JPMorgan has long been committed to diversity in its workforce and its approach is yielding results. Joy Macknight talks to the women heading the US bank’s Europe, the Middle East and Africa treasury services business lines to gain insight into the drivers of change in the region. 

JPM Treasury Services Team

From left: Alison Livesey, Katia Karpova, Lori Schwartz, Sara Castelhano, Sue Dean

Regulation and cross-border trade/trade terms were the top two macro concerns for companies attending JPMorgan’s Cash Management Forum in London in November 2017. On the treasury side, centralising cash management, geopolitical changes and ensuring the right talent in treasury were identified as the top three issues keeping them awake at night.

Almost half of the 50 global blue-chip companies chose 'under development' when asked how well formed their company and treasury strategy is for the future of Europe, indicative of the uncertainty surrounding Brexit and other political issues.

The survey results illustrate the numerous issues facing corporate treasurers in Europe, the Middle East and Africa (EMEA), in addition to fast-paced technological change and a diverging interest rate environment.

Sparking change

“The many moving parts makes it incredibly complex for anyone considering a treasury structure,” says Sue Dean, head of JPMorgan’s EMEA treasury services business. “However, these challenges are coalescing into a great opportunity, providing treasurers with a catalyst for positive change.” She adds that banking partners, which have the tools, capabilities and advisory capacity, have a critical role to play in helping clients attain their strategic goals.

JPMorgan’s approach is to insulate its clients from as much change as possible. “We try to minimise the work they have to do and do the heavy lifting for them, which triggers much discussion around how we approach our own capabilities, products and services in terms of the ease of doing business,” says Ms Dean.

Thinking about how JPMorgan is supporting its clients in the changing European landscape is top of mind for Alison Livesey, head of EMEA legal entity strategy for treasury services. She is focused on three areas: the political situation, including and beyond Brexit; treasury centres; and broad regulatory change.

As such, the bank is building out its competence in multiple jurisdictions in Europe. It already has a broad presence across the EU but is now focusing on uplifting and rounding out its capabilities. By March 2019 it will have broadly full product capability across three additional locations outside of London: Dublin, Frankfurt and Luxembourg.

By offering clients more options and greater flexibility, JPMorgan is illustrating its commitment to the region. “We are making significant investments, which is resonating well with our clients,” says Ms Livesey. “Corporates are focused on how they can best defend their business against the unknowns and are asking for our support in helping them grow, with new products and technology platforms.”

Changing payments landscape

Payments is an area of treasury services undergoing great change, driven by the move to instant payment schemes across the world, such as real-time payments in the US and Single Euro Payments Area (SEPA) instant credit transfer in Europe, which both went live in November 2017.

In addition to the regulatory push, changes in corporate business models are driving the demand for real-time payments. Traditional corporates are moving their brick-and-mortar businesses online and need to support their customer base, which is looking for instant payments.

We don’t lock [clients] into a structure that means that they can’t flex quickly. We are bringing as open an architecture as possible in our product capabilities

Sue Dean

The changing labour market also needs these capabilities. “With the rise of the gig economy, large corporations are paying individuals instantly for their services, rather than the traditional monthly salary runs,” says Sara Castelhano, JPMorgan’s EMEA core cash product head, whose responsibilities include setting and executing the strategy for payables and receivables solutions.

“We are moving to a 24/7 environment in transaction banking and banks need to support their customers with real-time payments and reporting,” she adds. “Normally, corporates send out their payments in the morning and wait for a report later in the day. Now it is about having real-time information so that they can make more proactive, rather than reactive, decisions.

“It is critical for JPMorgan to be able to leverage new technologies to make the payments more efficient and maintain security. We are trying to make everything faster, cheaper, safer.”

Blockchain moves

In October, JPMorgan, together with global partners Royal Bank of Canada and ANZ, launched a new payments network, Interbank Information Network (IIN), which uses blockchain, or distributed ledger technology, to minimise friction in the global payments process. IIN is powered by Quorum, a permissioned variant of the Ethereum blockchain developed by JPMorgan.

