For years, banks that managed cash for corporates in Europe plied their trade in an environment tinged with irony. The requirements for services were as straightforward as the handling of payments across a diverse and often-disconnected array of national settlement and banking systems was complex. Price determined competitive advantage, with profts growth contingent on a bank's ability to drive up volumes of the transactions it processed.
The arrival of the single European currency 18 months ago - coupled with advancing technology - has altered the cash management landscape in Europe almost beyond recognition. Still, the irony remains.
Thanks to the euro, cash management banks operate in a settlement environment that is growing simpler, seemingly by the day. Yet they are catering to a customer base that is looking for a complex and increasingly web-based array of services on a regional and even a global basis.
Competitive advantage is based on adding value to traditional service delivery and cut-rate unit pricing, while growing the business is predicated on selling services that integrate financial transactions with management of the supply chain. And the web-enabled sharing of financial information means that increasingly, banks are under threat both from discount service providers and from network operators that allow corporates to conduct transactions directly among themselves.