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

Blog entry
By thoward, September 21, 2016

There will be plenty to discuss at The NeuGroup’s Internal Auditors’ Peer Group (IAPG) meeting in late October. That’s because the auditor’s universe is expanding as it takes on consulting roles, deals with an ever-growing list of compliance roles and does more with less.

The IAPG will meet October 27-28, 2016 at SunPower Corporation in San Jose, California. Topics for discussion will include:

• Audit reporting for the audit committee. Creating an all-encompassing document for the AC has always been a challenge, because sometimes it’s up to the auditor to figure out what is and what isn’t a “must-see” for the committee. Auditors, who often only have a few minutes in front of the AC, don’t want to bog down the proceedings by getting into too much unnecessary detail. At the same time, it is incumbent upon them to not leave something out that poses a threat to the company. Members will compare reports to see who has the best method.

• Compliance blob that ate up IA. Post financial crisis, rule makers of every stripe – government, corporate and bank – have seemingly worked overtime to regulate corporations and how they conduct business. So the question members will be contemplating is how do companies coordinate and manage all their global compliance requirements? On a secondary level, who owns this activity in the company?

• The lean meme. Several members have undergone company structure changes over the past several years, including via M&A or spinoffs. This has resulted in IAs that are, at best, remaining the same size (as their purview has increased) or, at worst, shrinking as budgets demand. How can IAs best operate in this environment? Is it through better technology, changing audit structure or enlisting audit-like parts of the company, i.e., ERM, compliance or legal, to help monitor the company?

Members will also discuss cyber security; “pop” audits and whether companies do them anymore; and how to differentiate between auditing and consulting. This is a gray area for many auditors. When a business unit asks for help in a certain area or process, when does IA don or doff its auditing hat? Do auditors treat issues like an auditor (which would mean a score, a report and a remediation plan) or a consultant?

For more than two decades, The NeuGroup has been a trusted thought leader and respected advocate for global finance and treasury professionals. The NeuGroup leads the way in peer knowledge exchange through its flagship publication, iTreasurer, and The NeuGroup Network, which includes 18 invitation-only groups serving more than 400 treasury and finance professionals across functions, industries and global regions. Visit NeuGroup.com for more information.

0
Blog entry
By wchan, September 19, 2016

The Asia Treasurers’ Peer Group (ATPG) will gather for its H2 meeting in October to discuss the expanded treasury role and how to be recognized as a full partner.

In the past, a successful treasury department was one that remained invisible, often relegated to a support function with “back-office” status. In this hidden role it protected the company’s financial resources rather than create value. Meanwhile, everyone else in the organization was focused on tasks of acquisition, business growth and development. Today, with treasury now a much larger player in a company’s business planning, and where being a “value-adding” entity has become more paramount, treasury teams are under immense pressure to demonstrate the value they provide to the business, while simultaneously reducing costs and increasing transparency with enhanced controls.

ATPG members will share their experiences with bringing value to their company and business units beyond the traditional space of treasury work-scope. Balancing strategic responsibilities can be particularly tough considering Asia’s market complexities, which include ever-changing regulations. The tax regime in Asia is also complex, which further complicates business environments. Day One will feature a roundtable discussion on recent regulatory and tax updates and approaches to tackling these challenges.

In exploring the role of treasury, the group must also consider the line between treasury and finance. There is a need for treasury and finance teams to work together, yet there are differences in their responsibilities. Members will discuss where their respective companies draw the line and how to have harmonious collaboration between the two.

For more than two decades, The NeuGroup has been a trusted thought leader and respected advocate for global finance and treasury professionals. The NeuGroup leads the way in peer knowledge exchange through its flagship publication, iTreasurer, and The NeuGroup Network, which includes 18 invitation-only groups serving more than 400 treasury and finance professionals across functions, industries and global regions. Visit NeuGroup.com for more information.

0
Blog entry
By jneu, September 16, 2016
Blockchain will not just recede back to the “dark web” soon, as I tried to convince my expert panel.
 
