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<ul><li><p>BEST OF CASH </p><p>GO DIGITAL AND DISCOVER MORE ABOUT OUR CASH MANAGEMENT EXPERTISE AND SOLUTIONS AT WWW.CASHMANAGEMENT.BNPPARIBAS.COM</p><p>OUR EXPERTS STANCE ON WHAT COUNTS THE MOST IN CASH MANAGEMENTSEPTEMBER 2015</p><p>MANAGING COLLECTIONS Why Collections are the talk of the town</p><p>PLAYING HERE AND ABROAD Asia, a far from harmonious payments market</p><p>TRENDS AND VISION Never waste a good recovery</p><p>DIGITAL BANK &amp; REPORTING The quiet revolution of reconciliation</p><p>OPTIMISING LIQUIDITY International cash pooling in China: To join the pool, follow the rules</p></li><li><p>126 20Trends &amp; Vision Optimising LiquidityDigital bank &amp; Reporting</p><p>International cash pooling in China: To join the pool, follow the rules 20</p><p>Yield under strain in a low interest environment: Striking the right note 22</p><p>The quiet revolution of reconciliation 12</p><p>Smart systems, smart fraud 15</p><p>Integration: complexity made safe and simple 16</p><p>XML: the discrete genie in a bottle 18</p><p>In a fast changing world, agility is key 6</p><p>Never waste a good recovery 8</p><p>Is china leading the e-payment momentum? 10</p><p>India: a quantum jump into the mobile age 11</p></li><li><p>24 33 42Managing Collections Paying here &amp; abroad About us</p><p>Asia, a far from harmonious payments market 33</p><p>Finding your way in the payment factory maze 36</p><p>Obstacles and incentives to mobile payments in the US 38</p><p>Cross-currency payments: international payments with an FX flavour 40</p><p>Global footprint, local player 42 </p><p>Our transaction bankers share their views 42</p><p>BNP Paribas business model: robust and effective 43</p><p>How Virtual Accounts respond to your new collection challenges 24</p><p>Improving the collection process to better manage treasury 26</p><p>Why collections are the talk of the town 28</p><p>Questioning the dogma of centralisation 30</p></li><li><p>A few years back from now, I was struck by the forward thinking claim of a leading world electricity supplier. They argued that they owed their clients more than electricity to switch on the light. I saw it as the expression of an enlarged role, one that any major company should play in todays world.</p><p>Looking back, I find it more relevant than ever. Indeed, it is precisely how I see our mission as BNP Paribas cash management experts.</p><p>I personally believe that we owe all of the businesses that entrust us with the management of their treasury more than the most relevant, efficient and innovative cash management responses. These are prerequisites. They support our core mission, but the truth is, there is more to it.</p><p>In todays world, any company that aims for a sustainable leadership cannot solely rely on the quality of its offers and services, however proven and innovative these might be. Rightly so, the markets -and society at large- expect more. </p><p>EDITORIALWE OWE YOU MORE THAN THE BEST CASH MANAGEMENT PRACTICES</p></li><li><p>I also personally believe that in addition to offering smart and state-of-the-art treasury management solutions, we owe you a continuous and fruitful dialogue on the multiple aspects, challenges and impacts of transaction banking as a pillar of corporate strategy and success. Evidently, such dialogue is, first and foremost based on your relationship with our advisory and sales teams. This is critical to us, but yet again, we owe you more.</p><p>Because the scope of corporate treasury management is constantly broadening, so are the related issues that we as a community must address, whether closely related to our core mission -like managing payments or optimising collections- or apparently more remote from it -like the digitisation of our economies or the emergence of communication technologies and standards that make it possible to do more with less.</p><p>As treasury management has become a driver for progressive corporate strategies, and as the roles of CFOs and treasurers broaden and are increasingly more strategic, we have more conversations to engage in, and more to share. Catering for the needs of 40,000 corporates in 60 countries, we have relationships with no less than 2,500 transaction banking professionals. Our vision of how markets evolve, which trends most impact companies, how corporate treasury is transforming and how you can take advantage of change draws from this extensive field experience.</p><p>By launching www.cashmanagement.bnpparibas.com a year ago, we triggered the conversation. Today, we want to continue it and Eurofinance Copenhagen appears as a formidable opportunity to launch a new initiative that is consistent with our philosophy. So we have gathered some of the best content from our website and created a magazine to share our vision and thoughts with you.</p><p>Welcome to Best of Cash, a BNP Paribas Cash Management publication that has been designed for all corporate treasury professionals. It contains a selection of our most advanced reflections in the field of working capital management, all collected from www.cashmanagement.bnpparibas.com.</p><p>We hope that you will find this information helpful and that you will enjoy reading through it. Please share your comments and suggestions to help to make it even better.