Strategic Treasury

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Breakout Sessions: Challenge, Debate and Insight Participants at the EACT Summit attended a number of in-depth workshops led by leading treasurers on subjects as diverse as the art of fx risk management, operating in challenging markets and how to create a cash culture. We summarise the findings.

Breakout Sessions: Challenge, Debate and Insight

Breakout Sessions: Challenge, Debate and Insight

By Helen Sanders, Editor

Participants at the EACT Summit chose to attend two in-depth workshops to learn from leading treasurers, debate and share experiences in some of the areas where treasurers add the most value to their organisations.

Operating in New and Challenging Markets

During this session, Robert van der Zee, Treasurer of the World Food Programme (WFP), the UN agency dedicated to alleviating hunger globally, and Lorcan Travers, Investment Manager at Johnson & Johnson and EACT board member, shared their diverse experiences of operating in challenging markets. For WFP, the primary challenge in many of the 80 countries in which they provide food assistance is to get cash into the country, with cash based transfers, such as prepaid cards and mobile money becoming increasingly important as a way of getting aid to people quickly. For Johnson & Johnson, an AAA-rated company with $40bn of cash, the issue is the opposite i.e., getting cash out of the countries in which they operate. This is critical to maintaining the group’s AAA rating, particularly bearing in mind their risk to banks and commercial counterparties that have a lower rating.

In discussing both situations, participants agreed on the importance of applying global standards and processes, with some flexibility to accommodate regional variations. For WFP, for example, despite operating in challenging markets, two thirds of their flows now pass through SWIFT.  For Johnson & Johnson, a regional treasury organisation, that balances market proximity with standardisation, has proved very valuable.

Finally, participants discussed some of the geopolitical changes that are affecting all markets, such as the potential impact of actions that President Trump may take during his term of office, and the Brexit process. Treasurers emphasised the need to remain nimble in dealing with unpredictability and change. In addition, the markets considered ‘challenging’ are not static, depending on market, regulatory, political and economic changes. Many of the countries in which WFP operated in the past, for example, are those that have experienced conflict; today, however, this is not necessarily the case, which impacts on the conditions in each country, the type of needs experienced by the population, and the best way of meeting them. 

Robert van der Zee
Robert van der Zee

Treasury Technology Innovation in Context

The technology breakout session had  three key themes: big data; digitisation, and the future of technology.  Although ‘big data’ is discussed regularly, what is more relevant to treasurers is data analytics, and how to use data in a more targeted and strategic way. Cash flow forecasting is a key area where data analytics is adding value for a growing number of organisations, for example. Similarly, analysing payment patterns and cash flow dynamics to identify fraud is becoming a more important priority. 

The digitisation theme resonated strongly with most treasurers, but the conclusion was that there is still a long way to go, particularly as current initiatives are often too fragmented. Instead, treasurers are becoming more focused on ‘end to end’ digitisation across the financial value chain, as opposed to focusing on specific elements of it.

There are some treasury activities where treasurers agreed that digitisation would offer some immediate benefit, such as bank fee reconciliation, bank account reconciliation and bank account opening/bank account management. While new opportunities are emerging to address challenges in these areas, there is not yet widespread familiarity or adoption of these solutions, a situation that is likely to change in the coming years as successful case studies become more widely publicised.

Looking ahead, while treasurers welcomed the innovation that had taken place over the past five or ten years, they indicated that the challenge and priority ahead would be to focus more on security. While efficiency and cost savings were central to the business case for new technology in the past, increasingly security and control is front of mind for the treasurer and CFO, which will increasingly drive technology investment decisions.


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