While economists and politicians increasingly debate the benefits and downsides of globalisation and digital transformation, companies and their employees know what these forces mean for them in practice. They mean complexity. They mean constant change. They mean stress – to business models and to people.
Globalisation has been a central driver of treasury stress for years. As businesses expand internationally, the burden on treasury rises: risk management, foreign exchange to interest rate to regulatory risks multiply; new banking and customer relationships mean new processes and problems; and complex new supply chain issues jostle with new AP/AR, cash management and funding headaches.
But treasurers have at least had decades to adapt. After all, globalisation has been the centrepiece of corporate growth strategy for longer than most executives have been employed and with it treasury assumptions and structures.
Now it is the questioning of globalisation that is causing the next wave of corporate and treasury stress. What happens if the rising forces of ‘localisation’ become more important? What are the key assumptions they may have to revise? What does de-globalisation mean for different regions and industrial sectors, for the availability of finance and access to supply chains? And is there a wider issue – are the easy gains from globalising gone and if so, what next?
Like globalisation, technology – in most cases meaning ‘pieces of software’ – is also turning out to be a bringer of both promises and problems. It is touted as the solution to many of the challenges posed by globalisation. It is also touted as the solution to itself – in the sense that legacy technology, advanced technology in the hands of customers and suppliers, and new technology in the hands of service providers are all challenges for corporates and their treasurers, challenges that technology companies say they can solve.
This may not be the infinite loop it seems but it is true that technology is just as capable of making problems more complicated and expensive than it is of solving them. Implementing new software platforms at enterprise scale is one of the most complex jobs in any corporate, and most projects run over time and over budget, even those that in the end deliver the promised results.
And for all the talk of transformation, for most businesses, digitalisation has meant Rackspace, Salesforce and a third-party e-Commerce and payments platform, if that. Larger, and also purely digital companies, have gone much further but for even the largest SMEs, the costs and complexities of true digital transformation have been unsupportable and the benefits hard to quantify. Traditional communications channels between businesses and customers are failing, disrupting everything from marketing to payments. Digital transformation is finally happening but mostly externally, to companies and not by them. So how do companies recapture the agenda in this process? How can ‘normal’ companies survive the transition? And what role does treasury play?
These two forces have driven structural change in countries and companies to a critical point. Within treasury they threaten core infrastructure treasurers have long taken for granted. Treasury faces the sudden disruption of credit availability and of supply chains; the bankruptcies of key suppliers and customers; the sudden introduction and cancellation of trade tariffs; increased political interference in tax affairs; more fraud and more cyber- and financial crime.
The Copenhagen interpretation
This year’s Eurofinance international treasury event in Copenhagen October 16 to 18 takes these themes as its central narrative. Treasurers from the world’s most significant corporates will share their insights on dealing with this new and difficult environment. They will be joined by renowned economists, academics and thinkers, who will paint the big picture as well as providing more practical advice on both creating growth (through new customers and channels, sales models and acquisitions) and better de-risking. All this will be accompanied by the mix of detailed case studies, research, debates, panels and Treasury labs that treasurers have come to depend on from EuroFinance.
Six work streams over two days allow treasurers to either pick and mix by topic or choose a stream depending on where their company is in its treasury development. Core treasury strength is the first option and offers sessions on ensuring your treasury has strong foundations in cash management by choosing the right centralisation structures. Stream two, “Should Treasury?” looks at whether or not treasury should embark on a number of different projects like revisiting the liquidity set-up, investigating virtual accounts and OBO structures as well as cross border payment and FX strategies. Technology transformations is the third option for treasurers looking to embed new technology, update legacy tech or to go down the digital treasury road. Collaboration is a big theme for the treasury community this year and stream 4 looks at how and where treasury can work with partners to achieve better efficiencies. This might be using data better, collaborating on working capital externally or internally and working with different departments from procurement to tax. If you are a company on a growth journey, stream 5 looks at how to be both global and local and how to find solutions to topics like hedging, M&A challenges and financing if you are in growth mode. Finally global risk management takes centre stage in stream 6 and topics from technology risk to KYC to liquidity priorities in a volatile world are addressed.
Four innovation labs will also be running debates, case studies and demo sessions: From pilot to problem solved is a fascinating mix of real case studies of companies using the latest technology advances like robotics, APIs, AIs and blockchain to solve treasury pain points. The payments revolution will help you to understand the changing payments ecosystem, initiatives like real time payments and Swift’s GPI as well as the many new providers offering real innovation in payment solutions. Working capital and supply chain rebooted will cover all the changes in this field including new providers and solutions and trade developments. Finance 360: a holistic view looks at the revolution in financial services and the developments that will help finance and treasury to advance.
Delegates can join the regulation series where they can learn more about Libor’s replacement, the impact of Brexit, IFRS16 and global tax changes.
Join the world’s leading international treasury event on 16-18 October in Copenhagen. Click here to find out more.