What's Neu - News from the The NeuGroup Network of Peer Groups

Blog entry
By jneu, March 26, 2013

RBS makes good first impression at GCBG spring meeting.

We want to thank first-time, NeuGroup meeting-sponsor RBS for their support and contributions to last week’s Global Cash and Banking Group (GCBG) sessions at Google. RBS’ International  Cash Management and International Banking colleagues proved to be a welcome addition to the leading global banks that have supported the GCBG. Among the key takeaways from the March 20-21 meeting:

Future-proof your treasury. A session on treasury innovation was framed by technology changes in mobile platforms (mostly tablet driven) and SEPA.

  • Being more XML-fluent. SEPA helps underscore the importance for treasury managers to become “XML fluent” to successfully migrate toward an e-everything future that includes greater connectivity via SWIFT as well as compliance with euro and eventually global payments mandates.  

Shared Services to Shared Solutions.  A session on best practices in Shared-Services Centers (SSCs) also highlighted the importance of technology and the blurring governance lines for SSCs between finance and IT functions. This is part of an emerging trend toward shared solution centers emphasizing higher-value, technology-enabled solutions and not mere centralized back-office processing.

  • Will bank regulations and Dodd-Frank erode the attractiveness of In-House Banks?  New platform descriptions might also help in other ways. The growing popularity of in-house banks as a centralizing platform for corporate treasury activities has triggered concern regarding the extent that regulations aimed at mitigating the systemic risk of the banking system are allowed to spill-over to anything modeled after a bank.

In addition, we also thank our GCBG members for your participation and contributions to last week’s meeting.

The Global Cash and Banking Group is part of the functional treasury segment of the NeuGroup Network. Formed in 2004, this NeuGroup for MNC global cash managers brings together its members biannually to discuss optimizing treasury operations in response to current challenges.

Blog entry
By jneu, March 26, 2013

NeuGroups for FX managers confront new data opportunities and challenges during joint FX Summit meeting.

The key message from The NeuGroup’s FX Summit, a joint meeting of our FX Managers’ Peer Groups, was that more quality information leads to better decisions. Underscoring this message, presentations by co-sponsors Deutsche Bank and FiREapps provided numerous examples of how information, technology and analytics should be improving the hedging practices of multinational corporates.

FiREapps has built its business around helping multinationals get at better information about their FX exposures from their various ERP systems and other data sources. Wolfgang Koester, CEO and Co-Founder of FiREapps, said his company’s one word mission is “Confidence: giving treasures and CFO’s confidence that they know what their FX results impacting EPS actually will be.” In the latest release of FiREapps, there are numerous filters to perform analysis on the exposure data and drill down by currency, reporting entity and more to both better understand the sources of FX exposure on company balance sheets and validate with control frameworks that the data being drilled into represents real exposure. From there, treasury can calculate the net exposure and hedge it both more effectively and with higher levels of confidence.   

Building on this theme, Ramon Bauza, Head of Deutsche Bank’s North America Capital Markets and Treasury Solutions Risk Advisory team, presented a simple way in which FX managers can hedge a higher percentage of their exposures to reduce the earnings volatility impact of FX at less cost. Such a strategy when combined with higher confidence in the validity of exposure information would give treasurers greater confidence to boost hedge ratios above the current 50% norm today without fear of ending up over hedged. 

Not all the data trends will be positive for treasury, however. Participants also discussed the latest reporting requirements for derivatives trades under Dodd-Frank. Members expressed dismay at the administrative hassles expected in reporting inter-affiliate hedges, but also the public information that swap dealers (plus exchanges and SEFs) are obligated to disclose. Some model-based funds will invariably seek to pump this data into their super sophisticated analytical tools to try to discern patterns to help them predict and counter corporate FX trades. This helps explain the increased interest in Algo trading by corporates to help mask M&A-related and other sizeable FX transactions, especially in thinly-traded markets.  eFX platforms, including Deutsche Bank’s, will therefore be increasingly easing the automation of such trade execution strategies and the regulatory reporting and other post-trade processing required by them.

Other highlights from the meeting included a presentation on commodity risk management by one of the group’s more experienced commodity hedgers and an update on the key drivers of the global economy and their impact on the USD, plus the latest on Venezuela. We thank Deutsche Bank and FiREapps for their sponsorship along with the members of both FXMPG 1 and 2 for their active participation.

The NeuGroup's FX Managers' Peer Groups have been serving FX managers from leading multinationals since 2002. These two invitation-only membership groups meet separately twice each year to share insight, experience and benchmark approaches to topical challenges. They conduct a joint summit meeting on a bi-annual basis.

Blog entry
By Anonymous, March 08, 2013

We appreciate all who have expressed interest in our new peer group for regional treasury leaders in China that was recently spotlighted. We are pleased to announce that HSBC will sponsor the Asia Treasurers' Peer Group-China (ATPG-China) pilot meeting on May 14th, to be hosted by Cargill in Shanghai. It is a pleasure to be working with HSBC, a leading player in China, and extending The NeuGroup-HSBC relationship into Asia. We look forward to working with HSBC to build out this group with a successful pilot meeting.

