Published: May 22, 2019
The world over, treasurers are seeking improved visibility and control over their data. After all, data is the lifeblood that drives corporate treasury success. Martin Bellin, Founder and CEO, BELLIN, believes that having a tool capable of aggregating that data “has exponential utility”. Is he right, and more to the point, does it really exist? In this executive interview, he explains his treasury worldview, talking freely of bridging the gap between corporations and the services they need.
Martin Bellin (MB): Treasury’s role is undoubtedly becoming more significant as twin forces work together: liquidity management is rising in importance as markets become increasingly volatile; and at the same time, corporates are seeking to become more bank-agnostic. Over the past years, CFOs have learnt that there is a function within their organisations that can deliver on these demands – and more: treasury. As the collector and controller of financial information about the future of the company, even M&As and carve-outs, treasury’s promotion into the strategic heart of the finance department was perhaps inevitable.
Technology is part of that story and is playing a pivotal role in shaping the overall finance function. Routine accounting work can, and will, be automated. And while there are repetitive aspects of treasury that machines will perform more and more, treasury will always require strategic thinkers to anticipate the future. Being a great treasurer requires intuition and opinion as part of a wise decision-making process.
Of course, well-informed decisions also require the assimilation of vast pools of information. This is why, compared with other finance functions such as accounting, treasury is increasingly visible. In fact, treasury is a data gold mine.
MB: Talking to treasurers at conferences about the latest ‘buzzword’ innovations – notably blockchain and AI – it seems most have an opinion and many ask how these ideas may be applied to treasury. But the vast majority of treasurers who are at the coalface every day are still tackling fundamental challenges. They have neither full visibility nor transparency over their cash and accounts; having that is still state-of-the art for them.
As a provider, BELLIN not only helps sophisticated treasury functions to realise their ambitions through delivering the cutting-edge technologies, we also help departments which are not as far along in their journeys, to raise them out of their sub-optimal reality.
MB: At the risk of sounding like a salesman, BELLIN’S role as a technology platform provider is to take away the client’s complexity, enabling them to choose whatever they need in their particular business environment, and have it conveniently accessible in one place. We become the conduit between all the market offerings and the corporate.
As an example, a few years ago, SWIFT was seen by many corporates as too expensive, complex and cumbersome; it was for the largest firms only. We presented the possibility of including it in our application. Now, when we offer payments ability to clients, we have no need even to mention that SWIFT is behind it. It no longer matters to clients what technology is facilitating their payments, as long as they can set up an instruction as they wish, push the button and send it securely, reliably and transparently from any location to any bank in the world.
If a corporate is looking to deploy a number of systems side-by-side, the most common error is to establish the wrong ‘entry point’ for all of these systems – by setting them up separately – and not looking for a one-stop-shop alternative. Treasury ecosystems subject to this basic mistake can become over-wrought, and this is something we see even in treasury functions that are considered to be relatively sophisticated.
It is typical for a corporate to maintain about 30 bank relationships worldwide. Most will have a central operation maintaining, say, eight core banks. A well-organised treasury will have implemented a single solution – the entry point – to connect to those eight. The remaining banks, used by de-centralised operations, however, still need to be connected via web-based platforms, each with their own tokens and user-interfaces. These are not part of the treasurer’s single-view. The number of systems required to support this complexity rises accordingly, as does the risk.
But current technology can remove that complexity; currently-available solutions can easily and quickly remove up to 80% of a corporate’s applications. So, technology that is available to use today can achieve many of the goals that treasurers are still thinking will be reachable only in nine or ten years’ time. It really is that simple.
MB: IT security is no more in the scope of the expertise of corporate treasuries than treasury technology is of internal IT. But both are core parts of our business; we cannot afford to let clients down. As a demonstration of our capability, we look after the treasury needs of a data centre provider using our platform, not theirs. Even though the client has its own secure cloud environment, by outsourcing its entire treasury platform, processes, and security, the client is mitigating concerns of internal fraud. This also removes the risk of running up against a lack of treasury system expertise in its in-house IT function, and indeed the intense resource-pressure that this function commonly faces.
