2014

EBICS, improving controls and reducingcosts.

Drivers of changeAn important catalyst for many of BNPParibas’ customers’ treasury and cashmanagement optimisation projects, such ascentralisation or enhanced bankconnectivity, is the introduction of SEPA.Most companies migrated to SEPA paymentinstruments on an ‘as is’ basis i.e., withoutchanging their business processes ororganisational structures. Now that mostcompanies in Germany have achieved SEPAcompliance, or are in the final stages ofdoing so, treasurers and finance managersare assessing the opportunities of aharmonised payment landscape. Inparticular, we are seeing a strong focus oncentralisation, standardisation and rationali-sation of banks, accounts and channels, notonly in the Eurozone but more widely.

There is a clear value proposition, forexample, to centralising payments through apayment factory or shared service centre(SSC). This is easier to achieve in a post-SEPA environment with consistent paymentinstruments across the Eurozone.Furthermore, ISO 20022 formats, on whichSEPA payments are based, are fast becomingrecognised as a global standard and can beused beyond SEPA both for cross-borderpayments but also for other domesticpayment/collections methods (such asconfirming in Spain, LCR in France or RIBAin Italy). As an active member of CGI, BNPParibas is closely involved with thedefinition of guidelines to expand the usageof ISO 20022 messages.

As corporates in Germany already haveEBICS in place, treasury or paymentscentralisation projects are often easier thanin other countries where no standardpayments protocol exist. However, in thepast the use of EBICS has been restricted todebit/credit domestic accounts so companieshave been obliged to introduce an additionalchannel should they need to manage non-German accounts. One such option is SWIFT,which is well-established as the industrystandard for global bank connectivity, andoffers a range of distinct benefits,particularly for multi-banked corporations;indeed, BNP Paribas is a strong proponent ofSWIFT and supports the largest number of

corporate customers using SWIFT of anybank globally.

However, companies in Germany thathave already integrated with EBICS, and/ orwork with BNP Paribas as their primary cashmanagement bank, are often keen toleverage their existing skills andinfrastructure rather than introducinganother channel with the associated impacton their existing internal organisation.Consequently, the ability to expand the useof EBICS from domestic to international cashmanagement is a compelling proposition, asThomas Woelk, Head of Corporate Treasury,Wacker Neuson SE notes (Box 3). Inparticular, treasurers and finance canleverage an existing channel to:

� Facilitate regional or global treasuryand/or payments centralisation;

� Standardise processes and controls thatare in place in Germany by rolling themout globally;

� Reduce the number of bank channels that

are used globally;� Achieve greater process automation by

integrating EBICS with ERP and TMSglobally, therefore increasing straight-through processing (STP) rates;

� Use a global treasury management systemconnected to EBICS to enable overseassubsidiaries to access the solution;

� Act as catalyst for rationalising banks andaccounts through BNP Paribas’ globalnetwork.

In summary, BNP Paribas has enhanced themarket-leading communication standardEBICS from a purely domestic Germanchannel to a global one. It now offersmultinational corporates the ability to useEBICS on a global scale, with particularapplicability for payments centralisation.With SEPA migration now coming to an end,and increasing number of corporates arenow likely to migrate to payment factories,BNP Paribas’ global EBICS offer will be anattractive proposition. �

BNP Paribas has enhanced the market-leading communication standard EBICS froma purely domestic German channel to aglobal one.

Box 3 - Sharing experiences

“Wacker Neuson has a particular interest in solutions that allow us to leverage our e-Banking platform globally using common standards. In particular, we recognise the costsavings and strategic advantages of centralising skills, rationalising our technologyinfrastructure and achieving higher levels of straight through processing for bothincoming and outgoing payments.”

Thomas A. Woelk, Head of Corporate Treasury, Wacker Neuson SE

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