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Treasury Management Solution for Corporations (TMS)
 
As an industry leader in the area of cash management, CMB focuses on developing corporate fund management and treasury management processes, and guiding cash management trends in China. The CMB treasury management system (TMS) provides financial advantages for corporations by applying CMB’s extensive knowledge of cash management and strong IT capabilities.

Centralized fund management is the future trend for corporations.

For large corporations, fund management goes far beyond cash receipts, payments, and balances. For a corporation with tens of billions of RMB, a smart fund management system is required to fully benefit from a fund. To implement effective fund O&M and to transform from a cost center into a profit center, a corporation needs a treasury management system such as the “core banking system” to deal with its assets and wealth in a better and more professional manner.

CMB’s treasury management platform (TMS) is designed to accommodate the treasury management demands of corporations by providing the features of a bank’s system and fully integrating innovative financial tools. The Tlly supports fMS fuinance companies, settlement centers and other professional fund management institutions that operate fund management businesses. To date, CMB has successfully provided system applications, advice and consultation services, and integrated financial services to the finance and settlement centers of COSCO, CSGC, SEC (Shenzhen Energy Corp), China Shipping, and CIMC.

The Core system of finance companies

A finance company is more focused on using corporations’ fund resources to provide high quality financial services through financial platforms - such as transaction settlements, investments, financing, and wealth management - with the aim of improving fund utilization efficiency, enhancing the financial supervision of member companies, adding value, expanding funds pools, and ultimately achieving the corporate goal of integrating industry-finance capital.

Moreover, as non-bank financial institutions, finance companies are becoming more like commercial banks in terms of operation mode and business scope. In this sense, they can learn much from commercial banks in terms of designing, planning and establishing systems and implementing operation modes.

CMB began designing and developing core systems for finance companies in 2004, and has since accumulated wide experience. CMB is now the preferred choice for helping newly approved finance companies set up systems, implement projects, and provide support for revamping and upgrading existing systems.

Advantages of TMS
1. Innovative service concept

“Software + Service”, the operational concept of CMB, is the soul of the continuously optimized TMS and the foundation of bank-enterprise cooperation. Based on the application of TMS, CMB can play a more positive and effective role in advising on treasury management, integrated business cooperation, financial innovation, risk management, and resource-sharing.

2. Vision of the integrated financial application

 CMB’s insight into the development trends guiding domestic finance companies, understanding of national policies, and extensive research has culminated in the visionary business modules of the TMS. CMB considers the strengths of commercial banks and concepts of fund management to integrate innovative financial tools and continuously refine the TMS.

3. Reputation, Background and Specialty

Underpinned by more than 20 years of growth, CMB has become a well-respected bank with over CNY 2 trillion in assets. An early start and continuous innovation have positioned CMB at the front edge of cash management innovation in China. The TMS in particular is a core product designed and developed to adapt to the specialist areas of finance companies. Each aspect of the TMS, from business, processes, and operations to management, interfaces and models, is based on considering the business characteristics of finance companies and aligning the solution to their special features.

4. Flexibility and Expandability

The TMS is based on structures and objects, and its modules are classified by business objects. The system is structurally flexible and offers diverse functionality. It can satisfy the management and configuration needs of different scales, management modes, and divisions of rights and responsibilities. The TMS is designed to use multiple parameters for configuration, services and modules, and incorporates data exchange functions between all its management systems to ensure strong expandability and configuration capabilities. All versions provided to clients are upgradeable and backwards compatible to reinforce system expandability.

5. Security at the Financial Level

The TMS can provide financial-level security while the system is running. Compared with self-management, the system is more secure, efficient and cost-effective. It employs the CA certification and security control measures of CMB’s online banking system to guarantee communications security, and implements fully secure multi-layer data encryption. Fund operation security is protected by mature risk management, analysis, forecast, monitoring, and alarm systems that ensure the security and integrity of corporate fund operations and business processing.

The TMS serves as a specialized fund management system that addresses the need of finance companies or settlement centers for centralized fund management and corporate fund operations. The system is designed not only to meet all routine business needs, but to also provide a robust set of references for the fund management modes of commercial banks via a complete set of services and rich functionality. It is a core management system that integrates and manages transaction settlements, cash flows, local/foreign currency capital pools, budgets, credit, bills, investments and wealth, risk control, and decision analysis.

The system helps corporations operate financial services and funds, and supports supply chain management in corporations’ upstream and downstream companies. Comprising complete internal accounts, fund pricing, risk management and decision analysis systems, the TMS can serve as the core business system of finance companies by effectively supporting their business operations. Through advanced and flexible data exchange solutions, the TMS seamlessly connects with corporations' management systems to realize management synergy. The TMS strengthens fund regulating capabilities, lowers fund operation OPEX, controls financial risks, and promotes the common development of member companies in a way that significantly enhances holistic competitiveness.

