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

Blog entry
By afriberg, May 03, 2018
Members of the NeuGroup for MNC regional treasury in Europe (EuroTPG) are gearing up for their 2018 first-half meeting hosted by Lantmännen in Stockholm, Sweden, on May 23. Here are some highlights from the agenda:
 
Cash Management Trends and Innovations in Treasury. Technology has become a critical part of treasury. Banks, vendors and infrastructure providers have been pushing the boundaries, now offering tools designed to ease processes, integrate workflows and deliver real-time and accurate data for decision-making. Meanwhile, artificial intelligence (AI) and robotic process automation (RPA) are gaining acceptance. This is transforming cash management activities and vastly improving operational efficiency. We will hear from an expert speaker on this topic, which ranks as a top priority for members. Read more about RPA here.
 
Cybersecurity – Threats, Mitigation and Insurance. Facing an increase in the frequency and complexity of threats as automation and digitalization become the norm, members will discuss cybersecurity, evolving threats and preventive measures they have used. The session will feature a roundtable on what protective strategies members have explored, responses to breaches and their experiences with cyber insurance in Europe.
 
Also on the agenda:
 
“Solve My Problem.” The group will try to collectively address and offer solutions to specific challenges members are facing. These may include, for example: KYC compliance and privacy concerns in the context of the General Data Protection Regulation (GDPR); collections and trapped cash in sanctioned countries; and building a treasury dashboard.
 
US Tax Reform and Implications for EMEA Regional Treasury. Regional treasurers are currently confronting a host of implications stemming from US tax reform. For member discussion, NeuGroup will share a summary of takeaways from our peer group meetings thus far, covering how corporations are best managing issues like dividend and repatriation considerations; cross-border funding implications; onshore and offshore cash going forward; and business-trading and legal-entity structures.
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates more than 30 face-to-face meetings that connect peers, exchange knowledge and distill discussions. These face-to-face interactions, coupled with formal benchmarking, inform actions, transform practices, and enhance careers for the 440 members of the NeuGroup Network. Find out how you can connect at www.Neugroup.com.
 
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Blog entry
By afriberg, May 02, 2018
Members of the NeuGroup for assistant treasurer leaders (ATLG) will gather in Summit, N.J., on May 23-24 for their 2018 H1 Meeting hosted by Celgene and sponsored by Bloomberg. Here are some of the highlights from the meeting agenda:
 
Developing Talent for Treasury and Your Own Advancement. How do you develop treasury talent and keep employees passionate about their work? And how do you successfully move up and into the treasurer’s office yourself? What is the necessary skill set and how do you get it? Led by meeting moderator and former treasurer of Caterpillar, Ed Scott—who will describe his own career journey—members will discuss their challenges, best ideas and successes. Read more about talent management here. 
 
Pension Management Case Study. A member will share her company’s approach to pension asset management in the context of bankruptcy proceedings and life after reorganization, including strategies to de-risk pension liabilities; how pension liabilities affect company valuation; and de-risking in the prioritization hierarchy of capital structure initiatives.
 
Technology and Systems to Future-Proof Treasury. Beyond TMSs, what are the emerging technologies that will transform treasury and deliver on efficiency and automation mandates, as well as enable treasury to make smarter decisions using data that is increasingly available in real time? What part do blockchain, robotic process automation (RPA) and artificial intelligence (AI) play in the future of treasury? Members will weigh in with their opinions and approaches. 
 
Tax Reform, Repatriation and What Comes Next? Members will discuss questions arising from the new US tax regime, including: What are all the implications affecting capital structure, investments, and cash management? What actions are MNCs taking in the short term and what are some longer-term changes they’re making, and why? Will there be wholesale changes on the balance sheets of corporate America?
 
Also on the agenda:
• Best practices in debt capital markets with experts from Bloomberg
• Transition from LIBOR to SOFR
• Hedging FX, rates and commodities
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates more than 30 face-to-face meetings that connect peers, exchange knowledge and distill discussions. These face-to-face interactions, coupled with formal benchmarking, inform actions, transform practices, and enhance careers for the 440 members of the NeuGroup Network. Find out how you can connect at www.Neugroup.com.
 