Ms Castelhano says the new network is part of a global payment strategy that will leverage new technologies in a state-of-the-art platform, which is nimbler and modular. “We are leveraging application programming interfaces [APIs], cloud-based technology and blockchain to take our payments business 24/7/365 and make it seamless across Europe,” she says.

It may be still too early to tell whether corporate treasurers are moving to a completely 24/7 model, but Ms Dean says: “Even if our clients don’t yet see the immediate applicability of instant payments, we are building these discussions into our dialogue so that they can build out their thinking. Importantly, we don’t lock them into a structure that means that they can’t flex quickly. We are bringing as open an architecture as possible in our product capabilities.”

PSD2 opportunity

Payment Services Directive 2 (PSD2) is another regulatory driver of change, which Ms Castelhano views as the future of multi-banking, where companies can aggregate information from banks to help drive efficiency in working capital management and give corporates a better view of the payments landscape in Europe.

“There are still many local payment instruments in Europe and therefore companies have to maintain local bank accounts, though SEPA eliminated much of this need. While we want to help our customers with their centralisation journey, having visibility on local accounts is critical. PSD2 will enable us to aggregate this information via APIs,” she says.

As one of the world’s largest financial institutions, JPMorgan is often the first one to embrace changes and new technologies, according to Ms Castelhano. For example, the bank was at the forefront of adopting the Swift global payments innovation (gpi) service. “That ability to join early and pilot means we can roll it out globally across regions and truly understand the end of benefit to our customers,” she says.

In July 2017, JPMorgan was one of 22 global banks that joined Swift’s blockchain proof of concept, which is part of the gpi service and designed to validate whether the technology can help banks reconcile their international nostro accounts in real time.

Liquidity and working capital

Technology’s influence on the business has changed dramatically, according to Lori Schwartz, head of JPMorgan’s EMEA liquidity solutions business, which includes the management of deposits, cash concentration and investment solutions. “Technology used to be the consequence of what we, as a business, decided to offer our clients. But over the past few years, technology has become the driver of what we will do tomorrow,” she says. “Therefore, we must ready ourselves to be nimble going forward.”

In the case of cash concentration, Ms Schwartz says: “We are sitting in various versions of rising interest rate environments, but from a corporate treasurer perspective that also means the cost of inefficient working capital increases. Everything we have done so far to help them manage centralised treasury structures, to concentrate cash and get visibility of that cash, we can now leverage technology to help us do more.”

She points to JPMorgan’s just-in-time funding solution, which was rolled out in tandem with cross-currency sweeps in June 2017, first in Asia and then more widely. “This allows a treasurer to manage a single source of liquidity in their most functional currency, and yet still manage down and automatically fund local needs across the globe,” she says.

Corporates are focused on how they can best defend their business against the unknowns and are asking for our support in helping them grow

Alison Livesey

The funding solution helps drive efficiencies throughout the working capital cycle, says Ms Schwartz. Traditionally the corporate treasurer would have periodically inserted cash but that required sitting on idle balances in non-functional currencies, with the associated risks. “Technology now connects funding with the anticipation of payment,” she says.

Virtual account management is another way in which JPMorgan is helping customers gain better visibility into, and control over, corporate cash flows, as well as providing them with more self-service capabilities. The bank developed the platform in house to ensure it connected to the bank’s product ecosystem.

“We want to strike a balance between being locally relevant and globally consistent,” says Ms Schwartz. “As we build out our treasury hub locations, we will ensure they are operationally relevant in all the locations. The global technology platforms that we sit on allow us to do that very nimbly.”

The client view

Katia Karpova, JPMorgan's head of client service and implementations, treasury services, EMEA, emphasises changing client behaviour and needs. Her team owns the end-to-end customer lifecycle, from onboarding to servicing to managing their day-to-day operations. “Corporate clients are looking for faster, simpler and more efficient ways in which they transact and communicate with banking partners, in addition to greater visibility and transparency,” she says.

