As SVP of Global Transaction Banking for Toronto-based Scotiabank (US$408 billion in assets), Bob Grant is responsible for corporate and commercial electronic products and services and e-commerce initiatives, including cash management products and services. But while creating a global cash management platform and enabling services such as electronic processing of multicurrency transactions are critical to Scotiabank's success in the global business banking arena, Grant believes that the bank's branch network remains an important part of the financial institution's value proposition.
BS&T: What technology challenges does Scotiabank face in the area of global transaction banking?
Grant: Multinational companies are increasingly centralizing their treasury departments. While they continue to operate in 10, 20 or 50 countries, they are moving their treasury functions to their head offices. Corporate treasurers want to sit in their head office in New York or Toronto and view and manipulate their cash position across multiple countries.
As a result, multinationals are doing business with fewer and fewer local banks, instead looking for a single global cash management and treasury services provider. Our greatest challenge is developing that type of global capability to provide payment and cash management services across multiple countries, multiple languages, multiple currencies and multiple foreign exchange rates.
BS&T: What strategies and initiatives has Scotiabank pursued in order to address these challenges?
Grant: Our corporate customers are demanding a single system with a single sign-on, single authentication and single authorization. They don't want to have to access a separate system for Mexico or a separate system for Canada. A single system makes corporate treasurers far more effective.
One of our first steps was to upgrade the cash management capabilities in our Mexican bank [Grupo Scotiabank] to English. Now corporate treasurers in Toronto or New York can manage their Mexican cash management business in English rather than in Spanish. Our customers will be able to view their account positions in Mexico, the U.S. and Canada in the currencies of those countries; transfer funds; and make payments to anywhere in the world. That's a competitive advantage.
BS&T: Describe Scotiabank's newly launched corporate and commercial U.S. services.
Grant: Scotia Capital, the bank's investment and lending arm, has been in the U.S. for more than a century. But what we haven't had in the U.S was the ability to provide customers with an operating deposit account or wholesale investment account. The operating account, which went live in October 2007, will allow Scotia Capital customers to deposit their excess deposit funds into a wholesale investment account that offers competitive rates or into an operating account from which they can make a multitude of payments.
BS&T: How far is the industry from achieving true integrated business banking solutions?
Grant: That's an interesting question because there are two parts to achieving a truly integrated business banking solution: a global payments platform married with an on-the-ground presence. While there are one or two large banks with integrated global cash management platforms today, clients still require an on-the-ground presence. They can move money electronically on a global basis, but they may still need to walk paper into a bank -- they still get paid by check and they still need to make paper remittances. They need local branches to do those things.
Scotiabank will be at the forefront of integrated business banking solutions because of our coast-to-coast network in Canada. We also have a national branch network in Mexico, we're the largest bank in the Caribbean, and we have a significant branch presence in places like Peru and Chile.
BS&T: Will the industry achieve this vision of true integrated business banking in the next five years?
Grant: We will have achieved it at Scotiabank. I believe we will have an integrated cash management solution for the North and South America regions. I also believe that we'll move in this direction in the Far East. The amount of trade between North America and China should increase significantly, and banks will need to figure out how to integrate an on-the-ground presence with a payments platform to service customers doing business in China. I see a huge effort being made to link the Far East and North America together.
BS&T: How is IT structured in your division?
Grant: As the head of global cash management product for the bank, I have an internal IT group of about 35 employees that reports into my product area. But I also use a centralized bank IT group to do some of our work.
BS&T: What skills do you look for in IT staff?
Grant: We're an innovative group trying to build a global cash management program, so I need people who are forward-thinking and up-to-date on the latest technology. But at the same time, we operate legacy systems, so I need staff who can do both. It's an interesting mix. And because we are building a global cash management system that will be deployed in Mexico, not only do I need innovative IT people, but I need them to be able to communicate in Spanish with IT people in Mexico.
BS&T: What organizations -- financial institutions or others -- do you view as your key competitors?
Grant: Our competitors are primarily other financial institutions, and they vary by location. When we compete for cash management business in Canada, we compete against the other Canadian banks, all of which are robust cash management providers. When we're in Mexico, we'll compete against other large Mexican banks.
BS&T: Are there any systems that you've developed internally that you consider outstanding?
Grant: One is our cash management system that provides Mexican cash management in English. No one else is doing that, and it makes us competitive. Our Canadian cash management service also is well-rated.
While we do a tremendous amount of in-house development, both in Canada and in our foreign subsidiaries, we are not solely an in-house shop. We do look for partnerships and alliances where we think that [arrangement] is more efficient.