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Working Capital Management: Converging Trade Finance and Cash Management to Make it Work

Working Capital Management: Converging Trade Finance and Cash Management to Make it Work

By 2011, Aite Group forecasts a range of 25% to 60% (up from 2% to 10% in 2006) of global banks integrating consequential client-facing capabilities in trade finance and cash management. Client-focused bundling of trade finance and cash management service

Boston, MA, July 17, 2006 – In a new report, Working Capital Management: Converging Trade Finance and Cash Management to Make it Work, Aite Group analyzes the market drivers and the current status of the consolidation of bank products and services that support working capital management. The report highlights the stages of convergence based on developing trends; the opportunities, challenges and target markets in terms of companies and banks; and the scenarios for bank integration of these business lines.

In today's environment, capital markets reward companies that effectively manage their working capital through increased stock values. The report argues that if banks are to play an integral part in their clients' processes, they need to change their focus from providing distinct products to offering solution sets that create value across broad, functional roles within a company. Yet, banks are facing challenges that range from interfacing disparate systems to offering internal reward incentives that encourage teaming across business lines.

"The new client-focused approach will take some time to evolve," notes Nancy Atkinson, a senior analyst with Aite Group and author of the report. "Over the next five years, smart banks will create the necessary linkages to make convergence a reality in terms of providing the relevant data to clients in nearly real-time and in a format that is meaningful for the corporate user, regardless of the bank's infrastructure. By creating these links, banks will experience greater customer retention and more up-sells and cross-sells leading to increased revenues and profit margins.

"This is a 27-page Impact Report. Clients of Aite Group's Wholesale Banking service can download the report.