Strategic Treasury

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Head2Head: Spice up Your (Treasury) Life Two things that make treasury interesting and rewarding: relationships and change. BofAML looks at how to spice up your treasury life while managing both.

Head2Head: Spice up Your (Treasury) Life

Bruce Meuli, Global Transaction Services Advisory executive, and Jonathon Traer-Clark, Head of Strategy, Global Transaction Services, Bank of America Merrill Lynch

Bruce MeuliBM
So, Jonathon – another year has passed. And whilst the world has changed in many ways, tell me what you really, really want for the next 12 months… and don’t go wasting my precious time.

Jonathon Traer-Clark

JTC Oh dear… I can see you’re still in holiday mode! But new year, fresh perspectives, so let’s get serious. For me, there are two things that make treasury interesting and rewarding. Firstly, relationships – be they with your tax and legal team, the finance organisation at large, the business, clients or your external service providers such as banks, software or other providers. Secondly, change. It’s a constant theme driven by the dynamics of the business and operating environment, acquisitions, and changes in corporate structure due to market impacts, politics, tax laws and legal changes. This semi-chaotic nature is one of the reasons I work in finance – so personally I’d like to see more rather than less change! It forces us all to be adaptable, have a point of view, and act with confidence.

BM Are you bailing on the answer? I think that’s too philosophical a response – I was looking for your thoughts on the future. Let’s start with your first theme. Throughout 2016, we’ve heard a lot of noise about distributed ledgers or blockchain – we covered it in an earlier column. It’s been hyped as a disruptor, but to my mind, it’s no more revolutionary than the spreadsheet was to the abacus, except in one critical area. It looks to create trusted digital relationships between parties. So my wish is to have a concerted industry view on what this all means, and why it’s valuable for corporates and banks.

 I like that – but it’s a pretty advanced concept. I’d prefer to go back to basics – relationships bring knowledge and experience. Banks and corporates between them have vast reserves of knowledge around treasury, so one of my wishes would be for this to be made more widely accessible. An incredible baseline exists within the work done by industry bodies and the numerous certifications – but truth is nothing beats the ‘mile in your shoes’ argument – and not everyone gets to hear a conference speaker. 

 I think banks owe it to their clients to listen more to their needs, and to use the knowledge they’ve gleaned to tailor their solutions rather than offer off-the-shelf generic tools. Conversely, treasurers can also derive significant value from the thousands of hours of experience banks have developed by working with a wide spectrum of clients. Consequently, bank-corporate relationships can bring mutual benefits. 

 I would also love to see more simplification. Recently I heard KYC (Know Your Client) referred to as ‘Kill Your Client’. Whilst the reference is harsh – and, I might add, one that you and I certainly don’t agree with – I do understand the sentiment. Paperwork and processes which are being executed for legal and compliance reasons. The irony for me is that all organisations have to undertake some form of client validation. For example you wouldn’t send company money on a whim and a message from the CEO would you? So we perhaps all need to step back and try to simplify the way it currently works.

 Remove paperwork and friction? Great idea! I think we’d all benefit from some focus in that space. Equally, we could pool our collective knowledge – perhaps using a trusted digital relationship.

 You’re not letting that go, are you! What else would you like to see?


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