System functions

The TMS comprises six systems that cover processing, accounting, core business, decision analysis and risk management, the ERP interfaces for bank-enterprise connection, and the ERP interfaces for the online banking channel.

1. TMS processing system

The comprehensive processing system is the base system of the TMS. It includes basic application modules such as system settings, public settings, user management, client management, privilege management, and process management.

Functions Highlights – public settings
1) Provides settings for basic account charts and charge management in the financial system.
2) Includes TMS users’ post and privilege settings.
3) Maintains and manages basic data for institutions, currencies, interest rates, countries, exchange rates, abstracts, interest accrual codes, bank numbers, and work calendars.
4) Enables queries on the logs for management system maintenance, business processes, and user operations.
5) Assigns a unique client number to each member company and related banks for centralized management; registers client information; manages upstream and downstream supply chain information; and implements multi-level client management on, for example, the management relationships between multiple levels of a corporation such as business units, secondary business units, and subsidiaries.

2. Accounting system

The accounting system forms the core of the TMS fund accounting process. By implementing a full accounting system, the TMS can automatically generate accounts for all businesses and complete accounting entries to achieve business-driven accounting.

Functions Highlights – accounting system 
1) Sets up a full accounting system for non-bank financial enterprises to manage accounts, currencies, interest rates and exchange rates.
2) Supports the treatment of multiple sets of accounts from multiple settlement centers on one platform;
3) Adapts accounting processes to each business module and generates automatic accounts in all business systems.
4) Enables entry reversal and wipe-off for all businesses, and provides automatic rollover for several internal accounting modes.
5) Provides daily and monthly closing, and automatic batch treatment at the end of each day.
6) Enables interest accrual and provision in the same way as a bank.

3. Core business processing system

The core business processing system is the main system of the TMS comprehensive business processing function, and forms the core of the whole platform. It includes the following systems: account management, transaction settlement, credit financing, bill processing, budget management, investment and wealth management, international settlement, account voucher management, cash management, report center and general book-keeping.

Functions Highlights – account management
1) Opens an internal settlement account, sets relevant accounts for each member company, and establishes internal accounting accounts for settlement centers.
2) Processes operations for account opening, closing, and freezing; overdrafts for member companies; and internal accounting.
3) Handles various notice deposits, agreed deposits, and the regular businesses of member companies.
4) Manages the accounts of finance companies with different banks and the sub-accounts opened for all member companies.

Introduction to functions – transaction settlement
1) Centralizes the handling of daily settlement businesses such as payment, collection, salary payments, tax, and fund allocation; includes: external payments, fund appropriation, enterprise’ bank accounts scanning, real-time collection, internal fund transfers, bank allotments, cash receipt and payments, expense account complement, payments through the online corporate banking system, banks’ bill payments, and overseas payments in foreign currencies.
2) Provides operations such as batch payment handling, purpose management, assessment and approval, queries, entry reversal and wipe-off; complies with the operation practices of tellers, provides review through keyboard entries or record consulting to improve operational efficiency, and supports special modes of assessment and approval for multi-level payments and large-amount payments.
3) Supports settlement bills (such as checks and drafts) in local/foreign banks and currencies, and enables the bank bill management process.
4) Manages cash and blank vouchers.
5) Allows reconciliation with banks for funds managed by the TMS. The account in transit function reduces user workloads and improves reconciliation accuracy. 
6) Provides the general book-keeping function to enable complementary book-keeping in finance companies for reimbursement.
7) Directly links the above services to budgets to enable budget control by automatically determining budget limits and overspending, automatically deducting limits, and processing submissions for approval.

Functions Highlights – bill management
1) Separately manages receivable and payable bills. 
2) Manages the acceptance and commercial bills received or issued by corporations and their member companies, and supports various bill processing modes such as endorsement, discounts and rediscounts to help corporations control acceptance risks on bill maturity.
3) Performs operations on bills received by corporations and their member companies such as registration, queries, endorsements, pledges, discounts, collections, bill keeping by banks, and bill entry and exit.
4) Prompts the application, issuance, and acceptance of bills issued by corporations and their member companies; makes payments and processes bank acceptance bills on maturity.
5) Cooperates with CMB’s bill system and the PBoC’s ECDS.
6) Creates a bill pool, and manage bills as cash through operations such as term management, the pledge financing of bills in hand, and CMB’s e-bill conversion of kept bills.
7) Integrates all bill operations with credit management, and automatically links collateral management and limit management.
8) Systematically operates supply chain bill settlement through synergizing with the supply chain system.

