Fintech and Friends Reshape Treasury
Fintech is growing part of the tech sector that’s changing how treasury gets done.
Search Merriam-Webster online for "fintech" and you're told the word isn't in the dictionary. But a Google search for the word will yield about 35 million results in less than a second. Between those two outcomes lies a technology field that may be hard for some observers to define, but one that is reshaping the worlds of treasury, finance and banking in the new digital age.
This month iTreasurer takes a look at how banks, despite assumptions to the contrary, are on the cutting edge of today’s digital revolution and more importantly, don't view fintech innovators as competitors but as clients and partners. Indeed, banks are seeing great opportunity aiding and servicing fintechs as well as helping corporate clients connect with them. "Besides the collaboration and investment opportunities, we also see increased demand from fintech providers for specific payment capabilities—which make fintech companies an increasingly important client segment for us," says, David Watson, head of cash management Americas and global head of digital cash products at Deutsche Bank. Read more here.
iTreasurer also takes a deeper dive into how blockchain is increasingly being offered as a hedging tool with the latest entrant into the derivative platform space, trueEX. While corporates are reviewing blockchain for its wide variety of uses and benefits, it could take a while. But they shouldn’t wait too long. "Corporate treasurers should be watching blockchain closely, because within a couple of years it will be on everyone's agenda," said Caitlin Long, a blockchain expert who jumped to the sector from a senior Morgan Stanley position working with corporate treasurers. "A few corporates have quietly been using bitcoin since 2014, but mostly in small markets where banking systems are not well developed." Read more here.
Meanwhile, on the accounting front, FASB may have a nasty surprise in store for corporate treasuries. That is, a new accounting rule update that affects banks’ loan-loss reserves that takes effect in about two years. The Current Expected Credit Losses (CECL) accounting standard introduces a new model for the recognition and measurement of credit losses for loans and debt securities. While a ways off, now’s the time to bone up, because both investment-grade and non-investment-grade corporate borrowers may feel the impact, especially if the economy swoons. Read more here.
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.