Reducing the cost of capital will always be a core KPI for corporate treasurers, with a future-proofed cash and liquidity management strategy increasingly seen as a key component for this.

Here at Santander CIB, we have seen approaches take different forms in developed and emerging markets, driven by the complexity of the country and currency in question. 
 

Below is a toolkit to assist in making sure liquidity rationalisation remains firmly on your radar throughout the year for maximum cost:benefit. In both cases, internally communicating the financial cost improvements is essential for success and stakeholder buy in.

Step 1: The brilliant basics with convertible currencies

With EUR, GBP, USD and other deliverable currencies, the first step is to look at what is where, and how long you have been taking this approach. For example, when was the last time that buffer balances in cash pools were mapped to understand if liquidity can be stripped out and redeployed elsewhere? Daylight and overnight overdrafts are a useful tool to reassure business units and other stakeholders that straight-through-processing will take place despite a more robust approach to balance management. 
 

Next is taking balance and transaction reporting data to understand what is not pooled, as well as where there is non-functional currency exposure at the subsidiary level.

For un-pooled balances, assuming that there is already good ongoing communication with tax colleagues, it is a quick win to demonstrate to subsidiary finance managers the upside of connecting to the group structure. For those entities which have flown under the radar because of changes in strategy or legal structure, partner with your Corporate Secretarial partners to agree on a closure plan which can extract idle cash. 
 

We also suggest taking a strong approach to non-functional currencies. These are often relatively small balances where the received wisdom has been that there is not the cost:benefit to centralise liquidity. Aside from the opportunity cost of cash of these positions, they trigger a lot of accounting work without the business need being well understood. Here, it is important to demonstrate the business case for automated cross-currency payments and collections as an efficiency tool. This will reassure business units that there will be an overall cost saving, without any impact to customer or supplier relations. 
 

By tracking and communicating the cash released through this process, you can not only better service your debt and reduce opportunity costs, but also secure buy-in from management for future treasury technology investment which will strengthen the business case further.
 

Partnering with our clients during this creative thinking is one of Santander Corporate & Investment Banking’s strengths. By extracting historic payment data, we have assisted clients in easily demonstrating where there is a business case to migrate payments or receipts in non-core currencies to our global suite of cross currency solutions to reduce cost and complexity in their overseas operations.
 

In turn, this has enabled our customers to automate management of core currencies, including those where Santander is a market leader such as EUR, GBP, USD, MXN and PLN.

Step 2: The deep dive into more complex currencies

One of the most challenging actions after the steps outlined above is to map the remaining lazy cash, including instances where it is legally possible but administratively difficult due to distribute reserves, for example.
 

It is important to look at the mix of cost and profit centres in emerging markets, such as Latin America, and understand the nature of flows into and out of these countries - where delivery is being undertaken for intercompany flows, for instance.

Automated cross-currency transactions should be engineered into your processes, where possible, from a regulatory perspective, and awareness of where flows cannot be fully automated, due to formatting or documentation requirements, communicated to ensure a common understanding. This will result in ease of cash movement, reassuring colleagues that funding is there, should it be required, and facilitating dialogue on how much cash is needed in-country. 

Depending on the country in question and its business model, this may see changes to dividend and equity injection processes, or the adoption of offshore collections hubs (e.g. USD receipts paid into a non-resident account at your HQ location). Such changes necessitate working closely with in-house counsel and experienced banking partners to understand regulatory requirements, as well as what is practically feasible.

The business case will quickly become clear, however, that balances in ARS, BRL, CLP, COP, PEN, UYU and others are an often-forgotten source of cash which can be deployed more effectively at HQ level.

With Santander CIB’s unparalleled reachability in Latin America, we offer our clients dedicated contacts and outstanding local knowledge. This ensures that regulatory requirements do not delay access to cash by subsidiaries or HQ, reducing the opportunity cost of cash and increasing control.

Step 3: Futureproofing and treasury transformation

Greater control and access to funds is not a benefit to treasury alone. For each success in the journey above, highlighting to your business units that with every penny centralised or released, they have directly contributed to a reduction in leverage or the cost of capital. 

