Trésorier/Treasurer magazine - N°98 - July/Aug/Sep 2017 - 9

INTERVIEW

-Banks always complain about the
Tsunami of regulations impacting their
business. How do you see the (direct or
indirect) impacts for Treasurers? Basel
3 (and 4 announced), MiFID2, PSD2 etc...
Challenges for you and for us but do you
see also some opportunities?
The increased level of regulatory scrutiny will undoubtedly lead to challenges
for banks and treasurers as liquidity
is recognized differently and banks
become more focused on aligning cash
placement with operating business.
The resulting higher costs and lower
availability of credit may create pressures for Treasury. There is, however,
opportunity for treasurers to re-model
their operations and scale this for
better efficiency and control. Building a
stronger and more resilient framework

-Digitization will have and already had a
significant influence on payment methods
and habits. Do you see any role for banks
and J.P. Morgan in particular? How do you
prepare the new entrants threat, like the
Fintech's and "block-chainers"? Is there
a risk of banks (or some) become huge
back-offices?
The changing payments landscape and
emergence of new payments methods
are an opportunity for the industry
as opposed to a threat. Customers
expectation of faster payments is one
example of a driver that is transforming
the payment space and digitization is
key to this. Fintech and blockchain are
likely to help drive change for the better
but it will be a joint industry effort. The
banks will remain a fundamental part
of the system and it is more likely that

-There are undoubtedly many processes
already digitized. How should we as
Treasurers respond to the increased flow
of data, of "big data"?
Treasurers have a great opportunity to
work with the business in using data to
improve the customer experience. As
e-commerce increases, the quality of payment data will improve and
Treasurers can use this data to derive
actionable insights on customers and
ultimately help sales and marketing
functions deliver more relevant propositions. Marrying payments information
with other data, such as loyalty data,
Treasurers can help the business better
understand customers and improve
their experience. Understanding this
information will also allow:
* Real-time "decisioning", requiring
faster processing and views of transactions as well as greater control
over payment initiation
* Managing a tighter intraday cash
cycle, where improved accuracy of
balances, real time reconciliation,
aggregated cash and liquidity information is delivered on an hourly basis
if not more frequently

/ AUG / SEP 2017

- JULY

Treasurers should be looking to align
their payable and receivable activity
with their liquidity at their core banks.
There will be increasing focus from
treasurers to concentrate operating
cash with fewer providers as banks
increasingly focus on operating cash.
Treasurers can benefit by taking more
of a partnership approach to their banking relationships. Treasurers can look
for opportunities to minimize holding
cash in negative yielding currencies
by re-deploying it to the business or to
higher yielding investments whilst, at
the same time, minimizing FX exposure.
Reform in MMF will further reinforce
the need for treasurers to review and
re-work their investment policies.

We have a global Blockchain Centre of
Excellence and recently a released
Quorum, our open source blockchain
code that will help developers design
new ways of transmitting money. We
also continue to explore the use of
Blockchain technology and have a number of partnerships in this space.
As the number one merchant acquirer
of eCommerce transactions in Europe
and worldwide, according to the 2016
Nilson Reports, J.P. Morgan is a leading
provider of payment, fraud management and data security solutions. J.P.
Morgan's processing platforms provide
integrated solutions for all major credit
and debit card payments as well as
mobile payments and processed more
than $1 trillion in payment transaction
volume worldwide in 2016.

N°98

We have a very consistent international strategy and commitment
to the EMEA region with selective
expansion to take us to where our
clients need us. In 2016 we expanded
our EMEA footprint with cash
management capabilities from our
Luxembourg subsidiary and became
the only U.S. bank to offer direct
payments clearing in Saudi Arabia.

-For example, how should we adapt our
strategies, in investments (policies) in
order to cope with new regulations on
MMF's and negative or low interest rates?

we will continue to see collaboration
between banks and fintech companies.

-

J.P. Morgan has been focused on understanding the impacts of Basel 3 from
an early stage, and preparing our clients
for it. More broadly, we have always
placed a huge emphasis on having the
flexibility to help clients capitalize on
market changes:
In 2016, J.P. Morgan's firmwide technology spend was more than $9.5bn,
of which approximately $3 billion
is dedicated toward new initiatives
and we continue to invest in our
payments business with a multi-year
commitment to re-engineering our
Global Payments Platform, our focus
on the cyber agenda and investments in Fintech.

will lead to a more holistic approach
and tighter linkage between clients
and banks, in particular in relation to
working capital and liquidity. Regulation such as PSD2 will additionally drive
more choice for clients, for example,
open APIs will facilitate innovation and
better user experience e.g. allowing
for interoperability across our banking
partners with quicker onboarding.

LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE

- Do you think J.P. Morgan is ahead of
competition in terms of products and
service offering for corporate customers
in the new economic environment?

9
Trésorier/Treasurer magazine - N°98 - July/Aug/Sep 2017

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