The panelists for a debate I moderated this week at the Cash and Liquidity Optimization USA conference in New York provided some valuable insight on blockchain that I wanted to share. First, they agree with the key findings of the recent World Economic Forum (WEF) paper, The future of financial infrastructure, An ambitious look at how blockchain can reshape financial services, including that blockchain, or distributed ledger technology (DLT) will be world changing. Despite my best efforts to spark debate by taking contrary positions, including my suggestion that blockchain will stay more popular with denizens of the dark web than with public company treasurers, all the panelists remained bullish on the burgeoning technology and agreed with the key takeaways below: 
 
• Blockchain is a friend to corporates by bringing efficiency, risk reduction and innovation.
• Of the major use cases, while payments may be the biggest, trade finance/supply chain finance solutions may come be adopted sooner, to be followed by identity management and even collateral management.
2017 to 2020 is when blockchain offerings will start to be realized, nothing tangible will happen this year or next. 
• Banks (and shadow banks) will be needed to make blockchain solutions work, since they will remain the principal low-cost sources of capital. 
• To overcome banks’ tendency to issue press releases over rolling out real solutions, corporates are to be encouraged to press them for blockchain-enabled products and services.
• Whether they press banks or not, the efficiencies to be won from blockchain/DLT, plus the competitive dynamics of VC and bank-backed FinTech companies, will see banks introducing DLT on the back end of services where they make sense. As a result, unless you press the point, you as corporates may end up benefiting from DLT without even knowing it.
 
The panel changed my view that payments is the gateway opportunity for FinTech firms using blockchain. Their argument is that payments already work pretty well on the rails that they currently travel on and banks have the trust factor and ability to make clients whole when or if systems fail. Getting all the players on board to make a blockchain-based payment platform viable will take time. This is consistent with this WEF finding:
 
• The most impactful DLT applications will require deep collaboration between incumbents, innovators and regulators, adding complexity and delaying implementation.
 
NeuGroup members seem to agree with the panel with regard to payments. Asked recently how likely they were to move to FinTech firms to replace banks for their payments business, the vast majority of our Global Cash and Banking Group (71%) said it is not likely. 


 

Among the reasons cited for not moving away from banks was the “wallet” provided by payment processing that offsets banks’ credit support.  
 
This then brings us to the last takeaway regarding how blockchain/DLT might get implemented behind the scenes, and as part of a mix of new financial technologies. This too is consistent with the WEF finding:
 
• DLT is not a panacea; instead it should be viewed as one of many technologies that will form the foundation of next-generation financial services infrastructure.
 
Given that a key driver for banks will be the simplicity and efficiency benefits, along with better compliance-related processes, it also will be a big part of their cost reduction and margin protection efforts. Treasurers that strive to understand in detail the profitability of their relationship to their banks should therefore monitor all technology being implemented by their banks, including DLT, and try to assess the impact this will have on the cost of delivery and margin over time. This is about the only negative for corporates the panel was willing to admit to regarding Blockchain: It will allow banks to provide superior service in some areas at a lower cost to the bank. As a result, this may enable some banks to keep or even raise pricing to improve margins to offset losses from regulation and lower-for-longer rates across other lines of business. But this is easy to describe as a win-win, as well. And this is especially the case, given the reluctance on the part of the majority of corporate treasury professionals to move wallet away from banks that provide them with credit support. 
 
Meanwhile, the disappointing news is that world-changing technology solutions enabled by DLT are still a few years away. And it may be a few years more before you even realize it is there. By then, you as corporate treasurers might not even care what sort of game-changing technology banks have invested in to support you. Just like so many critics of the iPhone 7, we want more than significant improvements on amazing and we want it today.

 
About the panelists
 
• Zaki Manian is a software developer, applied cryptography researcher and co-founder of Skuchain. Skuchain is using blockchain as a mechanism for more efficient control in supply-chain finance, from investment flows to inventory management for trading companies. 
 Dr. Patrick Deegan is the founder of DAC Technologies, a leading consultancy and design firm focused on decentralized and autonomous systems.  He also serves on the leadership team of ID2020, whose mission is to provide legal digital identities for all by 2020.
• Bob Stark is VP of Strategy for Kyriba, a leading cloud-based treasury technology provider, and has 18 years’ experience in treasury technology, working for many of the best known technology providers in the industry. At Kyriba, Bob is responsible for global product strategy and market development, and works with clients, partners, and industry influencers to ensure Kyriba is at the forefront of treasury technology.
 