Demonstrating the wins ensures that treasury’s mandate for continued improvement is stronger than ever before. Santander’s suite of new solutions, ranging from cross-currency sweeps to automated reconciliation mechanisms, are the ideal tools to continue your evolution and see structures which are future-proofed.

Iria Fernandez (Global Head of Cash Management, Santander CIB), says: “In this journey, Santander is your ideal partner. As a leading pan-European and pan-American cash management, liquidity and FX house, our expertise is second to none and at your complete disposal.”
 

The emergence of instant payments has been a gamechanger, with its 24/7/365 nature revolutionizing the payment & treasury ecosystem. Banks have adapted to rising consumer expectations and inherent regulatory changes, both in terms of standardization and swift processing, all while compliant with regulatory affair controls.    

Retail consumers in Europe and other regions were the first to drive these changes by adopting digital and secure real-time solutions as an alternative for cash and as another standard requirement for accessing commercial and financial markets. Card payments or instant Account-to-Account (A2A) payment schemes like BIZUM in Spain or BLIK in Poland provide users with an immediate update and confirmation in contrast to the traditional batch processing of payments during or at the end of each business day. The deployment of alternative, instant payment solutions has been evolving ever since entering also the B2B space. 

The SEPA Instant Credit Transfer (SEPA Instant) regulation in Europe was first launched back in 2017, but its obligatory implementation for banks across the 27 EU member states starts on January 9, 2025, for reception, followed by October 9, 2025 for the issuance of instant euro payments. For other Payment and Electronic Money Entities the adoption deadline expires on April 9, 2027.   

This is part of a wider effort to bring the euro payment landscape up to speed, given that nowadays, the share of instant payments in Europe is still low compared with other global regions where India and Brazil dominate the real-time payments market by volume. The forecast for Europe is that instant payments will account for 13% of all electronic payments in 2028 up from 8% in 2023.  
 

How can multinational corporates benefit from the SEPA Instant implementation? 

The operational and strategical long-term advantages of instant payments are substantial for corporate clients across the SEPA countries:

Enhancement of liquidity management and cash flows 

• Faster collections and the immediate availability of funds will enable faster treasury operations and reduce liquidity constraints by optimizing cash forecasting and management. 
• Improved cash conversion cycles of receivables and payables, leading to quicker access to working capital.

Operational efficiency

• Secure and verified 24/7 payment processing outside of traditional banking hours and across time zones.
• A faster reconciliation of traceable processes, reducing operational queries.

Operational costs

• Real-time access to funds reduces reliance on costly short-term financing solutions, reducing interest expenses.
• Charges applied on instant payments cannot exceed those applicable for regular SCTs.

Competitive advantage 

• Strengthens the relationship and enhances the trust and experience with customers and suppliers through a more rapid settlement of refunds or payments.

Where does Santander CIB come in?

At Santander CIB, we are driving innovation by bringing forward a wider range of payment methods and schemes to our multinational corporate clients, to allow for a more efficient allocation of resources and better cash management practices. 

We support the application and timeline of the SEPA Inst scheme in the Eurozone, which enables the instant transfer of euro payments from one payer account to that of a payee within 10 seconds, at any time, on any day (24/7/365). 

The scheme applies to payers issuing payments in euros from any currency account, between accounts inside the SEPA Eurozone. The current limit for retail instant payments is €100,000 but banks can eventually raise this for corporate users to make the scheme even more attractive.

MONICA ROMAN, Head of Payment Solutions at Santander GTB Europe: "We have faced an ambitious project to connect all our European Units and their payment channels to SEPA Instant. It will be the foundation stone for forthcoming value-added products for our customers. We are proud of our support for multinationals in these important areas, advising them on how to best create the standards for instant payments within their respective operational framework, sectors, and markets."

LAUREANO RUBIN DE CELIS RODRÍGUEZ, Head of Cash Management Sales at Santander GTB in Spain: "Santander in Spain was the first group unit to activate SEPA Instant payments after the official launch of the scheme. In recent years, our multinational corporate clients have found a way to unlock their value by optimizing their cash flow through the immediate availability of incoming funds."
 

Author: Ute Stammeyer, Head of Cash Management Advisory Europe at Santander Group.
 