Functions Highlights – credit financing
1) Manages the financial businesses operated by finance companies such as loans, entrusted loans, and credit.
2) Includes services such as lending, entrusted lending, bill discounts, L/Cs, guarantees, and finance leases; supports management functions for enterprise credit, enterprise collateral, contracts, and guarantees.
3) Supports pre-lending, lending, and post-lending management by referencing the processes and methods of banks’ loan management systems; performs pre-lending enterprise credit analysis, loan release, loan extension and overdue loan management, repayment management, and freezing limit management.
4) Supports general functions such as expiry prompt, loan queries, and loan voucher processing.
5) Manages all bank financing and guarantee services.
6) Manages external financing products by type such as medium-term bills, corporate bonds, short-term financing bonds, and trust products.
7) Supports general functions for various financing products such as expiry prompts, comprehensive queries, and voucher processing.

Functions Highlights – budget management
1) TMS budget management can effectively enhance the overall financial control of corporate funds for precise fund management.
2) Corporations can establish a comprehensive budget management system with TMS, which supports a number of budget management modes for customizing budget accounts and simplifying the construction of multi-level budget systems.
3) Functions include budget preparation and submission by member companies for approval, the review of member companies’ budgets, and budget adjustment and control.
4) Real-time budget control allows automated checks on budget execution based on transactions in accounts, systematic payment control, and automated rejection for payments beyond budgets/submission to an authorized reviewer for approval. Corporations can make accurate cash flow forecasts through the budget management system and related functions.

Functions Highlights – report center
1) With a standalone report server, the TMS system applies advanced data warehouse technology to process various data and information, generate special statistical, analytical and forecast reports to support decision-making on cash management. 
2) The system provides nearly 100 common reports for finance companies. These include summaries and classified queries on different businesses, balance sheets, five-level asset quality, fund analysis, money flow analysis statements, PBoC’s 1104 forms, and CBRC's basic statistics on finance companies.

4. Decision analysis and risk management system

This system applies data warehouse technology to customize special statistical, analytical and forecast reports for different businesses. It also provides data support for decision analysis and risk management and control, and outputs up to 100 analysis reports covering, for example, cash flow forecasts, fund analysis reports, and balance sheets.

5. Bank-enterprise direct connection platform, ERP interface

This system directly connects all interfaces to all banks. To date, direct connections with 25 domestic and foreign commercial banking systems have been established. These seamlessly connect with corporations’ management software, and support SAP, ERP and financial software.

6. Online banking channel platform

The systems of member companies, upstream and downstream companies in the supply chain, and finance companies’ third-party clients can connect to the core business system through the online banking channel platform to conduct business.

Eight Features of TMS
1. Holistic fund management

Bank account management: realizes the centralized management of corporate funds. The TMS supports direct interfaces for connecting to all commercial banks and centrally managing the funds distributed in different banks. All accounts can be included in and managed by the TMS.

All-currency and bills management: manages domestic and foreign currencies, and also bills as “quasi-cash” through the ECD and bill management functions. This function enhances the liquidity of corporate funds.

To meet corporate needs for capital pool management, the TMS constructs internal pricing, internal accounts, and internal credit systems. It adapts to different forms and stages of fund collection management for different member companies, for example, receipt and expenditure separation, unified receipt and expenditure, cash pools for entrusted loans, and nominal cash pools.

2. Multiple management modes 

TMS supports the coexistence of multiple sets of accounts and multiple management structures, such as finance companies only, settlement centers only, a combination of the two, or finance company + multiple settlement centers. It supports multiple modes of internal and external fund collection and the centralized collection and payments. 

Finance companies and member companies can configure clients with different privileges and functions to adapt to their management requirements. Through the TMS corporate counter system, finance companies can support online and counter services online for member companies. Member companies can carry out various businesses through their online banking systems, and cooperate in the management of supply chains and capital chains through the TMS.

3. Powerful business functional modules

Settlement: settles all collections and payments, external payments, internal transfers, bank allotments, other payments, ECD, electronic collection, enterprise’ bank accounts scanning, bill collection and other collections of corporations

Deposit: applies to internal accounts; current, time and notice deposits for member companies; and deposits by finance companies or member companies with banks. The system provides various operations for deposits, such as account opening and closing, provision, interest accrual, partial withdrawal, overdraft management, freezing management, entry reversal, and wipe-off.

Loans: provides two management functions for internal credit and bank financing. Internal credit allows finance companies to handle all lending businesses. The type, term and interest rate for loans can be freely defined, and the release process and loan management applies the same methods as banks. Bank financing allows all the asset businesses of banks to be managed, and employs the information system to manage credit, working capital loans, project loans, syndicated loans, bills, and guarantees.

