Having spent 22 years at Hunting plc and as group treasurer since 2010, Chris Berris has seen and orchestrated a lot of change. Kevin Cook, CEO of TreasurySpring, sat down with Berris for a fascinating whistle-stop tour of his experience of driving innovation in a FTSE 250 treasury team.
How do you approach driving innovation within the team and the broader organisation?
Primarily, we are trying to detect the themes and trends in the treasury tech space. We want to identify the projects that will require longevity, and not implement a technological solution just for the sake of innovating. Our main focus is implementing technology into specific projects with targeted goals such as risk management, cost alleviation or improved efficiency, and then to integrate processes and platforms into our treasury management system (TMS) – the overarching aim is always to do more with less!
Have you seen a change in the firm’s attitude to the adoption of technology over the past 12 years?
Absolutely! Technology is now approached with a more open mind across all levels of the organisation, and we are having conversations all the time as to whether tech can help on particular projects before deciding if there is scope to invest.
How do you position those innovation projects to maximise your chances of achieving buy-in from the wider firm?
It is very important to ensure that we are implementing a project that is focusing on a specific need – we must have a clear idea of where our starting point and end game is. I try to ensure that every project is pitched in a way that is universally understandable and which sets out how it brings value to treasury, but also how it might bring value to other areas of the business. Taking this broader approach helps to create greater firm-wide buy-in and ultimately unlocks the budget to invest.
How do you decide what technology you want to roll out in the future?
It is a combination of predetermined plans as well as staying up to date with how our technology is evolving, and taking opportunity when we see it. A great example of this is our TMS, which is constantly developing new functionality and modules, which we embrace and embed into our system infrastructure on a regular basis. We recently implemented a company payments netting solution to help reduce intercompany transaction costs and provide greater visibility on intercompany account balances.
A lot has changed for all of us over the past 18 months; what reactive changes have you had to make in response to COVID-19?
Luckily, our whole systems environment at Hunting has been overhauled relatively recently, meaning that business continuity in a remote environment was never an issue. In terms of process and procedure, we have had to adapt some of our simpler processes, such as installing electronic signatures and implementing digital approvals to authorise money movements.
On a bigger picture basis, the pandemic encouraged us to think more carefully about credit risk both in our supply chain and on our excess cash balances, which led to the implementation of Credit Benchmark and TreasurySpring.
What drove you to revisit your cash investment and credit policies?
We are a cash-positive business and actively manage excess cash. I decided to completely overhaul our investment policy last year and that was then rapidly accelerated due to the risks that were beginning to rise in relation to the pandemic. We moved away from MMFs and sought alternative investments in order to minimise risk on our access liquidity.
How have you updated your thinking on credit risks?
Historically, we relied on the credit rating agency views, but decided that we wanted a more dynamic perspective on risk in the financial services sector, within our supply chain and our customer base. I was initially made aware of Credit Benchmark by the team at TreasurySpring, and then I saw the work that they were doing with HM Treasury to validate credit data in the context of the Covid Corporate Financing Facility. Today, our investment policy incorporates Credit Benchmark data and uses it in varied ways across the business.
What made you onboard with TreasurySpring?
We are generally long cash, which we historically invested in bank deposits and MMFs. The combination of yields contracting and the structural liquidity risks in MMFs coming to the fore again in March 2020 encouraged us to look for alternative options.
It quickly became clear that the TreasurySpring platform provided access to a much more diverse range of options through a single onboarding across currencies and maturities from one week to one year. In particular, we had always believed that the repo market was a tool reserved for much larger treasury teams. TreasurySpring’s solution offered us simple transparent access to collateralised bank risk, opening up a previously inaccessible option that helped us to reduce and diversify risk. This was one of the strongest selling points for the Investment Committee.
The diversification and better positioning from a credit standpoint, while adding some return in a low-yielding environment, was a win-win situation.
Do you value having an ‘escape route’ to place your cash in government assets if you feel the need to go fully ‘risk-off’?
Certainly, that is very helpful and it is great that we can now instantly get access to the government offerings. Knowing that we can quickly switch to a government strategy if we feel the need is very comforting.
How do you feel about the idea of placing cash with large corporations in addition to banks?
I think that there is a big opportunity here in the future. On a risk/return basis, the large corporates that are issuing on the TreasurySpring platform offer great risk-adjusted returns compared to some of the financial institutions that we lend to, showing that there is real scope to expand into that area over time.
What is on the agenda for the remainder of 2021?
We are currently looking at layering in some artificial intelligence (AI) into our cash-forecasting capabilities, enhancing our order-to-cash efficiencies and working on an implementation of our new enterprise resource planning platform.
The aim is to log in to our TMS in the morning and get a true, real-time, dynamic view of our cash position around the world and then use AI and automation to help manage all of the treasury processes stemming from that, whether those be payments, cash investment or FX management.
Chris Berris is group treasurer at Hunting plc
Kevin Cook is CEO of TreasurySpring