Sibos 2017: treasurers look to tech to untangle knots

Sibos 2017: treasurers look to tech to untangle knots

Untangling the “knots” at global treasuries, especially with regard to bank maintenance issues around know your customer (KYC) and other compliance activities, was the theme of a corporate treasury session yesterday (18 October) at Sibos.

“I have eight full-time people and an army of lawyers working on KYC and other compliance demands. Bank maintenance is a pain,” said Joseph Vasen, assistant treasurer and group treasury manager, Microsoft. “I see technology as a possible help in the future, especially distributed ledger technology [DLT] as it has notarisation capabilities. But it will require partnerships with banks, corporates, financial technology firms and regulators.”

For Guy Ingram, former treasury development head at the brewers InBev and now a consultant, “actually having long-promised electronic bank account management (Ebam) capabilities would be nice”, adding that things were still too manual and “couriers get far too much business out of us.”

Technology would appear to be the means by which to untangle the knots treasurers face therefore, which was handy as Dr Ailish Campbell, assistant deputy minister and chief trade commissioner for the Canadian Government, gave a short overview of the country’s fintech sector.

“There are more than 3,000 fintech companies in Canada, with hubs here in Toronto, in Vancouver, Calgary and Montreal, attracting $1 billion of investment since 2010,” she said. She encouraged delegates to visit the Mars discovery district in Toronto and the University of Waterloo in Ontario, out of which BlackBerry grew.

A live poll during the session confirmed the reliance on technology to solve corporates’ problems. Asked what event or changes have had the biggest impact on corporate treasuries during the past year, 31% said new technology, such as artificial intelligence (AI) and distributed ledger.

Uncertainty about the UK’s exit from the European Union, and payment fraud and cyber security were each cited by 25% of the audience. Other changes included the election of Donald Trump as US president (13%) and the entry of new competitive fintechs (6%). No one cited the rising interest rate environment or market and foreign exchange volatility.

The new technology that was of most interest to the corporate treasurers on the panel, and the bank representatives from BNP Paribas and Bank of America Merrill Lynch (BAML), was AI.

According to Microsoft’s Vasen, his firm is already using AI for balance sheet hedging and cash forecasting. “Shortly we will be looking at a project for intercompany flows, so that cash is where it needs to be,” he said.

Suresh Subramanian, head of trade and treasury solutions Americas at BNP Paribas said: “AI is important, especially the robotic automation element for a bank. But I think DLT and various other technologies will be important too.”

That is why technology was the top finding of the live Sibos 2017 poll, although it was surprising to see an interest rate rise or FX volatility not on the list of corporate treasury priorities, suggesting there were perhaps more bankers in the room than treasurers.

Paul Taylor, global head of corporate sales, Emea global transaction services at BAML, said: “Data is the key thing. The way we mine, manipulate, store and use it to aid automation and service is the prize. AI is one part of that, but there are other useful technologies too.”

Separately, over in the Standards Forum there was another corporate treasury focused session on digitalisation and the need for standards to enable it, but unfortunately the BAML and CIBC representatives were lacking a treasurer to debate with. Jane Miller, a consultant who used to work in Ford Motor Company’s treasury for 30 years, gamely stood in.

“The next advance in treasury technology should be foundational,” she said, meaning that it should integrate payments with cash visibility, securities transactions with compliance, and so on. Data can then flow freely across organisations in the financial and physical supply chain, including banks and corporates.

This nirvana requires standards, however, and as Benoit Desserre, head of global transaction banking at Société Générale, candidly admitted “we’re in a competitive industry where you’re going to keep what advantages you can, while also recognising the need to collaborate where possible to aid clients”.

That is the crux of standards right there, but collaboration is necessary to enable true end to end digitalisation of corporate treasury practices.

The Sibos session moderator, Marc Delbaere, head of corporates and supply chain, Swift, pointed to some “successful projects” where collaboration is happening, such as its global payments innovation (gpi) project and in trade finance.

By Neil Ainger, reporter, Daily News at Sibos

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