She highlights enabling technologies that will contribute to market-leading delivery, such as artificial intelligence (AI), which can be deployed in many areas from client authentication to fraud management to ledger reconciliation. “We can utilise AI to bring client care to different level of excellence, as well as make it easier for clients to do business with us,” she says.

For example, bots can do some activities much more accurately and quickly, which frees up Ms Karpova’s team to add more value and work with clients proactively to help build their businesses. She adds: “This is not about replacing staff, but spending more time helping clients navigate through market complexities. This is a shift in how our service organisation will operate going forward.”

Cyber fraud is a growing risk and no industry is immune to it, according to Ms Karpova. Her team is educating clients about the risk, but also putting payment controls and monitoring in place, using machine learning and bots to improve accuracy. “Cyber is a front-of-mind issue for our clients and we are there to protect our clients, their money and ourselves,” she says.

Ms Castelhano adds that payments and client services work closely together in JPMorgan to ensure a pooling of data that the bank can then analyse. “When there is an anomaly in the customer’s transaction behaviour, we refer it to Katia’s team to query the transaction with the customer. In that way, we’re having a value-added dialogue with them around their transaction processing.”

From a service perspective, Ms Karpova explains how using APIs can take the pain out of account maintenance and general admin processes, among other uses. “It is about visibility and the availability of data – APIs provide better connectivity to help us service clients more efficiently,” she says.

JPMorgan recently launched Data Once (a digital approach to client onboarding) in the UK and plans to roll it out to other EMEA locations later in 2018. It has built its own portal based on research to find out where clients’ pain points were, and was inspired in part by Swift’s electronic bank account management protocols.

Committed to diversity

It is testament to JPMorgan’s commitment to keeping women consciously to the fore and diversity on the agenda that the US bank has such inspiring women leading its EMEA treasury services team.

Ms Castelhano believes JPMorgan’s success in promoting women comes down to continually talking about women. She was recently at a Women’s Interactive Network (WIN) Middle East and north Africa event and was pleased to see the circle of support in the region. “JPMorgan provided the opportunity for all women in the Middle East and Turkey to come to Dubai for training and to talk about women,” she says.

As well as WIN, the bank created the Maternity Buddy programme and ReEntry, which is a unique programme offering vice-presidents and above, who left the workforce to pursue other ventures, the support and resources needed to resume their careers.

Three of the five women have enjoyed careers of longer than 10 years at JPMorgan, with many taking roles in different areas of the bank. Ms Livesey commends the bank’s approach to training and career progression. For example, it offers training programmes and opportunities such as Promoting Your Success and Leadership Edge, focused on women to help them position themselves for advancement and management roles.

EMEA treasury services also checks its recruitment statistics in a bid to monitor diversity. In 2017, a diverse slate was reviewed by the hiring manager for 90% of roles within EMEA treasury services at vice-president and above. “We always take the best for the role but if we don’t have a diverse slate then we are limiting ourselves from the outset,” says Ms Dean. Impressively, in 2017 50% of all hires within EMEA treasury services were female, a 50% increase on 2016 statistics.

It is a commonly held view that a commitment to diversity contributes to an organisation’s success. In 2017, JPMorgan’s EMEA treasury services business moved up one place to fourth in the region, with an 80 basis points increase in market share, according to Coalition Competitor Analytics.


All fields are mandatory

The Banker is a service from the Financial Times. The Financial Times Ltd takes your privacy seriously.

Choose how you want us to contact you.

Invites and Offers from The Banker

Receive exclusive personalised event invitations, carefully curated offers and promotions from The Banker

For more information about how we use your data, please refer to our privacy and cookie policies.

Terms and conditions

Request a demonstration to The Banker Database

Join our community

The Banker on Twitter