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Blog entry
By Anonymous, May 01, 2018
Fintech is no longer a disrupter, but a partner to help strengthen new solutions with more integrated propositions.
 
Virtual account structures can add significant value and efficiency in the processing of real-time payments because of the need for instant clearing, availability of funds and account reconciliation. Treasurers will have greater flexibility to design and maintain complex account hierarchies, while maintaining full control of the structure.
 
This spotlight feature explores what you should be focused on NOW to best utilize these new technologies and incorporate them into your overall treasury optimization strategy.
 
 
Read this free report to:
• Learn how to create a virtual account structure for your organization that will allow for real-time processing, increased visibility and greater optimization of your working capital.
• Understand how the rapid increase in the use of APIs will enable both corporate and consumer bank customers to use third-party providers to manage their finances including bill pay, P2P transfers and spending analysis.
 
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.
 
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Blog entry
By thoward, May 01, 2018
The May issue of iTreasurer explores the effort that will be needed to decode the recent tax law changes, as well as how financial companies are racing to embrace technology to help in areas like payments and just about all lines of business. In between we take a look at SWIFT’s partnership with SAP and summarize two panel discussions led by NeuGroup’s Anne Friberg that took place at a recent EuroFinance conference in San Francisco.
 
Starting on page 1, iTreasurer delves into some of the tax provisions that went into effect at the end of last year. While it’s a boon for corporates in the long run, realizing that boon will involve a high degree of brain-racking. That’s because the law isn’t fully formed, and many, many questions remain. As members of NeuGroup’s Treasurers’ Group of Thirty have been told, “only limited guidance [has] been released as of mid-March, mainly concerning MNCs’ repatriation tax” and “regulations to clarify other key provisions probably will not start arriving until summer or fall, at the earliest.” So there is a ways to go before details get ironed out.
 
In “Anticipated Exposures” on pages 4-5, iTreasurer looks at how borrower-friendly covenant-lite loans will help some companies in a downturn; how separately managed accounts are still gaining fans despite new short-term products and a smallish return on money market funds; and why companies need capital-allocation frameworks.
 
On page 6, we look at global financial messaging service SWIFT’s recent announcement that it has reached an agreement with SAP to allow corporate clients of the business-software giant’s S/4HANA ERP offering to directly access the global messaging service’s vast network of banks, without intermediaries or the operational challenges of an in-house solution.
 
May’s peer group meeting summary gives insight into NeuGroup’s FX Managers’ Peer Group “summit” which brought together both the FXMPG and FXMPG2 peer groups. This year’s summit topics included an in-depth look at dashboards, the headaches of trading restricted currencies, the implications of new hedge accounting rules and the effects of US tax reform.
 
On page 11, iTreasurer looks at the continuing détente that is occurring between banks and their up-and-coming friends, fintechs. This is becoming increasingly evident in the payments space as well as in areas such as data, artificial intelligence, open banking, client networks, security, crime prevention and identity protection.
 
“Fintech is really exciting for us,” said Joanne Towers, head of payments product for Europe, global liquidity and cash management at HSBC. “At HSBC, we partner with fintech to allow us to strengthen our solutions with more integrated propositions.”
 
Finally, on page 15, contributor Anne Friberg gives an update on EuroFinance’s recent “Managing International Growth” conference in San Francisco, the target audience for which was fast-growing companies on the West Coast. Ms. Friberg moderated two panels on topics that are important to those fast-growing firms: FX risk management and M&A.
 
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.
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Blog entry
iTreasurer, MMFs
By thoward, April 30, 2018
Gearing up for distribution to shareholders and paying down debt, MNCs keep cash in MMFs.
 
Although US dollar institutional assets in money-market funds have leveled off and decreased somewhat after rising over the past 12 or so months, the erosion of assets under management has slowed. This suggests larger companies are parking cash for use in the future, according to JP Morgan Chase.
 