0
Blog entry
By aorwick, September 13, 2016
Anne Friberg, senior peer group leader of The NeuGroup’s European Treasurers’ Peer Group, will return to the EuroFinance conference on International Treasury & Cash Management to  lend her expertise to two FX panel discussions on October 12-13 in Vienna, Austria. 
 
On Day 1 of the conference, Ms. Friberg will moderate a double session entitled “FX Markets at the Tipping Point,” focused on the impact the changing structure of the FX market has on end-users. Panelists will discuss how their trading and hedging operations have been affected and how they are dodging bullets in today’s increasingly volatile environment. The panel is part of Stream 2 – a series of special-format sessions exploring “Treasury Tear Downs.” 
 
FX is a good starting point for companies that want to experiment with non-bank providers. And with new companies gaining ground and providing innovative services, it is a good time to explore their offerings and how they see the sector developing. Ms. Friberg will discuss these ideas as part of “FX in Action,” an interactive panel taking place in the Treasury Lab on Day 2.  
 
Joining Ms. Friberg on the two panels will be representatives from Citrix, Fluor Corporation, Kantox, TouchFX and other leading companies. 
 
For more on FX markets, read Anne’s blog here
 
 
 
0
Blog entry
By thoward, September 12, 2016
Navigating treasury technology, corporate banking and career are the topics covered in the September issue of iTreasurer. Also in this issue is a summary of the first-half meeting of The NeuGroup’s Assistant Treasurers’ Group of Thirty (AT30) as well as discussion of MMFs and FX hedge strategies.
 
Starting on page one we delve into one aspect of what goes into a world-class treasury management system. The consensus is that having that person who knows the “languages” of both treasury and tech can go a long toward helping support the smooth running of the technology. Add to this a team of experts versed in the broader mission of how technology supports the treasury function. At Cargill, whose process is featured in the story, this is in the form of a “Center of Expertise.” This COE “creates, delivers, and sustains value by honoring existing processes, focusing on global needs, ensuring clear and defined roles, and maintaining a base level of treasury knowledge.”
 
On page 6 we explore how money continues to flow out of money market funds ahead of the October implementation of Securities and Exchange Commission rules. “Fund providers have been aggressively marketing that these changes will make MMFs better but people are realizing this isn’t true,” said Brandon Semilof, managing director at StoneCastle Cash Management. However, global money market products provider ICD, argues that widening spreads between prime funds and treasury and government funds means prime funds will actually be more attractive and bring money back to the beleaguered assets post-implementation.
 
On pages 12-13, in “The Changing Landscape of Corporate Banking,” Joseph Neu discusses how the current environment of regs and low interest rates is putting stress on corporate-bank relations. What’s interesting is corporates are either not aware of the situation or are putting things off until new rules come into play. However, writes Mr. Neu, that companies aren’t putting a high priority on corporate bank relationships “may not last… however, as the trends impacting corporate banks start to bite.”
 
In “Cracking the Career-Path Conundrum” on page 14, contributor John Hintze delves into how treasuries face the challenge of keeping talent engaged and, more importantly, in treasury. So the question is do you further those executives’ career paths and dissuade them from seeking that next step forward at another compelling function within the company or worse, a competitor?,” writes Mr. Hintze. One answer could be special projects, according to Tim Hird, Robert Half Management Resources. He says there is opportunity for organizations “to identify special projects and initiatives that they’re running, and encourage people to work outside their technical areas on those projects.”
 
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
Blog entry
By brichardson, September 08, 2016
The Treasurers’ Group of Thirty (T30) is rolling out a new feature this fall, offering two separate meetings – both sponsored by Chatham Financial – to accommodate members’ increasingly busy schedules. 
 
Members can choose to attend a one-day meeting in New York this October or a one-and-a-half day meeting in Kennett Square, Pennsylvania, in November. Each meeting will begin with sessions on what to expect from Brexit and how Section 385 has the potential to impair pooling structures and intercompany lending – two key tools in the treasury toolbox. 
 