4. Flexible control of money flow and capital pool

Money flow management: enables the management of budgets, receivables, bills, and loans through the TMS; liquidity management of the cash inflow and outflow of finance companies, including cash flow forecasts and analyses; and the management and control of money flows through accurate budgeting, transaction settlement and process management.

Capital pool management: concentrates liquidity management, scattered funds and financial assets in different statuses to form a capital pool (cash pool and bill pool).The TMS can transfer the stock in the pool internally, and use it for investment O&M, such as conversions between time and current deposits and subscriptions to wealth management products.

To ensure corporations and member companies always have sufficient working capital, the system can arrange terms for different assets for investment and pledges, or redeem assets to maintain their value and high liquidity potential. This achieves economies of scale based on huge amounts of corporate funds.

5. Effective risk management

Management and control of liquidity risk: enables corporations to precisely control monetary inflows and outflows and manage liquidity risks by accurately calculating cash flows. When a liquidity gap occurs, a corporation can acquire funds by asset disposal, external funding from the overdraft facility of a legal entity’s account, or by self-service borrowing. The system can obtain credit from banks by efficiently managing a corporation’s financing activities and the corporate bonds, medium-term bills, short-term finance bonds and trust products that have been issued to create a more robust and flexible capital chain.

Management and control of operation risks of all member companies: implements strict privilege management, process management and risk alarm condition settings for all transactions to control risks from user operations.

6. Financial system security 

The TMS implements financial system security, exclusive system data custody, and local and intra-city application-level disaster recovery support to maximize the risk resistance of corporations’ fund systems and the core systems of finance companies. In terms of communication security, all data transmissions are CA certified and encrypted. The security level exceeds all other existing online corporate banking systems, and effectively prevents external attacks, cracking, and phishing.

Strict operation specifications and user manuals are provided for the front-end devices and clients managed by corporations to guarantee secure user operations. A standalone security module for direct connection is supported by professional direct connection management, while the system’s implementation direction function ensures secure and fast business processing through all banks.

7. High system expandability 

TMS can seamlessly connect with corporations’ management systems, such as ERP, financial management, HR, and OA. The TMS is continuously upgraded to support newly added financial operations; for example, connections with PBoC’s e-bill system, the application of capital pools in foreign currencies, FX management, and new products and services made accessible by CMB.

Independent personalization development and maintenance teams are responsible for continuously upgrading and improving the system, meeting new service demands, and developing new applications.

8. Rigorous project development and professional system operation and maintenance

CMB's development team comprises 100 members and is responsible for project design and R&D. This involves designing and developing standards for financial systems and implementing and testing development processes to ensure secure and stable operations that provide maximum and controllable safeguards on implementation.

With project management support from headquarters, branches and sub-branches, CMB’s project management and O&M services are far more robust and considered than those provided by ordinary software developers.

Security technology and measures

Certificate: CMB’s digital certificate and digital signature system

Login: effective identification mechanism, password fault-tolerance protection, storage and transmission mechanism for highly secure passwords 

Communication: VPN, dedicated line connection; two-layer encryption, public SSL and private cryptographic protocol

Transaction: privilege review and control, card operation required for payments

Client: application dynamic library digital signature, no key data or information stored with clients, specialized anti-Trojan technology, and message notification mechanism

Disaster recovery and data backup: load balancing, hot backup, disaster backup center, multiple modes for software and hardware backup

System operating environment: multi-layer firewall protection, different levels of security zones and logs, real-time monitoring, national security agency review

Scope of Application

1. Corporations with or without a settlement center that operate in the same way that settlement center;
2. The finance companies that service corporations;
3. Medium and large corporations with complete regulations on financial management, a fund management network, and high requirements for information systems.

TMS Product Pricing
1. Direct pricing: software acquirement expenses, project implementation expenses, software maintenance fees, system hosting fees
2. Integrated benefits: strategic partnership between banks and enterprises 

Application procedures
1. A client contacts the local CMB office to file its system application;
2. The CMB Cash Management and IT Depts at CMB HQ evaluate project feasibility;
3. The CMB HQ project team performs demand analysis and justification, agrees system applications and customization solutions, and organizes a joint project team with the client.
4. An agreement is signed between the bank and the enterprise. The joint project team finalizes a development plan, and organizes in-house or outsourced system development;
5. System debugging and testing, acceptance and operation.
The contents on this page are for reference only. Please refer to the notices and specific regulations of local offices for details about certain services.

Note:
All the contents stated above are for your reference only. Please consult the local branch of China Merchants Bank for further information. China Merchants Bank reserves the ultimate right of interpretation for the contents in this page.