For further questions, please contact the Cash Management Advisory Team in Europe (cashadvisory@gruposantander.com)
 

We are looking to hire talent to be the future leaders of Santander Corporate & Investment Banking (Santander CIB) through our Graduate Programme.

Our international graduate programme offers you a unique experience in a global investment bank. You will join a diverse and dynamic team, that will provide learning and development opportunities to grow both professionally and personally.

In your first year with us, you will gain an all-round understanding of the investment banking business through immersive training, participating in an array of exciting projects and initiatives.

We are looking for the best talent to support our growth ambition. Recent graduates or final-year students who are highly motivated to bring out-of-the-box perspectives. A strong educational background in Engineering, Mathematics, Statistics, Finance, Business Administration or Economics is needed.

Why Santander CIB? We are part of one of the world’s leading financial services groups. With the business transformation that we started a couple years ago we have grown and diversified our franchise, and we have tightened our partnership with our clients becoming a key industry player, committed to delivering best-in-class solutions, including those required to accelerate the path to more sustainable business models.

Joining Santander CIB means becoming part of a world-class team that supports the growth strategy of major companies and institutions by providing innovative and tailor-made solutions. A unique opportunity to join an international network of experts that will help you take your career to the next level.

Applications are now open. If you are looking for a career in banking to make a difference, we would like to hear from you.

Click here to apply

Alternative investors are key contributors in bridging financing gaps and transforming industry dynamics. The team at Santander CIB highlights the role of digitisation in attracting new entrants to the trade finance market.

Digitisation in trade finance is a hot topic for an industry that has for centuries relied on paper and whose multiparty and cross-border nature poses significant obstacles to streamlining and automating its processes.

Despite being a challenging ambition, the benefits for corporates and banks of investing in new technology are enormous: it significantly reduces time, costs and operational errors, thus increasing efficiency and maximising volumes, which ultimately makes participation in international trade and access to competitive financing more inclusive.

Because of its plethora of advantages, the digital transformation of trade is speeding up. Those players who are not able to keep up with the latest technological advances risk losing competitiveness and being sentenced to disappear in the long term. Santander Corporate and Investment Banking (Santander CIB) is committed to pioneering this new environment and anticipating the needs arising from the digitisation journey its clients have embarked on.

“As a global bank, we have the right infrastructure, capital and risk management capabilities to position ourselves at the centre of the ecosystem and act as anchors for our corporate clients to connect them to all of the different players in the trade finance arena and provide them with the best value proposition,” says Enrique Rico, global head of trade and working capital solutions at Santander CIB.

This collaborative approach has led the team to become investors in trade finance platform Komgo, partner with fintech Two and insurer Allianz Trade to support clients in increasing their digital B2B sales, and ally with software provider SAP to embed their receivables and supply chain finance solutions into corporates’ ERPs.

Unlocking the power of digitisation

But digitisation not only boosts collaboration among the financial and technological industries. It also enables banks to form intra-industry partnerships that offer larger and more comprehensive trade finance solutions, meeting all client needs and simplifying their lives.

The latest technological developments have propelled the standardisation and automation of processes and templates, significantly enhancing banks’ syndication and distribution capabilities. This transformation has unlocked the potential of trade finance assets, which have been traditionally very difficult to distribute.

“The originate-to-distribute model most big banks follow is vital for financial institutions to comply with capital requirements, manage credit risk and ensure liquidity,” says Rico. “But being able to structure a multi-bank solution is also key for our clients, especially when we are talking about large multinationals in need of centralising the trade finance and working capital requirements of their different subsidiaries,” he adds.

Multi-funder programmes are inevitable when attempting to achieve the scalability and broad geographical scope that most big corporates demand. Diversifying the pool of funding sources also contributes to underpinning a programme’s resilience and flexibility to meet peak utilisation.

“We have recently closed a multi-billion supply chain finance facility with a major energy player including several buying entities located in three different continents,” explains Ángel Bustos, global head of supply chain finance at Santander CIB. “Without a multibank approach, no institution would have had such a massive appetite for a single group and the company would have been forced to manage several facilities, each with its own platform, legal documentation and operational processes.”