The ATPG-China will complement the ATPG-Singapore group we formed in October 2011. It will also put us in closer sync with our members and other MNCs operating in China who are strengthening treasury roles there to account for this market’s importance, its complexity, and to put more strategic treasury decision-makers with the senior business and finance executives locating there to counter local competition and oversee regional and global lines of business (see also, “Where to Put Your Regional Treasury Center in Asia?”).

This group will provide a forum for treasury leaders to exchange knowledge and share insights on current topics relevant to treasury activities in and around China, as well as those planning for treasury expansion there. 

Blog entry
By jneu, February 06, 2013

The NeuGroup is pleased to welcome Daisy Alba to our team as a Director, Peer Knowledge Exchange. Ms. Alba will play a leading role in facilitation of existing NeuGroups, including the Global Cash and Banking Group, and also help us to develop new peer groups going forward. She will also serve as a contributor to agenda development across all our meetings, NeuGroup Research, the NeuGroup Exchange online member community and our International Treasurer publication.

Ms. Alba brings with her substantial practical treasury and banking experience and, as a former member of our Global Cash and Banking Group, she knows firsthand the value we offer finance practitioners with leading peer knowledge exchange.   

Prior to joining The NeuGroup, Ms. Alba was responsible for managing global cash for EMC Corporation as Director of Global Treasury Operations. She was also responsible for EMC’s overall banking and liquidity management, including overseeing the company’s approximately $10 billion in cash, integration of new acquisitions, management reporting, business controls and global cash forecasting. Before joining EMC in 2003, Ms. Alba was a Cash Management Sales Officer for Fleet Bank and a Senior International Private Banking Analyst at Bank of Boston covering South America.

Ms. Alba is an active member of the Association for Financial Professionals and a Certified Treasury Professional. She has also has served as a board member for the National Society of Hispanic MBAs. Ms. Alba holds an MBA from Cambridge College and a BS degree in accounting from the University of Massachusetts.

Blog entry
By jneu, January 31, 2013

Along with members of our Latin American Treasury Managers' Peer Group (LATMPG), we want to thank HSBC for sponsoring last week's meeting in Miami. HSBC's Senior FX Strategist Maya Hernandez set up member discussion well with her presentation on the two economic speeds of the region and what differentiates the runners from the walkers. Contributions from her colleagues, starting with tips on ways to shift money out of markets that look more like walkers, or worse, were also always timely. Plus, insight into using SWIFT in Latin America  to better bridge global and local banks used in region fits the bank relationship realities faced by most MNC treasuries and best practices shared by members.

Of course, we appreciate our member contributions very much also;  in particular, the framework with which to monitor developments in Venezuela, given the uncertainty surrounding its political leadership. Thanks to all who helped make this meeting a success.

Blog entry
By afriberg, January 18, 2013

We are pleased to announce that Deutsche Bank and FiREapps will co-sponsor our 4th Biennial NeuGroup FX Summit with both our FX Managers’ Peer Groups (FXMPGs) in New York on March 19-21. Agenda planning for the meeting has begun, and topics ranging from the latest on Dodd-Frank’s impact on derivatives use in hedging to FX trading execution and the next-stage of evolution in eFX platforms to decision making surrounding earnings hedging are being considered. 

Deutsche Bank, which has been a frequent supporter of other NeuGroups, is sponsoring our FX groups for the first time. As the recognized Number 1 Foreign Exchange provider, we are very pleased to have them in the mix here.

FiREapps returns as a meeting sponsor to our FXMPGs, and is thus very well known to our members as a leader in FX exposure management, enabling them to better identify, analyze and manage FX risk using fact-based collaboration and avoid FX-related earnings surprises.

Each of our NeuGroups for MNC Foreign Exchange Managers meet twice per year, as do most of our groups, but they also come together for a joint summit day every other year, to accompany a meeting with their own group. This enables members to meet more of their peers in the NeuGroup Network, while maintaining the ability to share in-depth with the members of their own distinctive groups that they have come to know and trust.

For more information about membership or sponsorship of the FXMPGs, please contact afriberg@neugroup.com.

Blog entry
By afriberg, January 09, 2013

The NeuGroup's Latin American Treasury Managers’ Peer Group is gearing up for a day and a half of lively discussion this month at its Winter Meeting in Miami, hosted by PepsiCo International, and sponsored by HSBC.

 A recap of 2012 treasury accomplishments and 2013 challenges from each member will introduce the meeting, which will then proceed to cover topics ranging from the finer points of Latin American banking structures to the ever-changing business environments in Venezuela and Argentina. 

Our sponsor, HSBC, will outline the 2013 economic outlook for Latin America and give an update on their own strategies, capabilities and service offerings in the region, including structured solutions to support or replace intercompany loans, alternative funding and ways to enhance yields on liquidity.

We will also have an update on members’ supply chain finance initiatives and related technology in a session anchored by a member’s update on initiatives in two areas. The first will focus on using customers’ supply chain finance structures in Brazil to reduce collection times, and the second will focus on integrating an in-house tool with HSBC and SWIFT utilities. There will be further discussion on using SWIFT in LatAm and how to make the best progress with it given limited payment and cash management capabilities in some areas.

