Does technology offer a lifeline to corporate treasurers flying blind?
Today’s treasury landscape is developing rapidly, with new technological innovation changing the role of the corporate treasurer. Martin Bellin explains the data-gathering challenges treasury managers face, and how new technology is improving workflows in this interview with World Finance filmed at the London Stock Exchange Studios in August 2015.
World Finance: Today’s treasury landscape is developing rapidly; especially with new technological innovation changing the traditional approach and the role of corporate treasurer is evolving as result.
With me now is Martin Bellin of BELLIN a leading web-based treasury software company. Well Martin let’s start with how the treasury landscape is evolving and the challenges it faces.
Martin Bellin: If you take a look back in time for a while, then you will see that treasury has become the centre of financial operations in many corporations now. In the former past it was more an extra to accounting and things like that, so it was not recognised as a very important topic.
Nowadays, treasury has become in the middle, and it’s getting more and more important for corporations. They became a department, they became a body in the corporate finance and it is going to raise attention in the meantime. Especially because treasury is not concerned about certain legal entities and divisions, they are concerned about groups, groups of companies.
So they are tearing down the walls between the different divisions and different departments and different legal entities by taking a look at global corporations and the global view. And that exactly, enables global business, and corporations are taking a closer look at global business more and more often and more and more intensively.
World Finance: And how does BELLIN fit into this?
Martin Bellin: When I started this company, I actually had that in mind already, so my idea, my problem actually at that time was, to build an environment, which could enable me to control the whole group of companies. To control not just my financing and my treasury business and my central treasury but around the whole operation – this couldn’t be fulfilled with any instruments available because it’s technology driven.
Technology is required to collect all the information in a global scale. So I developed and tried to develop – at least at the very beginning – I tried to develop a system environment, which enables me to get hold of all the data on the global level.
Now by having the data available at my fingertips, I am able to manage now, exactly what I am supposed to manage: the global financial impact, the global financial risk of my corporation.
World Finance: Treasurers are spending more and more time now on risk management, capital liquidity management and business strategy – what needs is this prompting and how do you approach this?
Martin Bellin: If you go back you’ll find a survey which has been made by Gardner and published by Gardner and I figured out, a couple of years ago, that 75 percent of the time of an average treasurer is spent on data collection.
Now imagine: none of these treasures have on their business cards a title ‘treasury data collector’ – they are all called treasury manager.
Now in the meantime, we do have systems available, which are helping me to collect all the data from the different subsidiaries together in one spot. Now if I can spend the time, which I have spent before on data collection, on management; I can exactly do what I am supposed to do; manage my risk, my liquidity, my positions, and what I am supposed to manage.
World Finance: And how is increased regulation impacting the industry?
Martin Bellin: Well treasurers are not accustomed to regulation because there was no regulation, actually, for corporate treasures in the past. Accountants are very used to regulation. Now as treasurers become more and more affected by regulations, we all know about Dodd Frank, about EMIR, which are affecting treasury business.
My concern is that corporations are starting to avoid or to change their risk management in a way that they are weakening their risk – because they do not want to follow the regulations, they cannot comply with the regulations. So there are coming more regulations in the future, we are all sure of that, because the financial industry is requiring regulation for different reasons, we all know about that. So and this is going to affect corporate treasurers as well. Now this is going to affect corporate treasurers that have to comply with regulations.
How do I comply with regulations? By implementing proper technology – which helps me to get rid of data collection again to build the reports, which are required and to do all these things, which are now regulated. We have to get used to that in corporate treasury as well, and we have to implement the systems, which are going to help me to comply with them.
World Finance: Looking at treasuries now from a global perspective and how important is it that they are connected?
Martin Bellin: Business is all about information, the more you know, the easier the business is. Just imagine a pilot – I flew in this morning to London, imagine the pilot wouldn’t have any instruments, wouldn’t have any sight were he is flying to, or a captain sailing the seas. If he would have no idea where he is going to go, then he will be in trouble very easily. Now that applies to treasury as well.
If the treasurer doesn’t have all the information at hand to manage the corporation – how could they? Now the question is, how does technology impact the future of treasury? I need systems, I need information – I need all the real-time information at hand to really do what I am supposed to do – to manage my risk for the corporation; for the benefit of the corporation.
World Finance: And finally, how do you see the industry evolving over the coming years and what trends you see impacting it?
Martin Bellin: Well, there are different trends I will say. First of all there are corporations, which have a professional treasury in place right now, so they reconsider their existing set up. They have the ability now to consolidate their existing landscape. They have implemented payment systems, risk management systems, planning systems, all these kind of things. Now there are systems available which can put all the things together in one, that’s one trend.
Another trend is that more and more corporations are going to come aware that treasury is really a core part of their financial set up – and they are just starting to implement and to run a treasury department at a professional level. That is the most important impact and the change in the future, because there are still too many companies that do not consider treasury a part of their financial set up.
And third, we do have a possibility now to increase our abilities in treasury – what does that mean? If you want to have a global set up in treasury you have to run global payments. That means you have to have one platform in place, which enables you to process all the payments from any subsidiary in the world through this one platform. Now this communication exists, more and more companies are implementing exactly this bank independent payment hub.
Now by having this payment hub available, you have the ability to communicate to banks in a professional level. Having this in same place, enables you to do much more than just payment processing – enables you to do deals conforming through finance dealings, and all kind of other deal types, that now can be processed through the same channels. So there is a bright future just in front of the professional treasuries to increase automation, SDP and efficiency in their operations, through the whole operation and whole corporation.
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