Santander CIB’s multi-funder supply chain finance platform

With its multi-bank white-label digital platform, Santander CIB offers its clients the possibility of structuring global facilities with a single point of entry and seamless process. Both buyers and suppliers deal exclusively with Santander CIB as fronting bank, while the other funders benefit from a digitised process under which invoices are automatically assigned, sold and finally paid to each participant according to their quota.

To achieve this, the bank has consistently invested an average of US$20mn annually over the past years in cutting-edge technology to fully digitise its supply chain finance platform, simplify the supplier onboarding and payment processes, and open it up to other banks and investors.

“Alongside other major connectivity achievements, like the integration of our solution into the clients’ ERP, the multibank funding structure we have implemented has been an inflexion point in our offering,” says Bustos. “Thanks to a flexible and automated distribution model, we have expanded the possibilities of participation alternatives for investors in terms of countries coverage, currencies, appetite, and funded or unfunded options.”

Even the buyer can invest its own excess liquidity in its programme via a dynamic discounting module that allows it to buy back discounted invoices before the maturity date.

The bank estimates that two in three supply chain finance programmes will include a multi-funder approach by 2025. This is a major win for trade finance assets, which have been traditionally very difficult to distribute, mainly because of the lack of automation and harmonisation.

New investors expand trade finance horizons

Despite their anticyclical behaviour and low-risk profile – attributable to their commercial basis and short-term nature – trade finance assets have significantly less access to capital markets compared to other financial assets, such as mortgages or bonds.

This trend, however, has been shifting lately, with many private equity funds and asset managers showing interest in the multi-trillion-dollar, self-liquidating asset class of trade finance. As an example, Santander Alternative Investments recently created two funds to allow investors access trade finance assets and its “low default rates and high recovery rates”.

“The entry of private investors into the trade finance space is excellent news for traditional banks, since the current scale of the trade finance distribution universe is not enough to meet the increasingly tighter capital requirements and faces liquidity constraints,” explains Rico.

“Non-bank investors are helping banks alleviate these limitations, but more importantly they are opening new roads of origination and will bring alternative sources for growth.”

Indeed, emerging trade finance investors are poised to inject fresh capital into the current trade finance landscape, reigniting an appetite for developing countries, sub-investment grade companies, and SMEs – markets traditionally challenged in accessing financing. As they expand the scope of origination for banks, alternative investors play a crucial role in bridging the US$2tn trade finance gap.

However, for the distribution process to function effectively, participants cannot rely on manual intervention.

With increasing volumes and a growing number of investors, having robust technological infrastructure becomes essential. Only banks committed to digitisation will be positioned to lead this transformation and assume a central role in the evolving trade finance ecosystem.

At Santander CIB, we have warmly embraced this call to action.

World economy is going through challenging times. Recessions in the past have shown that small and medium-sized enterprises (SMEs) can be highly dependent on bank financing, and thus more sensitive to interest rates, compared to larger firms, who have a broader access to capital markets and higher access to credit.

According to insurer Allianz Trade, the macroeconomic turmoil is widening the trade finance gap, which is estimated to worth over $2 trillion for world’s SMEs and could lead to a 21% rise in SME insolvencies in 2023. In the current context, as SMEs anticipate the risk of facing future financing constraints, they will react by holding higher cash reserves and increasing their focus on managing their cashflows. This macroeconomic environment has led to an increased interest in B2B Buy Now Pay Later solutions, already gaining popularity as B2B e-commerce boomed.

These solutions allow for corporates to provide payment terms to SMEs (making them a more attractive seller and increasing sales) whilst mitigating the increased risk (receivables can be immediately purchased by the bank absorbing the corporates’ exposure to its buyers insolvency). BNPL represents a mutually beneficial solution to both seller and buyers.

