EuroFinance 2019: De-Stressing Treasury
By Eleanor Hill, Editor, TMI
Back in Copenhagen again, this year’s EuroFinance International saw a record 2,200 delegates come together to discuss some of the hottest treasury themes of the moment – from digital treasury transformation to real-time payments and sustainability. Industry experts share their highlights from the event, together with tips on how to de-stress treasury and build resilient practices for the future.
Learning how to draw a cartoon of Donald Trump might not have been top of every treasurer’s agenda when signing up for EuroFinance’s 28th International Treasury Management conference. But the final session of this year’s three-day event, a keynote from Kevin Kallaugher (KAL), the editorial cartoonist for The Economist magazine, provided a little light relief from some of the intellectually challenging sessions held over the previous 48 hours.
Under an overarching theme of ‘resilient treasury’, the conference looked to provide insight into enabling treasury to achieve operational excellence, answer the call for innovation, and help the business respond to disruption. One ‘disruptive’ theme which echoed throughout numerous sessions – including each day’s opening keynote – was geopolitical unrest. On the first day, Karthik Ramanna, Professor of Business and Public Policy at the University of Oxford’s Blavatnik School of Government, shared some interesting perspectives on globalisation and worldwide politics.
He cautioned that while it was important for corporates not to bury their heads in the sand over political battles, it may be wise to steer clear from too much activism or meddling in politics away from home – believing that little could be achieved through such action. This point proved to be contentious among some audience members and was a topic of discussion at coffee breaks across the following days, with corporates questioning their role in making the world a better place.
Jan Dirk van Beusekom
Meanwhile, the second morning’s keynote saw Joan Hoey, Regional Director and Europe Editor of The Democracy Index at the Economist Intelligence Unit (EIU) who was tasked with providing a view on Brexit – just ahead of the 19 October emergency session called by the UK Parliament. While Hoey was unable to predict anything with great certainty, given the unfortunate timing of her speech, she believed the possibility of a second referendum was slim.
And on day three, Charles Hecker, Senior Partner at Control Risks UK, spoke about the tensions between the US and China. He made an interesting suggestion that to develop resilience, companies working in both markets might wish to consider splitting their operations in two: one entity to work in US-dominated markets and another entity for China-dominated markets.
Let’s get digital
Away from the geopolitical discussions, digital disruption was another core theme at this year’s event. Alongside sessions on different aspects of digital treasury, including an informative presentation on Microsoft’s digital transformation, TMI also interviewed the great and the good of the treasury world on the topic (check out our EuroFinance podcasts for the full low-down). As Steve Elms, EMEA Regional Sales Head, Corporate and Public Sector, Treasury and Trade Solutions, Citi, notes: “Digitisation was, again, on everyone’s minds with treasurers now keen to establish roadmaps for their digitisation journeys, taking more of a keen interest in open banking and APIs and looking for their providers to provide support and guidance.”
Shahrokh Moinian, Head of Wholesale Payments for EMEA, J.P. Morgan, agrees: “My takeaway from the conference this year is that treasurers are expecting automation and digitisation from their banking partners – whether that’s API solutions, real-time payments or virtual account management. It’s a must-have, not a nice-to-have. We’ve been talking about ‘real-time treasury’ as an aspirational concept for years now, but I think we’re finally here – this is what they are implementing and they won’t look back. Tomorrow’s treasury has arrived.”
Similarly, Victor Penna, Head of Cash Management, Europe and Americas and Global Head of Cash Structured Solutions Development, Standard Chartered Bank, adds: “The biggest shift this year is that many leading treasuries are now implementing their digital strategies rather than just talking about their roadmap.” Robotic process automation (RPA) and data analytics are two areas where there has been a fair amount of work over the past 12 to 18 months, he explains. “For example, many treasuries have automated processes such as bank account signatory management and/or compiling of cash flow forecasts. Treasurers are also trying to deepen insights into areas such as risk, liquidity, and working capital by capturing and analysing data using data analytics tools.”
RPA was also a key theme for Xavier Szebrat, VP Risk Management Solutions, Deutsche Bank, who participated in a session outlining how RPA is being applied to reduce foreign exchange (FX) risk and enhance liquidity management by integrating balance sheet hedging with cash management. Over the past 18 months, Yusen Logistics’ German business has worked with Deutsche Bank as its leading banking partner in developing an automated solution for the company’s foreign currency hedging, using the bank’s Maestro platform. “Having worked at three global banks, this solution is the most advanced combined risk reduction and cash management automation system I’ve been exposed to. It is helping the corporate treasurer in ways I did not think possible,” says Szebrat.
Others agreed that technology truly is changing the role of the treasurer. Says Penna: “Treasurers are really thinking about how they can support and drive business transformation going forward. For example, a number of treasurers talked about helping their businesses grow their online presence through the use of alternative payment methods and real-time FX to enable these transactions.”
Not everyone was focused purely on the technology side of digital disruption, however. Jan Dirk van Beusekom, Head of Strategic Engagement, BNP Paribas Cash Management and Trade Solutions, comments: “The most interesting trend from the conference for me is the focus on the human aspect in the digital transformation journey. Many discussed the impact digitalisation has on employees. In my opinion, it will have a great effect on the accuracy and efficacy of treasury operations, as long as machines focus on the ordinary and humans on the extraordinary.”
Van Beusekom also homed in on the role of collaboration in enhancing digital innovation: “Corporates with banks in co-creation; banks with banks on standardisation; and banks and corporates with fintechs and other providers to enhance the customer experience.” While some corporates are working directly with fintechs, many are not quite at that stage yet, as Matthew Davies, Head of GTS EMEA and Global Co-head of Corporate Sales for GTS, Bank of America, explains: “Many of our clients would rather have the banks be their intermediary, and for the bank to partner with a fintech on a white-label solution.”
And the significant presence of fintechs at this year’s EuroFinance represents the fruit of the kinds of partnerships Davies is referring to. A number of the fintechs were no longer confined to Innovation Alley (although there were many there too) and some fintechs had bigger and busier stands than the banks – a very different state of affairs since EuroFinance was last held in Copenhagen in 2015.