The Bank of Ennui

Blog Post

The Bank of Ennui

This month’s issue of iTreasurer begins with the mundane but important function of custody banks and ends with a look at the effective cybersecurity structures some companies in the NeuGroup universe are using. In between a summary of the NeuGroup’s Treasurers’ Group of Thirty Large-Cap Edition meeting as well as a best practices story on payment cards.
 
On page 1 of the issue contributing editor Barb Shegog discusses custody banks and how they don’t get a lot of love from treasurers. And yet they provide “significant support services to the investment program.” But most investment managers and many in NeuGroup peer groups “only rate their custodian as average.” The problem is that switching to something better is a dreaded exercise. “Many members dread a switch so much they stick with the status quo even if it isn’t really working. Have investors given up on excellence?” wonders Ms. Shegog.
 
In “Anticipated Exposures” on pages 4-5 we take a look at how the treasurers’ role is continuing to change and that their status as the go-to strategic person in the company is a trend that is stronger than ever. We also examine how companies should evaluate operating in high-risk countries—either political, social, financial, economic or environmental. How do companies make investment decisions in such high-risk countries and evaluate risk vs. return parameters on short-term as well as long-term investments? Also a look at how companies should “take stock of recently amended record-keeping requirements, which should be easier to comply with and provide an opportunity for treasury to ensure its systems are capturing and retaining the information correctly.”
 
The T30LC peer group summary reveals that tax reform remains a top concern for treasurers of the some of the world’s largest companies, although they have plenty of other issues to consider. One is their banks’ share of wallet and how much business one has to support the credit group—and how to right-size it. Also, members were made aware that getting what they wished for on, say, a cash repatriation tax break does have perils; that is, activist investors will look to grab any cash distributed to shareholders, which could have an impact on corporate capital structure and ratings. Also discussed were best practices for frequent bond issuers. 
 
In “How to Create a Best-in-Class Commercial Card Program—the (Not So) New Payment Channel,” contributor Geri Westphal sits down with experts from HSBC to discuss commercial card programs. These programs have been around for years, and in most cases they included T&E expenses and a select number of procurement transactions. “Now, as key stakeholders across the buyer’s organization realize the benefits associated with commercial cards and with the increase in fintech innovation, commercial card programs are being structured to capture more, if not all, payment transactions across the entire organization.”
 
Finally, in “The (Inadvertent) Enemies Within” on page 15, we discuss the growing practice of hackers gaining entry to the company’s treasure—be it data, cash, or just systems in general—using naive employees. The answer to keeping hackers in check is an active response team.
 
Enjoy the issue.
 
For over 20 years, iTreasurer has delivered intelligence for treasurers. Based on exclusive access to senior treasury executives who are members of The NeuGroup Network of treasury peer groups, iTreasurer takes their real-world experience to produce articles, case studies and reports that are specifically meaningful to treasury best practice. www.iTreasurer.com.
0