With the rapid development of China's economy and continuous promotion of the country's "Belt and Road" strategy, more Chinese enterprises have begun their expansion overseas in recent years through cross-border mergers, acquisitions, direct investment, joint ventures and other ways to actively explore overseas markets.
Ways to efficiently allocate and control the global financial resources as well as improve the level of global treasury management under cross-border, multi-currency, cross-time zone, multi-bank and multi-language environments have become the keys for enterprises moving forward.
Cross-border treasury management is the new essential for global corporations
Global treasury management refers to control and management of treasury for its member enterprises by the global group headquarters in order to timely and accurately grasp information of domestic and foreign treasury, unify management of domestic and foreign collections and payments. The proper allocation and management of global treasury will strengthen group control efforts and effectively reduce the risk of transnational operating treasury.
Global treasury management covers a wide range of areas and a variety of businesses according to different dimensions that can be divided into different ways. There are 4 areas of management functions:
1. Liquidity management including global treasury account management, revenue and expenditure settlement, domestic and overseas treasury pools, treasury planning, treasury scheduling, etc.
2. Investment and financing-related management including the management of financing channels, financing entities, currencies, duration, cost control, credit lines, guarantees, investment varieties, duration, income, etc.
3. Risk management including liquidity-related risks, market risks, exchange rate risks, operational risks, etc. through the use of various technical and business means to analyze and predict risks, ensuring normal operation of the group’s treasury
4. The group's overall operational management and control of financial resources, treating all treasury-related businesses within the group as financial resources and conduct unified configuration, scheduling, monitoring and data analysis.
Why is Global Treasury Management Model essential?
The treasury chain is the blood for the survival and development of enterprises. If cross-border treasuries are not well managed, it will have a huge impact on the financial capabilities and international competitiveness of the enterprise, becoming a powerful obstacle to the sustainable development. Therefore, global treasury management is an essential choice for transformation for the global development of enterprises.
New problems give birth to new methods - Fintech empowers cross-border treasury management
Treasury management for enterprises is not a new topic anymore. Many large domestic enterprises have years of experience in treasury management. There are generally two ways to achieve domestic treasury management for enterprises:
First, relying on the cash management platform of domestic banks to build an account system that manage the enterprise’s own business treasury. Large state-owned or national joint-stock banks have a fairly complete cash management service system, providing features such as parent-subsidiary accounts, treasury collection, payment and settlement, etc. The investment in this method is less, but the autonomy and controllability of the business is slightly worse.
Second, the group build its own multi-bank treasury management system and cooperate with multiple banks to provide member companies with services such as treasury collection, revenue and expenditure settlement, internal credit as well as bill management. This implementation is more autonomous and controllable but the complexity of investment and management is also higher.
However, managing and allocating treasuries on a global scale is more complicated than domestic treasury management methods, facing the challenges as below:
1. The need to manage the treasury accounts of dozens or even hundreds of cooperative banks distributed in different countries around the world
2. The need to adapt to payment, settlement and regulatory compliance systems under different legal frameworks in different countries
3. The need to deal with global multi-currency and cross-time zone payment and settlement needs, etc.
Banking industry is the most important part of the financial landscape. It ranks first in the financial industry in terms of asset scale, IT investment and information construction level. With the gradual maturity of fintech technologies such as big data and AI, the banking industry is actively using fintech to empower global treasury management and working with fintech companies to build a global treasury management system:
• Using multi-time zone design to meet the differentiated calendar and time zone definitions of different countries
• Using multilingual design to meet different cultural customs and language environments, a flexible and configurable global account system
• Using multi-currency method for clearing and settlement between currencies of different exchange rates, etc.
It has greatly solved the major problems of global capital management and provided important references for the global capital management. Many enterprises have since followed suit and joined hands with Fintech companies to build a global capital management system. Fintech empowers corporate groups to build their global capital management is now a general trend.
The innovations of Sunline Global Treasury Management System
With a deep understanding on the global financial business chain as well as strong technical strength, Sunline has developed a global treasury management system based on mature architectural technology and internationalization experience in the banking industry, providing a full range of business support for the global capital operation management of China's multinational groups.
Sunline Global Treasury Management System is based on the technical system structure of commercial banks, using big data and digital tools to provide enterprises with collection and payment settlement, international business, investment finance, internal credit, capital planning and other diversified treasury management services. The system makes the liquidity of treasuries as the core to build the settlement account management system for enterprises and facilitate the collection and payment business, at the same time, providing all the treasury operation content including liquidity, investment and financing, risk, capital analysis for different levels and different objects of treasury management to meet the different management needs of the group as well as to achieve the comprehensive management and efficient operation of treasuries of enterprises.
As a leading financial technology company with financial solutions as its core business, Sunline has rich practical experiences in the field of banking solutions. In addition to serving well-known domestic banks such as Ping An, Agricultural Development and Shanghai Pudong Development Bank, Sunline also have foothold in Southeast Asia providing enterprises with "internationalized and integrated" financial services to empower the construction level of the enterprises’ global capital management system and boost the overseas development of enterprises.