“Relative to the average over 2013-2017 period cumulative net outflows from USD MMF are running about $50bn less, suggesting more money is staying in MMF, either because yields are higher or because corporates are using the MMF as a half-way house between the fixed income market and future payments to shareholders,” JPM said in a recent note to clients. This could all change by the end of the year, with outflows from prime MMFs picking up as companies get a better handle on the tax implications of bringing home the cash. Read more here.
 
Also this week, Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo is looking to make his agency more deliberative. Gone are the days when the CFTC operated in calamity mode, popping out regulations like donut holes. In releasing his so called “Reg Reform 2.0 Agenda” at the International Swaps and Derivatives Association (ISDA) annual meeting, Chairman Giancarlo said now was the time for a more thoughtful process to devising and implementing new swap rules.
 
“I'm committed to a deliberative process and getting back to regular order at the agency,” Mr. Giancarlo said in an interview at the meeting with former CFTC Commissioner and current ISDA Chairman Scott O’Malia. “We're not in the wake of a crisis right now – we need to take the time to get this right.” Read more here.
 
Finally this week, iTreasurer looks at how the relationship between companies and activists has entered détente. Whereas in the old days activists would make outlandish (and often self-serving) demands of companies and their boards, it’s now become more about collaboration. 
 
This was one takeaway from a recent meeting of NeuGroup’s Assistant Treasurers’ Group of Thirty (AT30). One banker at the meeting who leads his firm’s activist defense team said companies and activists are working together more than ever. Activists have modulated their campaigns, offering advice that companies can more easily agree to. Also, many companies have activist playbooks at the ready or are now just managing their cash better. Companies are also getting help from banks, which now have activist-defense advisories to guide companies in dealing with outspoken shareholders. All of this has mellowed the exchange between company and activist. 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.
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Blog entry
By Anonymous, April 30, 2018
The Assistant Treasurers’ Group of Thirty (AT30) April meeting in New York hosted and sponsored by Deutsche Bank featured valuable exchanges on the consequences of US tax reform, including planned uses of repatriated cash as well as capital structure, current trends in blockchain technology and plenty of details on member projects and priorities. Here’s some of what you missed.
 
This time is different. A Deutsche Bank strategist noted that 2018 is different from any post-recession year so far, with a more hawkish Federal Reserve under Powell and the return of volatility. She said that continuing, synchronized global growth (with tax reform providing a big US boost) might be one of the most underappreciated themes driving markets and earnings, while monetary tightening and the Fed’s liquidity unwind are the most prominent factors. And be prepared: even though Deutsche is still revising global growth forecasts higher, it says fundamentals are past peak, meaning there will be more volatility. 
 
Blockchain and digital technology: hype and hope. A Deutsche Bank expert provided a timely tutuorial on blockchain (more than half of members said in the pre-meeting survey they don’t understand blockchain well). She provided useful insights, saying we are currently in a “hype cycle,” that blockchain is “not a panacea” and cited a study showing that 92% of blockchain projects started in the last three years have flopped. But blockchain is a force treasury must follow because of use cases including improved bond issuance, KYC compliance, supply chain management and trading functions. She expects a central bank to test a blockchain pilot program in the “next couple years.” Read more about the future of fintech here. 
 
Activist campaign activity levels expected to remain elevated in 2018. Deutsche Bank explained to members that activists are going after more companies outside the US, and their campaigns are becoming quieter and more collaborative. They’re also more focused on operations than balance sheet-focused. The presenter noted that capital return activist campaigns have achieved a high level of success. Activists have not yet been knocking on doors to demand return of repatriated cash.  One member noted that, "We're likely to get more questions every quarter on this." Members agreed that the best defense is strong performance and good messaging. 
 