Sellers using BNPL can benefit from;

• Higher revenues; increased basket size, buyer loyalty and stickiness
• Credit Risk transferred 
• Streamlined order-to-cash process with upfront financing 
• Focus on business growth, while outsourcing time consuming processes such as collection and reconciliation processes 
• Cost often more competitive than credit card charges 
• while benefits to the buyers include; 
• Access to embedded financing (trough extended payment terms with higher acceptance rate)
• Flexible liquidity; faster short-term financing for B2B customers and often at lower cost than traditional financing 
• Enhanced purchase experience with seamless, fully digital check-out experience 

With 360 million users worldwide, BNPL has become one of the fastest growing payment methods over the past two years – the BNPL market value has nearly doubled between 2020 and 2022 and the global B2B e-commerce market is forecast to grow at 17% until 2030. B2B sellers are now more likely to offer e-commerce channels than in-person selling.

According to B2B BNPL platform provider ‘Two’, e-commerce businesses who have implemented the solution have seen conversion rates go up by +20% and  average order values increase by 60-75%.

BNPL integrates into an e-commerce platform, providing an alternative to Credit Card payments. For clients, it is a seamless payment method with a number of benefits over the alternatives. In essence, B2B provides a safe, simplified, and flexible way for merchants to offer trade credit online.

The typical BNPL flow can be summarized in the following steps:

• At checkout, the buyer chooses between different payment methods, such as BNPL or an immediate card payment
• If the buyer chooses BNPL, there is an instantaneous credit check performed 
• If approved, the buyer is granted 30/60/90 days payment terms 
• Simultaneously, the bank purchases the receivable created and makes payment to the seller
• After the agreed time period, the buyer pays back the BNPL provider through e.g., automatic payment, bank transfer or card payment.

Santander CIB is working hard to always remain at the cutting edge of B2B payment solutions and has recently signed a partnership with Allianz Trade and Two to deliver powerful innovations in the market. Allianz Trade is combining its experience in trade credit insurance with fintech Two’s B2B BNPL technology to provide businesses with real-time data, automated trade credit decisions creating a seamless B2Be-commerce experience.

If you want to know more about our Trade & Working Capital solutions, click here.

Corporate treasurers, and financial institutions, are facing market pressures due to the huge advancements in technology over the last 50 years, such as regulatory changes.

There is a ‘battle in the playground’ where infrastructure, geopolitical considerations and alternative payment rails have driven fragmentation. 

Global corporates are looking for local reachability together with global platforms, and technology modernisation is increasing clients’ requirements for embedded solutions. 

We must all learn to adapt or be left behind in this continuously evolving environment, and offer value beyond payments.

Digitalisation is altering the way we pay

Money has been part of our history for thousands of years in some form or another. 

The payments sector has undergone significant evolution, moving through distinct eras - from paper to currently transitioning from the account era to payments becoming increasingly disconnected via APMs (alternative payment methods). Market forces are shaping the new era in payments by demanding accessibility, affordability, and most importantly security.

Clients are looking at combining traditional and APMs to boost sale conversions by simplifying and streamlining processes, as well as increasing cost efficiency. 

APMs break down geographical barriers, enabling businesses to reach consumers around the world without the limitations imposed by traditional payment systems. This can also enhance cross-border transactions, allowing businesses to expand their customer base and international markets.

They can also drive fragmentation in the market with a lack of payer participation and the high cost of integration.

A company’s aim is to improve collection management, shorten DSO (days sales outstanding), reduce fragmented payment collection channels, and to improve automation in both payable and receivables, in order to reduce delays and the need for any manual intervention. 

‘Open Banking’ increases competition and innovation in the financial sector by allowing for greater transparency and collaboration in the payments space. However, in the  data sharing remit, the greater benefit resides in the combination of data from different sectors, not only financial sector. And we expect regulators to make efforts in this direction; it is at the core of the EU Data Strategy released by European Commission back in 2020.

The popularity of digital wallets is increasing at a fast pace, and they are becoming one of the leading payment methods globally. These can be electronic devices, an online service, or a software programme allowing electronic transactions with another user.

Digital wallets allow users to access products through devices to make purchases. Digital wallets generally see strong encryption which provides enhanced security. 

Business-to-business-to-consumer (B2B2C) is a model that combines business-to-business and business-to-consumer for a complete service transaction. The methodology for B2B and B2C companies was to stay ‘in their lane’, but digital evolution is altering everything. The payments ecosystem continues to mature and augment. 
 
