This year’s ACT Middle East Treasury Summit, 16-17 October in Dubai, will be your definitive technical update showcasing real treasury transformation case studies from senior leaders who have positioned their team as valuable, influential partners to the business.
Here's the latest Q&A with three of our conference speakers!
How do you think treasury has evolved over the previous 10 years?
It has undoubtedly become a more strategic role, being seen as a key member of the CFO’s senior team and often presenting directly to the Board. This has been driven by two things:
i. the financial crisis of 2008 and its aftermath and shockwaves have concentrated the minds of companies on financial risk; and
ii. the greater reason is that through a combination of high quality of people in the profession and rigorous, relevant training and education which hugely enhances that quality, treasurers are seen to have not only financial knowledge but also commercial, business knowledge and acumen. We are stepping out of the shadows of being deemed merely experts in a field, to being rounded senior managers.
Can you give an example of how you have transformed your treasury role or team?
In my previous role I reported directly to the CEO along with the Finance Director – the CEO saw no reason to require a CFO and saw that I, as a treasurer, could deliver the strategic financing and financial management required. Further, having the practical skills I was seen as not only being able to devise a strategy but implement it – a major advantage. The role has leapt forward over the many years of my career.
What do you think ‘the next big trend’ for treasury will be?
To drag finance functions and their thinking and mindset out of the 19th century into something approaching at least the latter 20th century. Increasingly we will become the Deputy CFO.
How do you think treasury has evolved over the previous 10 years?
I should say that corporate treasury teams have been elevated to a more senior position since the 2008 financial crisis. However, the treasurer’s various goals and objectives require that he/she places themselves as a strategic partner in the organisation by defining their own vision and strategy statements.
Can you give an example of how you have transformed your treasury role or team?
I have been working for almost 6 years in the Group - I’m the Head of Treasury of Yıldırım Group. There are 15 people in treasury team and I put different functions under the treasury main umbrella which are supportive functions such as trade finance and credit risk management.
What do you think ‘the next big trend’ for treasury will be?
The next big trend will be blockchain - the treasury blockchain will be the new standard!
How do you think treasury has evolved over the previous 10 years?
The corporate treasurer has established a seat at the executive management table, helping grow and manage the business - especially as the region which has struggled with peaks and troughs leading to more need for focus on liquidity management. Banking regulation has impacted corporate treasury with more detailed KYC requirements to be adhered to in order to continue doing business. From a technology standpoint, the direction is to become more automated and less resource-intensive however technology developments have not always aligned with business drivers and objectives - meaning corporate treasuries have stayed away from cutting edge technology leading to slower adoption overall. I appreciate the fact that banks have driven innovation in the past and corporates have utilised it, but the adoption rate could be improved with a much closer collaboration between the corporate and the bank to help prioritise market “needs” vs market “wants” or “good-to-haves”.
Can you give an example of how you have transformed your treasury role or team?
One of the aspects my department focused on was working with the banks to harmonise the annual KYC process with multiple banks. We noticed a lot of time was being wasted in answering to KYC questionnaires – from the corporate side pretty much the same questions were being answered to all banks. We have instead agreed to produce an annual disclosure statement answering all the questions in one go which is then shared with the banks. This area requires more collaboration and is a good use case to implement blockchain technology on.
The other aspect I can share is how a focused systems, policy and procedures and corporate treasury PMO function was established, led by myself, within our organisation which helped drive transformation with a focused project governance model. In the past, it was assumed that operational treasury colleagues could also run strategic projects, but this meant there was a compromise elsewhere. A focused approach with a dedicated function looking after project management has helped us drive corporate treasury up the maturity model over the last three years.
What do you think ‘the next big trend’ for treasury will be?
In my view, we will start seeing practical use cases coming to life for blockchain technology applicable to treasury and banking. It will move away from a buzzword to real-world applications in trade finance, KYC and instant payments. Any kind of authentication required in the transactional side of the business will start relying on the blockchain. I foresee banks working closely with FinTechs to drive quicker solutions in this space. The banks who have approached innovation without involving FinTechs would struggle in bringing their solutions to market quicker and hence will lose the advantage to other banks who have collaborated with FinTechs. An agile approach is required in this space - finding the right balance between being too cautious versus being a maverick. Over-regulation is a threat though.
The other trend I see is banks leveraging on the treasure chest of customer data and driving business intelligence through it. This “big data” use case is waiting to be brought to reality and reach tipping point. There is so much insight that can be derived from this data that banks sit on. It is natural progression to let regulation, such as GDPR, mature and then within that paradigm allow for utilisation of customer insights from payments / data transfer sitting with the banks and with consent from the customers be able to drive trends through it. I see banks creating revenue streams or enhanced value-add services through 'consulting' and 'thought leadership' from this valuable data available to corporate treasuries as their clients.