Odds and ends: bank fees and hurdle rates. On fees, the consensus seemed to be that the more M&A your company does, the more leverage treasury has to press banks to lower fees on say, revolvers. One went so far as to say, “I find banks, they’re weak,” and wondered why institutions that always tout relationships with clients “don’t’ act like it’s a relationship” adding “they really need you more than you think.” 
 
On hurdle rates, one members aid using CAPM to calculate WAAC is “broken” but is still used because there are no great alternatives, and that some companies use Ibbotson because it generated higher WAAC levels, not because it’s right. Another said there is no hiding the fact in her company that treasury is using a hurdle rate different than indicated by WAAC. The goal of raising the cost of capital is to discourage deals that aren’t likely to meet the overly-optimistic cash flow assumptions of business units. But one member said rather than using an “artificial premium” to calculate WAAC, his company presses business units to justify or lower their cash-flow projections.    
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates more than 30 face-to-face meetings that connect peers, exchange knowledge and distill discussions. These face-to-face interactions, coupled with formal benchmarking, inform actions, transform practices, and enhance careers for the 440 members of the NeuGroup Network. Find out how you can connect at www.Neugroup.com.
 
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Blog entry
By thoward, April 27, 2018
The Internal Auditors’ Peer Group is gearing up for its first meeting of 2018. Members will delve into a wide range of topics, some somewhat new, like agile audits, and some recurring, like the ongoing of challenge of talent management. 
 
Here is a brief synopsis of some of what will be discussed and questions that will be addressed. 
 
Metrics for Measuring Management and Staff Performance. Auditors sometimes struggle to discern between performance results for directors and managers. How do others measure performance at the director and manager level? How have others created accountability on department-wide objectives?
 
The Talent Conundrum. Employers continue to struggle with attracting and retaining critical-skill and top-performing employees.  According to a range of studies, about of half of companies report challenges attracting critical-skill workers, and even more have problems hiring top-performing employees. Talent management always presents a challenge to internal audit departments, too. What are some successful retention programs? What are some best employee evaluation practices? Read more about talent management here. 
 
Agile Audits. Agile auditing is becoming a popular way for IAs to add value. Using predictive data analytics to focus scope, then using iterative testing and sprints in the field, auditors can respond quickly to any recent changes at the company.
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates more than 30 face-to-face meetings that connect peers, exchange knowledge and distill discussions. These face-to-face interactions, coupled with formal benchmarking, inform actions, transform practices, and enhance careers for the 440 members of the NeuGroup Network. Find out how you can connect at www.Neugroup.com.
 
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Blog entry
By afriberg, April 27, 2018
Treasurers of large-cap companies meeting in mid-April at Starbucks headquarters discussed topics ranging from the top priority of planning for the effects of tax reform to cyber insurance, interest rate risk management and the effects of new technologies on corporate treasury. Perhaps most interesting was the number of treasurers who mentioned treasury training, not only for their staffs but even at the more senior level, including themselves. While there are training courses out there and the CTP and CertICM, there seemed to be a feeling that there are not enough options and that they’re not accessible enough. NeuGroup will help members connect and exchange knowledge on this topic.
 
Here are some of the takeaways from the meeting:
 
Tax Timing. Sponsor US bank covered the timing of paying tax on deemed repatriation, the potential effects on liquidity structures globally, as well as the aspects of other foreign tax regulations such as BEAT, GILTI and FDII. 
 
• The tax on repatriated cash is spread over 8 years and rises over the last 3 years. Years one through five the tax is 8%, year six 15%, year seven 20% and year eight 25%! 
 
• The ultimate effect of tax reform will be a significant deleveraging as debt matures or is even bought down. 
 
• Overall, tax reform is significantly beneficial to US corporations, and will most likely result in benefits longer lasting than people are factoring in today.
 
Cyber Reality. The cyber insurance practice head for Marsh laid out the big picture on cyber risks and then delved into the cyber insurance market. Before that, the treasurer of a large shipping/transportation company described how its European subsidiary was attacked by malicious Russian cyberware. Unfortunately, the business had no cyber insurance.
 