The continuing deterioration of the business environments in Venezuela and Argentina, especially the increasingly capricious FX regulations and risk of currency devaluation, will be the subject of another session, and in a members-only discussion, the LATMPG will debate LatAm banking structures and relationships, such as the roles of global, regional and local banks in the region, and the consequences of foreign banks withdrawing. The final session will be an Open Forum for topics not covered more extensively in the meeting agenda.

For more information about the LATMPG, please contact afriberg[at]neugroup.com.

Blog entry
By jneu, January 08, 2013

Although year-end brought a hint of certainty, 2012 saw a continuation of the challenges born of the financial crisis. Here is International Treasurer's list of the Top Ten stories that best described 2012.

Continuing the theme of the last several years, 2012 was a tumultuous 365 days. And International Treasurer had the stories to prove it.

In no particular order, the top story lines depict the on-again, off-again concerns with Europe and the prospect of a Greece or other Eurozone countries exiting the euro; changing dynamics in global treasury organization deemphasizing centralization in the US or Europe to help focus support on business in growth areas of the world; continued trouble in developing economies that hinders their ability to take up the slack for slower growth in the US and Europe; the changing nature of credit and counterparty risk assessment as post-crisis responses have become part of the new every day; the rapid change taking place in banking and the impacts on bank relationship management; and, finally, the growing impact to be felt from fiscal imbalances plaguing public sector institutions, while so many private-sector corporations have been hoarding cash.

See iTreasurer.com for the full list of top ten stories here.

Blog entry
By jneu, December 31, 2012

On behalf of everyone at The NeuGroup, I extend our best wishes for a prosperous 2013.  With these new year's greetings, I also want to share some highlights from 2012 and previews for 2013.

NeuGroup launches. The NeuGroup Network added its 15th group, the Assistant Treasurers' Group of Thirty, with the support of Citi in September. The AT30 proved to be long overdue in filling a gap in our offerings for AT-level professionals and is already near capacity (we may need an AT30-2). We also continue our push in Asia with a successful test meeting of MNC treasury professionals in Shanghai (hosted by our advisory board member, Rob Vettoretti with PwC). This effort complements the Asia Treasurers' Peer Group we launched last year in Singapore for regional MNC treasurers.  

Next up, T30-3 and a NeuGroup Treasurers' Summit. Expanding our treasurer-level offerings, we have a pilot meeting for a third Treasurers' Group of Thirty (T30-3) coming up in the first half of 2013 sponsored by Standard Chartered. The T30-3 enables us to serve an even broader cross-section of corporates ranging from larger mid-caps to mega-caps. With six treasurer-level groups, we are also excited to begin plans for a NeuGroup Treasurers' Summit in 2014 (stay tuned).

The NeuGroup Exchange. In the second half of the year, we introduced NeuGroup members to our new web platform at neugroup.com. It includes several new community elements for members to interact in between meetings and provides us tools to further collaboration in preparation for meetings, post additional content relevant to agenda topics and distribute benchmarking data. Members can look to the NeuGroup Exchange to further enhance the value of their membership. In addition, we continue to offer our trusted insight via International Treasurer and updates via our twitter streams (see @iTreasurer and @neugroup).

There are now over 300 members in the NeuGroup Network. Finally, we are proud to have recently surpassed the 300-member mark, representing over 180 organizations. We are truly privileged to have the trust of so many world-class professionals who allow us to lead them in peer knowledge exchange.

To all of our members who make this network special, our International Treasurer readers and the service providers who support our unique brand of professional collaboration, thank you!

Blog entry
By jneu, December 20, 2012

The Wall Street Journal reported yesterday that Blackrock and Federated are prepping for large inflows of cash fleeing bank deposit accounts that no longer enjoy an unlimited FDIC guarantee in the new year. The implications range from further depressing yields on cash investments to funds barring new entrants.

If the influx is large enough, BlackRock and Federated have told investors, some money-market funds could be closed to new entrants, said people familiar with the conversations.

In October, we asked members of our Tech20 Treasurers' Peer Group what their plans would be if the unlimited FDIC guaranteed was not renewed, with the added context that money market reforms might make traditional money funds less enticing. Their response indicated a split opinion:

  • 42 percent would leave deposits where they are, given that they had already filtered deposit banks for counterparty risk and bank risk generally has declined, but
  • 32 percent indicated that they would shift some deposits to "safer" banks
  • 42 percent indicated they would move funds into other assets, including self-assembled money fund equivalents (a popular alternative for cash-rich tech companies with sophisticated investment acumen)
  • 32 percent, however, also indicated they would shift some funds to traditional MMFs.

These results may give some color to how the top end of the roughly 1.7 trillion in bank deposits will flow. If money funds don't accept new money, then the percentages for leaving deposits where they are or shifting them to "safer" banks will increase, but it will also inrease the percentage that shift funds into other assets, including bespoke and self-assembled money fund equivalents. Some say this last result is the intent of MMF reform, and it would appear that closing funds to new entrants merely supports the intended outcome.

How will these developments affect your plans?