Multibank Relationship Management in Middle East and Africa

12 Multibank Relationship Management in Middle East and Africa in the foreseeable future, but it can serve as a powerful enabler for improving efficiency where infrastructure allows – still rather for tactical than strategic items that require contextual judgement. Long term adoption will strongly depend on regulatory reforms – resulting in better data quality standards, open banking initiatives and broader digitisation efforts of corporate treasuries. Bank account/relationship rationalisation and treasury policy Bank relationship rationalisation is the process of evaluating the necessity of each banking relationship and consolidating accounts where possible, this can reduce administrative burdens and associated costs. This strategy involves assessing the benefits derived from each bank and discontinuing relationships that offer minimal strategic benefit or where the interaction requires manual involvement. Rationalisationmay have internal or external hurdles such as in country teams reluctant to followmandates set out by regional treasury to close/open bank accounts with old/new banking relationships. A beverage MNC stated that “ local teambuy-inwas imperative to implementing a rationalisation project that took over a year to complete ”. Best practice across MNCs is typically to centralise domestic and cross border payments to one or two banks, while collections may remain fragmented and can easily be resolved with automated sweeping (via SWIFT rails or via standard settlement instructions). We have seen that global or regionals bank rationalisation projects are rather ad-hoc and followed by establishing a firmwide treasury policy regulating the approach towards setting up new bank relationships. What is not yet as common, is defining numerical (statistical) triggers that would define the need for new bank account (i.e. minimum liquidity levels in certain currency or min. FX exposure under specific currency pair, min. number of payments or transaction value per month). Leveraging relationships with global banks and establish bank tiering Collaborating with global banks like Citi that have an extensive network within the MEA region can reduce the need for multiple local banking relationships. Global banks often offer comprehensive services across various geographies, providing increased visibility and consistency, enabling MNCs to streamline their banking operations. For example a German based technology conglomerate defines tiers for their banking relationship as follows: 1. Global banks for strategic relationship, liquidity management and cross-border transactions, 2. Regional banks for regional expertise, footprint and regulatory compliance, 3. Local banks for market-specific requirements like local payments or cash collections. Training and development programmes Investing in training programmes for treasury and finance teams facilitates that staff are well-versed in regional regulations, technological tools and corporate governance practices. Continuous professional development fosters a culture of compliance and operational excellence, equipping teams to helpmanage complex banking relationships effectively. For example, Citi’s client advisory group is running a Client Training Academy in different locations across Middle East and Africa which is targeted to junior treasury staff with 2-5 years of experience or new to treasury seniors.