• Most, if not all, companies will be constantly under cyberattacks and cybersecurity can only do so much. Therefore: 
 
• Cyber insurance should be part of your arsenal to address this ever-growing risk.
 
• Why? In 1975 83% of the S&P market value was tangible assets and in 1985 it flipped completely with 84% being in intangible assets.
 
• Also think about the secondary and tertiary effects of a cyberattack. While computer systems might get resume running in 24 to 72 hours, the lingering effects on the underlying integrity of data could be months or longer.
 
• In today’s cyber insurance market, it is possible to get up to $1 billion of coverage with the average policies being written in the $300-$500 million range.

Read more about cyber insurance here. 

 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates more than 30 face-to-face meetings that connect peers, exchange knowledge and distill discussions. These face-to-face interactions, coupled with formal benchmarking, inform actions, transform practices, and enhance careers for the 440 members of the NeuGroup Network. Find out how you can connect at www.Neugroup.com.
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Blog entry
By aorwick, April 26, 2018
Why are today's top treasuries incorporating algorithm trading in their FX programs? NeuGroup counts five reasons you should use FX algorithms right now.
 
Join this live webinar as Ted Howard, NeuGroup Associate Director, sits down with Susan Gammage of Thomson Reuters to discuss the recent explosion in FX algorithms.
 
5 Reasons to Use FX Algorithms Right Now
May 16, 11 a.m. PST/2 p.m. EST
 
During this live event, you will:
 
• Understand how current liquidity models can impact the effectiveness of various algos
• Learn new ways to use algo trading to improve the effectiveness and overall costs of your current FX trading program
• Discover ways to use algos as part of your FX trading strategies to improve trading accuracy and execution speed
 
Register now to participate in this live panel discussion with industry experts and explore ways to use algorithms to ensure the best execution of your FX program.  
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates more than 30 face-to-face meetings that connect peers, exchange knowledge and distill discussions. These face-to-face interactions, coupled with formal benchmarking, inform actions, transform practices, and enhance careers for the 440 members of the NeuGroup Network. Find out how you can connect at www.Neugroup.com.
 
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Blog entry
By Anonymous, April 26, 2018
At the May meeting of the Global Cash and Banking group, first-time meeting sponsor C2FO will link its liberating working capital mission with the global cash management imperatives imposed by US tax reform to help members learn to do more with less excess cash. More offshore cash from US corporates will be available to return to shareholders, be used for M&A, capex or to fund pensions; so more efficiencies will need to come from treasury to maintain an MNC’s working capital and liquidity and to help suppliers do the same. 
 
Smart discounting to fund suppliers, supported by technology, including technology employing machine learning and artificial intelligence, can be part of the tool kit members will need to maintain working capital for their supply chains with more limited liquidity following repatriation of offshore cash. To improve the liquidity available in general, for their own working capital, members will also share tips and tricks to improve cash flow with better collections management. Read more about working capital optimization here.
 
The window to further optimize liquidity and working capital management is short, as NeuGroup member companies indicate they will tend to repatriate cash later this year and next. Nearly half of GCBG pre-meeting survey respondents say they will deploy all repatriated cash within a year and 20% will in the next two years. For global cash managers, the time is now to get a better handle on cash to ensure it is there to repatriate and then sustain supplier-, customer- and distributor finance programs once it has been sent home. 
 
As tax reform gets reconciled with the current US tax code and the tax rules of other jurisdictions, global cash managers will then need to work on a potential restructuring of current global cash and liquidity management plumbing. And for this task, the improvements made to working capital efficiency, from invoice discounting to improved collections, provide a little extra room to maneuver. So no need to wait for the tax department to weigh in on the restructuring plan to get started on an effort to become more efficient with cash.  
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates more than 30 face-to-face meetings that connect peers, exchange knowledge and distill discussions. These face-to-face interactions, coupled with formal benchmarking, inform actions, transform practices, and enhance careers for the 440 members of the NeuGroup Network. Find out how you can connect at www.Neugroup.com.
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