There has been widespread coverage of a recent hack on the Oracle network, which supports a host of cloud-based, business software applications. This is symptomatic of something that all corporate treasurers should be aware of, which is cybercrime. We are the people who control the cash in our businesses, and without that cash, businesses could fail.
We must ensure that we keep up to date with all of the changes and developments that are happening in our field from an IT perspective. We must also check that our financial and banking partners are doing the same, so that we can be confident we’re working with people who are taking cybersecurity as seriously as us. It’s not just about what we’re doing with our own treasury management systems and processes. It’s about what our suppliers and customers are doing, too.
From a macroeconomic perspective, there’s a lot of noise at present suggesting that the world is turning a corner in its recovery from the great recession, and is starting to grow again – although warnings indicate that this will only last for about five years. That said, a benign climate certainly provides treasurers with the scope to review their funding positions and ask: “Is this potentially an opportunity for us to make changes to our overall funding portfolios?”
On the infrastructure side, I recently attended a Bank of England meeting about their real-time gross settlement (RTGS) initiative. The Bank is looking at whether it’s going to open up the scheme to other payment service providers – and potentially, therefore, to the field’s biggest players – so that may have a significant effect on CHAPS, which falls under the RTGS umbrella. Such decisions will influence not just a treasury’s own activities, but what our banks do, too.
On a related note, I think that corporates could take greater advantage of the challenger banks. Treasurers may not be able to use them on mainstream tasks. But if there’s a particular, specialist area with which they require assistance – or if they require a targeted stream of support for some new business – then I think treasurers should be open to challengers’ input, rather than sticking to the mainstream services they’re used to.
And, of course, Brexit is going to be very important this year for any treasurer who is based in Europe. In terms of how we make plans – or ensure that we have the correct banking relationships and IT support in place – there are no specific tasks that we must carry out in the run-up to Brexit that differ from what we normally do. But our vigilance must increase. Treasurers must start to look at, for example, their cross-European bank accounts and cash pooling, and evaluate whether those arrangements will survive the terms of the final deal, as the details take shape.
With all those points in mind, keeping up to date with The Treasurer and what the ACT technical team is saying will be of enormous value.
Treasurers’ profiles had quite a boost during the earlier part of the latest recession, because the crisis awakened boards to the importance of effective cash and risk management. So perhaps there’s a risk that, as we move into a more benign environment, the board and senior finance directors may say, “Oh well, things aren’t so difficult now”, and they won’t give those issues the same emphasis. But I think that, having awakened people’s interest, it’s now incumbent upon us to remind boards of how potentially detrimental the risks are that we continue to face.
My sense is that treasurers are producing more in their board reports than is actually being read. But that doesn’t mean that our analysis should be any less thorough – in fact, it is key to winning support.
However, given that our emphasis in recent years has been very much on cash management, it may now be time for treasurers to refresh their outlooks and reprioritise things that haven’t been at the top of their agenda. One area that would be well worth exploring is the feasibility of implementing some of the newer methods in the trade finance arena.
I know that the blockchain sessions at last year’s ACT annual conference were very well attended. So treasurers may want to work with boards to ensure that their organisations are making full and effective use of blockchain applications that have emerged for trade finance.
See also the ACT policy and technical team's blog of planning for 2018