</p><p>Best,</p><p>Pierre Fersztand, BNP Paribas Global Head of Cash Management</p><p> 5</p><p>Visit o</p><p>ur ca</p><p>sh m</p><p>anag</p><p>emen</p><p>t web</p><p>site: </p><p>cash</p><p>mana</p><p>geme</p><p>nt.bn</p><p>ppari</p><p>bas.c</p><p>om</p></li><li><p>can be a key part of their taking-advantage-of-a-changing-world kit.</p><p>A well-designed liquidity management strategy brings many benefits, in addition to traditionally improving control and visibility. Yet, both remain primary challenges for corporates of all sizes, and its easy to understand why. In a global environment, keeping control over cash is much more difficult and as much essential.</p><p>A MORE SOPHISTICATED APPROACHBut that is not all there is to it. As companies go global, new cash related challenges arise: from making successful international </p><p> No wonder liquidity has become a critical issue for corporates: an efficient liquidity management strategy translates into more financial power and agility to project into the future. Simply put: liquidity management means agility; and in a fast changing world, agility is the word. </p><p>TAKING ADVANTAGE OF CHANGETo take advantage of change, corporate treasurers must first understand it. In which area of the world will growth be the strongest tomorrow? Is producing in a restricted market the right strategy? Which megatrends will impact my business and how? It is one thing to know that a middle-class is emerging in Asia, but understanding how it will transform the marketplace is another matter. And its even more of a challenge to know how to manage my cash to grasp the opportunities that it will bring. Clearly, corporates must adapt, and improving the management of their liquidity </p><p>As external liquidity has turned scarce, treasury departments have become the focus of attention. Yesterday perceived as an operational player, the treasurer is now seen as a strategic internal stakeholder. In organisations where cash is king, central treasuries have become fully-fledged in-house banks. If corporates tend to manage their liquidity like a strategic asset, it is because cash gives them the freedom to act, to invest, to develop and to transform. Yes, the treasurers role is undergoing major transformations. But then it seems that everything around us is changing.</p><p>Trends &amp; Vision</p></li><li><p>AGILITYIS KEY</p><p>payments to releasing trapped cash. As a result, the treasurers toolkit must have solutions to mobilise cash in a volatile market environment where risks -liquidity, currency and counterparty- must be anticipated upon and carefully managed.</p><p>Asia offers amongst the highest potential and the biggest challenges. From a cash point of view, it is made of restricted and regulated markets, plus others that apply pretty much the same rules as in the west. Operating in Asia means dealing with more currencies, languages and regulatory frameworks than ever before, which adds to the overall complexity of being far from home. </p><p>The good news is: things are moving fast in China and change is expected in other parts of the region. With the RMB on the verge of deregulation, corporates can see their prospects broadening, and many are adjusting their cash approach accordingly.</p><p>I DO, BECAUSE I CANIf change can be driven by technology, technology can also be driven by change. Whatever comes first is not that important after all. At the end of the line, there is always increased competitiveness, market share and leadership. Liquidity management is no exception to the rule, with technology leading to innovative corporate strategies.</p><p>BNP Paribas is constantly investing in technology. The Connexis Cash and Liquidity platform is one good example of the Banks commitment. Extended to deliver improved visibility of cash positions, Connexis offers real-time views of all cash balances and significantly improves flexibility and productivity. Mobile services are another area of progress for liquidity management. Right now, mobile services are mostly focused on providing access to information and making remote signing possible, but over time, increased functionality will be added. Ultimately, it is expected that the full functionality of a desktop platform will be available for mobiles. </p><p>IN A FAST CHANGING WORLD,</p><p> 7</p><p>Visit o</p><p>ur ca</p><p>sh m</p><p>anag</p><p>emen</p><p>t web</p><p>site: </p><p>cash</p><p>mana</p><p>geme</p><p>nt.bn</p><p>ppari</p><p>bas.c</p><p>om</p></li><li><p>NEVER WASTE A GOOD RECOVERYIndeed, there is a real chance that countries will use the improved economic situation as an incentive to tone down planned reforms and debt reduction. It is tempting after a protracted period of weak growth and crisis to sit back and relax during an economic upswing. Tensions between Germany and countries from the periphery have at times put European cohesion to the test. Weak growth, cutbacks and structural reforms have come at a considerable cost to the political capital of different governments and political parties. One only has to look at the electoral victory of Syriza in Greece or the rise of Podemos in Spain.