The internal IT point matters because if something happens, treasury’s strategic importance means that it needs real-time action. At BELLIN, we have a dedicated specialist team available 24/7 to ensure our clients’ system availability. We now even have a mobile security app to enable treasurers to identify and authenticate themselves when logging into the platform; the same two-factor security measures could, for example, be used to sign payments. Each time a payment needs approval, the system could send a notification to the user’s mobile phone requesting verification that it is truly them taking the action. As sensible as this sounds, the misguided belief that mobile phones are not secure, prevents many corporates from using their company or personal devices as part of their security regime, which is a shame.
MB: For treasurers seeking to remove complexity, decisions will be based around whether these products make their life easier. The core issues for them are speed and cost of payment. If a product ticks both boxes and operates faultlessly, then few will have a preference as to which system is facilitating that payment. Ripple is good for SWIFT – and thus treasurers – in that its creativity and competitive spirit is forcing market responsiveness.
That said, for corporates, there is a huge amount of internal headroom available, without looking at all these new solutions. If they intelligently leverage what options are available like BELLIN tm5, they could free up a lot of money. I’m concerned that the hype around innovations is driving out possibilities that are at hand right now – whether that be clever ways to process international payments as domestic payments instead, or solutions such as multilateral netting. So, I would personally encourage a ‘back-to-basics’ approach before jumping on the innovation bandwagon.
MB: If every bank builds its own APIs, there will be little difference between APIs and host-to-host; the results are more or less the same and the complexity remains. Whilst APIs are allowing the discussion around connecting globally within a single-system environment to be understood by most treasurers, ultimately, corporates are interested in the feasibility, security and cost of connection with a third party rather than how it is made. So, again, I think APIs certainly have their uses – but treasurers don’t necessarily need to be concerned with the mechanics or spend too much time looking at possible use cases for APIs.
MB: When I was a treasurer, my role involved collecting and analysing data from multiple subsidiaries and, through that, presenting an overview of the business. There was no real-time capability back then, so it was a different ball game. The technology was also very different. Today, it should be possible for companies to quickly and easily share all of their local data in one central platform, with all of the detail they require. By equipping subsidiarises with the right tools and infrastructure, treasury will be paid back in full with better data.
We are used to sharing personal information on social media; why not use the same approach to share corporate knowledge on one platform, in real time, automatically, so treasury can check whatever it wants, whenever it wants? Responsibilities can then be transferred easily because the whole organisation is sitting in a single, virtual room.
If this notion is still alien for some organisations, then I would suggest that it is just through lack of understanding, or fear of change. With the right technology, there is no need today to even think about how data is transferred; the only concern is that it is transferred securely and in real time.
MB: As well as organisational sharing of data, there will be industry sharing of data too – with KYC being a case in point. There is now light at the end of this long, dark administrative tunnel, mostly being generated by SWIFT’s solution, as the others fall away.
BELLIN will connect to SWIFT’s KYC Repository, enabling our corporates to exchange KYC data in the most convenient way – and this is exactly what we already do in the payments space. The beauty of a KYC repository is that corporates and banks no longer need the cumbersome and labour-intensive one-to-one connection. Every bank requires a different set of KYC information, each in a different format. This is what takes time and effort to exchange. In the future, there will be one repository of data for the corporate to populate and maintain. Whenever a bank needs that data, it can be granted access to the repository within which it selects the information it needs.
Admittedly this is some way off but, as an industry, we are making advancements. It comes off the back of the progressive digitisation of connections between corporates and their banks. The latest technologies are enabling corporates to make changes in the most convenient and affordable way.
However, banks have lost some of their power in their relationship with clients as a result of new technology. For a corporate, being able to work with a certain bank is no longer seen as an ‘honour’. Treasurers, at least those in large corporates, are empowered to be more selective. This attitudinal shift is creating more motion; companies expect more from their banks, and banks are having to become service-based businesses, ‘adding value’ in order to differentiate like never before.
So, if corporates want to access one platform upon which to do business and provide data for programmes such as KYC, then banks should pay close attention. Banks would also do well to stop reinventing the wheel and instead find partners with whom they can exchange data without having to build new platforms.
Looking to the future, I urge treasurers to think in new ways about the processes and systems they already have in place, finding the most efficient ways to connect. Ideally, the focal point of this renewal will be a single hub, such as the BELLIN platform, enabling treasurers to collect data from the group, banishing the exchange of Excel spread sheets for data collection and bringing every required system within easy real-time reach. Then, by facilitating the same level of connectivity with the outside world, treasurers will be building the kind of bridges that enable access to the ultimate prize: control and visibility over all of their data - worldwide.
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