The market is seeing a collaboration in processes that creates mutually beneficial services and product delivery channels. The main two payment types being ‘credit card rails’ (Mastercard/Visa) and ‘A2A’ (Account-to-Account). 

Key areas that haven’t changed are the importance of seamless payments, and the need to manage payments correctly to keep cashflow healthy. 

Santander transformation considerations  

We are in the Instant Payment Revolution where payments are moving away from the traditional methods towards API connectivity, giving superior transparency.

Santander acknowledges the digitalisation disruption and the import role banks play in enhancing capabilities while maintaining reliability.

PagoNxt is a one-of-a-kind pay-tech business providing customers with an innovative one-stop shop for payments and integrated solutions. It combines the innovative technology of a Fintech while drawing on the strengths, reach and expertise of a global, leading financial institution.

Banks must constantly innovate in the changing payment landscape. Santander appreciates the importance of uniformity and homogenising global standards. The environment is not static, and our goal is to support and deliver solutions that are secure and flexible without driving further fragmentation. 

Santander draws on 160 years of banking history as we transition into the next payment era. You can learn more about our bespoke, value-added solutions in this space here. 
 
Ana Santos, Global Head B2B2C, Santander CIB: “The digital revolution has placed payments at the core of the customer journey. Clients demand an instant, secure, valuable and integrated experience. Santander is uniquely positioned to contribute in the B2B2C space to deliver scalable solutions by combining the bank’s working capital capabilities, the flexibility of its payment fintech and the strength of its Consumer Bank.”

Industrialisation and subsequent rising prosperity throughout the 20th century have been intrinsically linked with fossil fuel usage. However, breakthroughs in the realm of robotics, data transition networks & storage, and economies decarbonization, will likely move the focus to achieve growth targets and to stick to environmental commitments. 

Limited supply and geographical concentration of certain resources creates an ecosystem in which certain countries or regions become key players in the global supply chains for specific products or sectors. 

This hasn’t gone unnoticed by governments, either. Over the last few years, the importance placed on certain key raw materials has skyrocketed. Europe, for instance, has been working on developing comprehensive metal sourcing strategies; the Critical Raw Materials Act of the European Commission is a good example of attempts to enhance supply chain resilience and decrease dependence on the raw material industry as a whole. 

Strategic and critical raw materials

Raw materials are fundamental in the successful fulfilment of key governmental initiatives, with the European Union a prime example. 

The failure to achieve a resilient supply of such resources has the potential to create a cascade effect, in turn negatively impacting a myriad projects and objectives on the agenda. 

Such initiatives are spread across a huge range of sectors, bringing into focus the value and scarcity of precious resources. 

Below you can find a more detailed overview of raw materials’ importance across 15 key technologies. Selections have been based on:

• Further expansion for energy and digital transformation 
• Likely growth of emerging technologies
• Relevance to EU security

European Critical Raw Materials Act 

Considering the aforementioned importance of so many raw materials, one must examine how legislation aims to maintain resiliency and diversification, particularly with reserves of so many spread far across the planet. 

A good case study for this is the European Critical Raw Materials Act, which was provisionally agreed in November 2023, aiming to increase and diversify raw materials supply, strengthen circularity and support research and innovation on resource efficiency.

Within the Act comes a number of benchmarks, in order to establish rules for the environmental footprint of critical raw materials, as well as their sourcing, along the value chain and for diversification of EU supplies by 2030:

• At least 10% of the EU’s annual consumption for extraction 
• At least 40% of the EU’s annual consumption for processing 
• At least 25% of the EU’s annual consumption for recycling
• No more than 65% of the EU’s annual consumption from a single third country 

Global policymaking and the role of climate projects on raw material supply 

With the deployment of renewable energy technologies comes the expectant result of strong demand pull for several key resources. This demand could be hard to meet with the available primary and secondary supply – the latter being derived from recycling resources. 

See how supplies are shaping up over the next couple of decades across two distinct policy outlooks, as per KU Leuven:

1. Stated Policies Scenario (STEPS)
2. Sustainable Development Scenario (SDS)

This expected scarcity of supply could lead to increased commodity prices. 

