ACB Profile: Tim Slater, HSBC Australia
(Australia) - Corporate clients are demanding more from their banking relationships, and the banks are responding to that in a number of different ways.
One key area of change has been the traditional transaction banking space, where some banks are taking a new approach and trying to bring a more holistic or integrated approach to this nuts and bolts area of corporate activity.
At HSBC, Tim Slater is the Australian Head of Corporate Banking, and he uses the example of a supermarket to illustrate the difference.
"We used to stack the shelves with banking products and push them at the customer," says Slater.
"But I think the whole concept has changed much more towards packaging and what we at HSBC call customer needs fulfilment, rather than simple provision of working capital.
"It involves ascertaining what customers' needs are, how they do their business, and devising tailored solutions to resolve them."
Slater says that while the products have not fundamentally changed, they are being repackaged in a new way which are tailored to individual client needs.
He sees the end of the "silo effect" of offering products in isolation to a situation where the bank considers how a combination of a range of products - from derivatives to cash management - will impact on a client.
"Treasury services used to be selling what have become like commodity products, such as forward forex deals," he says.
"Now the approach we take is to understand the customer's business, their business flows, what inherent risks they've got in terms of foreign exchange and interest rate risk.
"We ascertain what their policies are in relation to managing those risks, their appetite to risk, and then come up with a packaged solution - a risk management solution which would incorporate a range of products.
"Silos are a bad concept anyway, and we are moving our organisation away from a situation where it is driven by our internal processes and our products, to one which is focussed on customer need."
Slater contends that, as a small operation in Australia, HSBC is in a better position to do this than some of the big local players.
"We expect our relationship managers to be much broader because we are not big enough to have those silos in the first place," he says.
"In a small operation you can refine focus and strategy quickly to meet market or customer needs, and that is working well for us in Australia in an area like trade, where we do a lot of business.
"We review the customer's trade or working capital cycle, their debtors, creditors, work in progress, finished goods inventory, etcetera, and then provide a working capital facility to match that trade cycle.
"That's not something we tend to do with multinationals, because they borrow through the commercial paper markets or with revolving working capital lines, but at the smaller end of the market clients benefit from the disciplines of a structured trade facility, especially as their financial control and management arrangements may not be strong. From the Bank's perspective this reduces the risk that working capital will be diverted to other uses."
At HSBC, Tim Slater is the Australian Head of Corporate Banking, and he uses the example of a supermarket to illustrate the difference.
"We used to stack the shelves with banking products and push them at the customer," says Slater.
"But I think the whole concept has changed much more towards packaging and what we at HSBC call customer needs fulfilment, rather than simple provision of working capital.
"It involves ascertaining what customers' needs are, how they do their business, and devising tailored solutions to resolve them."
Slater says that while the products have not fundamentally changed, they are being repackaged in a new way which are tailored to individual client needs.
He sees the end of the "silo effect" of offering products in isolation to a situation where the bank considers how a combination of a range of products - from derivatives to cash management - will impact on a client.
"Treasury services used to be selling what have become like commodity products, such as forward forex deals," he says.
"Now the approach we take is to understand the customer's business, their business flows, what inherent risks they've got in terms of foreign exchange and interest rate risk.
"We ascertain what their policies are in relation to managing those risks, their appetite to risk, and then come up with a packaged solution - a risk management solution which would incorporate a range of products.
"Silos are a bad concept anyway, and we are moving our organisation away from a situation where it is driven by our internal processes and our products, to one which is focussed on customer need."
Slater contends that, as a small operation in Australia, HSBC is in a better position to do this than some of the big local players.
"We expect our relationship managers to be much broader because we are not big enough to have those silos in the first place," he says.
"In a small operation you can refine focus and strategy quickly to meet market or customer needs, and that is working well for us in Australia in an area like trade, where we do a lot of business.
"We review the customer's trade or working capital cycle, their debtors, creditors, work in progress, finished goods inventory, etcetera, and then provide a working capital facility to match that trade cycle.
"That's not something we tend to do with multinationals, because they borrow through the commercial paper markets or with revolving working capital lines, but at the smaller end of the market clients benefit from the disciplines of a structured trade facility, especially as their financial control and management arrangements may not be strong. From the Bank's perspective this reduces the risk that working capital will be diverted to other uses."
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