</p><p>Although it would be understandable from a political perspective, it would be a big mistake if we were to use the cyclical upswing to again shelve reforms and debt reduction. Institutions such as the International Monetary Fund are warning that Western growth potential has been structurally weakened. In that light, this years stronger growth is but a temporary phenomenon and certainly not a return to the good old boom years. Potential growth in developed industrialised countries has been on the decline for some time. Two main causes are the structurally lower growth of both productivity and population, but the aftermath of the financial crisis also plays a role. In the years preceding the financial crisis we fuelled economic growth by debt. Today, we have to repay that debt with reduced repayment capacity.</p><p>One of BNP Paribas most influential chief economists, Peter De Keyzer, argues that as Europe has entered its post-crisis recovery phase, its economic growth must build on sturdy foundations. The strong economic recovery should be used to open up the bonnet of the European economic engine and increase its capacity in a structural way.</p><p>Now we must be sure not to waste the recovery. Economic growth in Europe is expected to be stronger than anticipated this year. The combination of low oil prices, a weak exchange rate and ultra-low interest rates will give the economy a strong boost. Is this good news? Yes, for now...</p><p>Trends &amp; Vision</p></li><li><p>Structurally weaker growth has a number of disadvantages. First, it threatens to erode financial stability: the zero-interest policy of central banks is aimed at boosting growth, but at the same time it increases the likelihood of bubbles and thus financial instability. Structurally weaker growth also makes it more difficult to build financial buffers against the next crisis, i.e. reduce debts. Yet we must continue to reduce debts. Not because we enjoy it, but because we need to create budgetary margin to absorb future economic </p><p>shocks. Creating budgetary safety margins is not so easy when growth has been structurally weakened. It is like having to build a dam with a spade when we had counted on a bulldozer.</p><p>This is why we need now, more than ever, to swap our spade for a bulldozer again. In other words, to boost our potential growth. Just to be clear: we will not do this by creating more debt. In Europe, we can do that by getting more people into employment, allowing the retirement age to evolve in parallel with life expectancy and by focusing more on innovation and education, for example. Reducing our debt and increasing the economys staying power that is what we need more than ever. The sunny economic weather is no excuse to cruise along at low speed. On the contrary, it is an ideal time to shift to a higher gear. Never waste a good recovery. </p><p>Peter De Keyzer has a dedicated blog: https://blogs.bnpparibasfortis.com/peterdekeyzer/fr</p><p> Never waste a good crisis. It was advice we kept on hearing during the euro crisis. Periods of major financial and political stress created the necessary support to drive continued integration of the euro zone. Joint emergency funds, tighter supervision of budgetary and structural policy and unified European supervision on the banking sector were not a matter of course. The intense financial-economic turbulence facilitated political measures which would have been impossible in normal times. We certainly did not waste the crisis. </p><p> 9</p><p>Visit o</p><p>ur ca</p><p>sh m</p><p>anag</p><p>emen</p><p>t web</p><p>site: </p><p>cash</p><p>mana</p><p>geme</p><p>nt.bn</p><p>ppari</p><p>bas.c</p><p>om</p></li><li><p>CHINA LEADING THE E-PAYMENT MOMENTUM?</p><p>IS</p><p>Before moving on to the B2B scene, mobile payments are usually first adopted by consumers. From looking at the boom of e-consumption in China so far, it should only be a matter of time before e-banking makes its way to many of the countrys corporate treasuries. </p><p>Chinas progression in e-commerce is both outstanding and fast. At the beginning of the new millennium, it had no infrastructure to support e-commerce; whereas by the end of 2013, the country boasted nearly 600 million Internet users and was already a blooming market. According to Chinas market leader Alibaba, the total value of merchandise bought online in 2012 was greater than that of Ebay and Amazon combined. By 2016, the e-commerce giant expects to pass Wal-Mart as the #1 retail network in the world.</p><p>Alibabas ambition is fully supported by the Chinese government. According to KPMGs E-commerce in China: driving a new consumer culture study dated January 2014, the Chinese Ministry of Industry and Information Technology has engaged in an ambitious 5-year plan from 2011-2015 to turn the Middle Kingdom into a global e-commerce leader.</p><p>DRIVEN BY TECHNOLOGY BUT NOT ONLYBack in 2012, China was already the worlds largest smartphone market, with a record share of computer and smartphone owners. The Chinese middle-class purchasing habits were already, and still are, strongly technology oriented. Luxury goods are another area of high interest for the Chinese middle-class. Many purchase them abroad either on business trips or on vacation, with Austra...</p></li></ul>