BNP Paribas pushes to digitalise pooling

Though there is light at the end of the coronavirus tunnel, for much of the world a long winter has yet to begin. Corporates must continue to carefully watch over their company’s finances using the lessons learnt during the spring, with one such lessons being the importance of cash concentration and pooling.

“During the crisis, the access to liquidity has become all the more critical and the benefits of the pooling solutions have become even more obvious for corporates.” says Mariya Tretyak, head of product management for the global cash pooling solutions at BNP Paribas. “Concentration and optimisation of cash and all of it being fully automated has been highly appreciated by the client.”

BNP Paribas currently handles cash pooling in more than 50 countries in both single and multi-currencies through a single global platform.

“Classical pooling is mono currency,” says Tretyak. “But we can also do it multi-currency by applying the pre-agreed FX rates when performing the sweeping itself.”

“Independently if a client opts for a mono or multi-currencies sweeping, BNP Paribas can help to administer their intercompany loans in a fully automated way.”

Even for their clients who have extensive and well built-up treasury management solutions, Tretyak says some see the benefits of allowing the bank to help them managing their inter-company loans resulting from pooling.

“The inter-company loan services include tasks like, calculating the cumulated lending and borrowing balances, providing different reports and settling the interest. The bank already has in place all the necessary tools to do so and we’re the closest to the origin of the inter-company loans being the sweeping of the different accounts.”

Self-administration

On top of the benefits of better cash visibility and control, digital pooling allows for corporates to be more flexible in adjusting their intercompany loans and pooling parameters in the face of tightening and ever-changing financial regulations.

“We have also seen over the past few years, quickly evolving tax, legal and regulatory environment around the intercompany financing, such as the base erosion and profit shifting (BEPS) provisions. As a result, it has become even more crucial for the corporates to be able to manage actively their intercompany loan related parameters rapidly in a flexible manner,” says Tretyak.

Digital pooling and digitalisation in general are not limited to automation of processes but offers corporates the ability for greater flexibility as it empowers them to make decisions and changes without the intervention of the bank.

“Digital pooling goes beyond just automation,” says Tretyak. “It’s also the self care functionalities for the intercompany loans. Through our platform Connexis Cash, not only do clients see the results of calculations on intercompany loans and their interest, but for example they can also adjust in real time, the inter-company positions, limits or the interest conditions.”

“What we are currently working on is allowing customers to modify the parameters related to the pooling itself.  For example, the customers will be able to adjust in real time, the targets, the minimum or maximum sweeping amounts. They will also be able to suspend sweeping and modify sweeping references appearing in the bank statements.”

For BNP Paribas, offering greater self-administration is one of the next key steps in the digitalisation process says Anthony Lafort, product manager of global channels.

“Digital has always been a strong component of our DNA, the self administrative capabilities have existed since day one on BNP Paribas’ Connexis platform. We are enriching it by adding new features like the real time and online user creation, or the full digital token activation for users.”

He adds that as banks continue to digitalise, corporates will no longer have need to depend on the bank to make changes to their cash pool set-up, improving their responsiveness and agility.

“This is part of the BNP Paribas’ strategy of our Global Channel offer to improve the user experience by bringing more digitalisation to the process and avoiding having breaks or pauses in the process as a result of not being able to do things on your own. Among this digitalisation strategy, the GPI metroline and benetracker (co-created with clients) or the FX transparency initiative can be given as examples.”