Many thanks to all the members and guest attendees of NeuGroup’s T30 2017 H2 Meeting in Toronto on November 29-30. Here are some key highlights from the meeting:
Banking Structure Leads Transformation Priorities. Nearly two-thirds of T30 survey respondents said they had recently completed a treasury transformation project (13%) or have one currently underway (47%), and 100% of those cited banking infrastructure and cash management as a focus, with treasury systems infrastructure close behind (78%). One member’s initiative—a recent winner of Treasury Today’s Adam Smith award—has already shrunk by half its 122 banks and more than 400 accounts.
• Consolidate access via the TMS instead of several portals. The member also implemented Kyriba software as its user interface, “so rather than having everyone from AR, AP, and payroll go to the bank portals to make payments or get statements, they can now go to one place to log in and do everything,” said a project manager.
• Big savings in time and money convinces the skeptics. AP embraced the project and saw the time to make payments cut in half; however, other departments, such as payroll, saw little reason to change a system that wasn’t broken and were harder to bring on board.
Tech Impact on Treasury: More Boon than Bust, For Now. Bob Stark, a Kyriba vice president who focuses on strategy, discussed several areas still in their infancy that will likely alter corporate treasury in a major way. Application programming interfaces (APIs), for example, provide a framework on top of which to build applications more easily, and they’re starting to infiltrate corporate treasury, Stark said. He noted Europe’s unfolding PSD2 regulations that aim to give nonbank service providers better access to bank payment systems, providing corporates with more and speedier choices.
• Prepare for disruption in US domestic payments. Faster-payment solutions ranging from Ripple’s distributed ledger solution for presumably cheaper cross-border payments to The Clearing House’s domestically focused Real-Time Payments (RTP) are on the horizon. Stark said SWIFT’s well-functioning global network may forestall its demise, while the reams of remittance information that can be attached to RTP payments—unlike what’s possible via ACH today—could significantly disrupt the US domestic payment infrastructure.
• Robotics and AI will directly impact treasury more than cryptocurrencies. Stark dismissed bitcoin but said other crypto currencies will likely endure, facilitating payments and other financial services, perhaps behind the scene, unbeknownst to users. The big impact on treasury from robotics, already in early-stage use by companies to tackle repetitive treasury duties, will come when machine-learning software applications can adjust on their own to changing circumstances.
• Be thankful treasury groups are highly specialized. Treasury may be spared from the robotics and automation onslaught longer than departments whose functions are more repetitive, such as AP, AR and payroll.
Communicate Treasury’s Relevance, or Else. One member detailed its quarterly presentation to the board’s audit committee.
• Awareness at the board level is key to getting a seat at the table. The first key metric in the presentation is the company’s cash position, then its debt position, followed by FX trends and developments and FX risk mitigation actions. A few other participants said they report quarterly to audit or finance committees, and one said he reports every quarter to the full board, often tackling strategic issues.
• But if nothing ever happens, treasury needs to remind: we’re relevant. This member’s quarterly presentation creates a rhythm and an important expectation by board members. Members somberly acknowledged that companies are doing without a traditional treasurer, and board members may downplay treasury’s importance until a crisis occurs.
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