Actions to reduce metal demand could also be deployed, such as technological innovation and substitution to reduce and optimise metal intensities in existing clean energy technologies, among others.

Corporate treasurers have an important and unique leadership role to play in building cyber resilience as the centre of expertise for risk management and balance sheet strength, as well as being the custodian of sensitive data related to payments.

Looking at the preparation and incident response trends of recent years, what can the treasurer do differently?

Managing up

The first thing that a treasurer can do is lobby to ensure that cyber security is part of the Audit and Risk Committee’s agenda as much as liquidity, credit or market risk. As it is impossible to totally prevent a security incident, cyber security cannot be a “one and done” and is instead better maintained as a standing item.

Embedding such ongoing strategic governance will not just set the tone that cyber resilience matters but also ensures a common understanding of what this refers to: cyber security is the way in which we reduce the risk of a cyber-attack and ensure that our organisation is protected.

Secondly, one must understand where and how cyber risk has been managed to date. A word of warning, this could well uncover a patchwork. For example, there could be mixtures of individual business units managing this for each of their operations, the General Counsel’s office as part of the adoption of GDPR, and the organisation’s Chief Information Security Officer (CISO) from a systems lens. 

Only by understanding this landscape of responsibility and accountability can the treasurer embed resilience.

Managing from within

The treasury and wider finance division need to have sufficient understanding to constructively engage on cyber resilience and response.

This can be achieved through a team whiteboarding session. Opening the floor to facilitate a self-assessment of processes owned by, as well as those adjacent to, the treasury team will quickly, easily and cheaply uncover the current state of understanding and preparedness.

The cyber security pillars of Defend, Anticipate and Engage can be applied as a framework to facilitate this: 

Defend

It is important to proactively manage the treasury technology stack in addition to the processes in place from IT and the CISO’s office, such as email filtering. For example, are all systems or platforms owned by treasury patched, up to date and coming with a systematic approach to on/offboarding employees? If so, when did we last test this, or verify that principle of least privilege is in place?

Anticipate

The key to being prepared for a cyber incident is mastering the basics and aligning with existing treasury operational risk processes. Steps such as ensuring that your response plan is backed up in a logically or geographically separate way (a backup in the same location will almost certainly be targeted in an attack) - including the specific requirements of treasury is the best way to enhance resilience.

At a minimum, this should include internal (e.g. CISO and shared services partners) and external (cash management banks and lenders) contact details, as well as the criteria for triaging payments and reconciliation of the most important transactions in a contingency scenario.

Engage

People are and always will be the best form of cyber defence. While there are likely to be organisation-wide training programmes on identifying suspected phishing emails, for example, these will not reflect the nuance that each team culture will differ.

It is important to test if the treasury department has an environment which allocates blame or extracts learning. For example, if someone uncovered a way to circumvent a maker/checker functionality, would they feel comfortable to flag this to their manager?

Managing across

To adequately defend, anticipate and engage on an enterprise-wide basis, all parts of the organisation must act in unison. The steps above will help treasurers understand where the key partnerships will be.

This may see discussions with procurement if contracts do not include supplier resilience vetting, historic HR practices concerning revised payroll processes or cross-functional learning dialogue following a near-miss. 

This leadership is a critical tool in demonstrating corporate treasury’s continued strategic value to the organisation, and central role to enterprise risk management.

Santander Corporate & Investment Banking enhances the security of both our clients and society in the online world. As a financial institution, we are actively working on adopting the Digital Operational Resilience Act (DORA) and the revised Network and Information Systems Directive (NIS2) to build on our existing layers of security:

• Protect: This includes tools with the primary function of preventing cyber-attacks (firewalls, antivirus, email filters, physical, hardware and software access control);
• Detect: 24/7/365 monitoring to identify anomalous or malicious activity, including machine learning;
• Respond: The investigation stage which could include deactivating systems or forensic investigation to prevent further infection, risk or recurrence.

In terms of enhancing resilience for our clients, as a pan-European and American leader in Cash Management, a vital component is providing a single access point for transaction processing via Santander Cash Nexus. This is an important source of operational risk reduction, by reducing the number of potential points of weakness.

We also challenge ourselves to find new ways to drive connectivity with our clients’ technology.