With significant shifts in economic policies around the globe and increased volatility in what seems like all markets, FX remains a front-burner item. Most, if not all members, have exposure to many currencies and have implemented very complex programs to manage them. The Chatham team will lead an in-depth session on advanced hedging strategies, approaches to viewing exposures and optimal mitigation strategies.
 
The NeuGroup will go on to lead members through the highlights of its cross-group research survey on FTEs and compensation to aid members in assessing their organization structure and budgeting plans. Other topics of discussion include how to have a material impact on key corporate initiatives and how satisfied members are with their treasury management systems. 
 
For more than two decades, The NeuGroup has been a trusted thought leader and respected advocate for global finance and treasury professionals. The NeuGroup leads the way in peer knowledge exchange through its flagship publication, iTreasurer, and The NeuGroup Network, which includes 18 invitation-only groups serving more than 400 treasury and finance professionals across functions, industries and global regions. Visit NeuGroup.com for more information.
 
0
Blog entry
By bshegog, September 06, 2016
The Treasury Investment Managers’ Peer Group (TIMPG) will meet during an active fall, with a backdrop of possible fed rate hikes, Brexit fallout and the potential for market dislocation resulting from the implementation of the SEC’s money market fund reform. 
 
The TIMPG comes together October 18-19, 2016 in Santa Clara, California, for a meeting sponsored by Credit Suisse Asset Management. Topics of discussion will include:
 
• Where did the cash go? The long-anticipated SEC money market fund reforms will be implemented this October. A recent survey of treasurers indicates that only 7% plan to stay in prime money market funds after the changes. TIMPG members will look at how money market fund investors reacted to the October 2016 implementation of the new reforms and the vehicles corporations are using for liquidity instead of prime funds. This fall will be a critical time to be on top of how regulations will impact liquidity in the market. 
 
• What credit concerns lurk out there? The credit component of most members’ investment portfolios is sizable. What should members be concerned about? Should they consider expanding the investment policy to increase yield in the portfolio? What are the risks in this market segment?  We will also compare and contrast how members perform credit risk analysis internally versus relying on external managers, and discuss how they measure risk in the credit portfolio. 
 
• Best-in-class technology. In this session, the group will consider the current set of tools and technologies that are helping drive business forward. Members will share with each other their best use of scarce technology dollars. What tools can they simply not live without and what systems have had the biggest impact on their day to day business? 
 
For more than two decades, The NeuGroup has been a trusted thought leader and respected advocate for global finance and treasury professionals. The NeuGroup leads the way in peer knowledge exchange through its flagship publication, iTreasurer, and The NeuGroup Network, which includes 17 invitation-only groups serving more than 400 treasury and finance professionals across functions, industries and global regions. Visit NeuGroup.com for more information.
 
0
Blog entry
By jneu, September 02, 2016
The Treasurers’ Group of Mega-Caps (tMega) will hold its H2 meeting on September 28 in Seattle, Washington. Unique to the agenda is a discussion about what to do if off-shore cash were to become untrapped (from a US MNC perspective). 
 
The “why” of this session is partly about the need for contingency planning for this positive scenario to be part of ongoing reviews of global liquidity structures prompted by BEPS (plus related initiatives like EU state aid) and proposed rule changes under Section 385 — another topic on the agenda. 
 
There are also many adverse scenarios that need to be considered as a result of these prompts, so it probably pays to balance these out with planning for an upside scenario of repatriation without substantial tax penalty (e.g., under US tax reform) or scenarios where markets generating substantial cash suddenly lift all capital controls (e.g., China). This conversation may also serve as an interesting reality check on how far out treasurers are now willing to bucket off-shore cash in search of yield given their perceived risk of being caught out by an unforeseen tax change, especially one with a limited-duration window to repatriate with tax preferences. 
 
Accordingly, another reason for this session is to consider whether a new US Administration in 2017 will lead to international tax reform in some form — with an outcome that beats leaving cash off-shore and at risk to be targeted by foreign tax authorities.
 
The NeuGroup’s tMega was launched this year to help treasurers of mega-cap corporations learn from one another and gain confidence in their course of action. If you are a mega-cap corporate treasurer and would like more information on the exchange of insight between peers that leads to actions that create greater value, please click hereFor more than two decades, The NeuGroup has been a trusted thought leader and respected advocate for global finance and treasury professionals. The NeuGroup leads the way in peer knowledge exchange through its flagship publication, iTreasurer, and The NeuGroup Network, which includes 18 invitation-only groups serving more than 400 treasury and finance professionals across functions, industries and global regions. Visit NeuGroup.com for more information.
 
0
Blog entry
By afriberg, September 02, 2016
With FX risk hovering around the top of the corporate treasury’s list of concerns, does the shape of the market matter to the corporate end users as they transact their hedging activities? 
 
Several factors are fueling a trend in FX markets toward an eventual “all-to-all” (dealer-to-dealer and dealer-to-client) market for FX spot trading. These factors include regulatory risk management and market conduct and transparency requirements for dealers as well as increased automation and migration to electronic trading venues on both the buy-side and the sell-side. 
 
The NeuGroup’s Anne Friberg will moderate a panel of three corporate practitioners from the US, UK and The Netherlands and a financial markets expert at EuroFinance’s 25th annual conference on International Treasury & Cash Management in Vienna, Austria, on October 12-14. The panel will debate whether FX markets are also at a tipping point and, if so, whether changes in the FX markets will benefit corporate market participants. How can they ensure their needs are met in a shifting trading landscape? Themes that the panel will explore include:
 
• Have corporate objectives changed? Striving for world class risk management drives treasury to continuously reevaluate their hedge programs to ensure the goals are achieved at a reasonable cost. Overall goals like reducing earnings volatility and protecting cash flows remain the same, but the key performance metrics could shift in their internal hierarchy to allow optimization. Do earnings trump cash flows? Is the focus quarter-over-quarter or year-over-year?
 
• Are corporates getting a good deal? Customized trade sizes and hedge tenors come at a price, but how much is too much? With increased market transparency and dealing via electronic platforms like FXall, corporates do have a better idea of how much of a markup they are paying, but can they do better? How much improvement comes from execution practices, and how much is a negotiation with bank counterparties?
 
Anne Friberg, facilitator of The NeuGroup’s European Treasurers’ Peer Group, will return to the EuroFinance conference on International Treasury and Cash Management to consider how to combat these challenges and others as she leads a panel discussion on October 12 in Vienna, Austria.  
 
0
Blog entry
By brichardson, September 01, 2016
The Assistant Treasurers’ Group of Thirty (AT30) will tackle the latest disruptions to treasury, including Brexit and Section 385, at its September meeting in New York, sponsored and hosted by Deutsche Bank. 
 
The meeting will kick off with a session on what to expect from Brexit, led by the popular Tom Joyce, managing director and CIB capital markets strategist at Deutsche Bank. While most members would say it’s too early to make any definite Brexit-related plans, Tom will offer some European insight for US corporates to consider, even in the early days.
 
Another hot topic is the current regulations being considered in Washington, referred to as Section 385, that have the potential to severely impair pooling structures and inter-company lending, two key tools in treasury’s liquidity management tool box. In light of intense lobbying, treasurers are becoming more optimistic, but there will likely still be some impact. Many treasurers are waiting for the final version before making any definitive plans. Nonetheless, they are thinking through scenarios carefully. AT30 members will discuss their own views and action plans at the meeting, which will occur around the time the final version of the rules is being released.
 
Despite these bumps in the road, work goes on in treasury operations land. M&A transactions had a record year in 2015, and several members had a part in that. As a result, group members plan to compare notes on their approaches to integrating their targets. 
 
Given that cash and working capital are so closely linked, some treasury groups also have a direct hand, and even some accountability, in how working capital is generated. The group will discuss its role in measuring and managing working capital and what tools treasury can bring to the table.
 
And with treasurers being so active, they must not forget to measure their performances and toot their own horns. The group will review the types of reporting they do, how frequently they report, their audiences and the messages they strive to convey.
 
For more than two decades, The NeuGroup has been a trusted thought leader and respected advocate for global finance and treasury professionals. The NeuGroup leads the way in peer knowledge exchange through its flagship publication, iTreasurer, and The NeuGroup Network, which includes 18 invitation-only groups serving more than 400 treasury and finance professionals across functions, industries and global regions. Visit NeuGroup.com for more information.
0