Bunq Unveils its own AI Money Assistant
Bunq, a prominent European Neobank, has partnered with Mastercard to innovate in open banking by introducing a new generative AI platform named Finn. This move marks Bunq as the first AI-powered bank in Europe, showcasing its commitment to leveraging advanced technologies for enhanced user experiences. To learn more about Bunq AI Finn, check [HERE]. Recommended Reading Key Features of Finn 1. Generative AI Integration Finn replaces the traditional search function within the Bunq app, offering users a chat-style interface where they can ask questions about their finances. This integration allows for more personalized and efficient management of financial activities. 2. Advanced Query Handling Users can inquire about detailed aspects of their spending and savings. For example, Finn can answer questions such as “What is the average amount I spend on groceries per month?” or “How much did I spend on Amazon this year?” It can also provide contextual answers, such as identifying a specific restaurant visit or the amount spent at a particular location on a given day. 3. User-Centric Approach The platform is designed to enhance user convenience, allowing them to manage their finances seamlessly. According to Bunq’s founder and CEO, Ali Niknam, the goal is to make banking more intuitive and aligned with users’ lifestyles through the use of cutting-edge AI technology. Impact on Bunq’s Growth The introduction of Finn is part of Bunq’s broader strategy to expand and innovate. Neobank has seen significant growth, now boasting 11 million users across Europe. Since July 2023, user deposits have increased by 55%, reaching 7 billion euros. This growth is attributed in part to the successful integration of AI, which has helped Bunq attract and retain a larger user base. Additional Features and Services 1. Free Credit Cards Bunq now offers free credit cards that can be set up in just five minutes and used immediately through Apple Pay or Google Pay. This service aims to provide greater financial flexibility and convenience for users. 2. Tap to Pay Leveraging Apple’s Tap to Pay technology, Bunq allows business users to turn their iPhones into payment terminals, facilitating on-the-go payment acceptance. This feature is available to all Bunq users at no extra cost, further enhancing the app’s functionality. Strategic Significance The partnership with Mastercard and the launch of Finn underscore Bunq’s ambition to redefine banking through technology. By focusing on AI-driven solutions, Bunq aims to set a new standard in the neobanking sector, emphasizing user-centric innovation and international expansion. This strategic move aligns Bunq with tech giants like Google and Amazon, which are also at the forefront of AI development. In summary, Bunq’s introduction of the Finn AI platform in partnership with Mastercard represents a significant advancement in open banking, highlighting the bank’s commitment to innovation, user convenience, and rapid growth in the European market. Insights from Treasury Experts We thought it would be valuable to get perspectives from a Treasury professionals, Royston DaCosta and Sebastian Muller Bosse, who is also a Treasury masterminds board members Q: What do you think of this, Royston and Sebastian? What does this mean for the future of banks/banking? Royston Da Costa, Assistant Treasurer at Ferguson PLC, Comments Excellent innovation-this will be the future for at least retail banking! There is still the caveat, in my mind, that AI is not perfect yet and all data/answers must be vetted or handled with some care. Of course, the game changer is when corporations are able to take advantage of this functionality. I believe “Finn’s” advanced query handling functionality is already available with some FinTech/Banks but I agree with the idea that it should be more widely available. A great way for the app to be user-centric is it could for example, analyse your monthly spend and automatically invest your surplus cash for the days its not required, to maximise the interest you earn on your cash balances? It makes sense (that Finn is part of Bunq’s broader strategy to expand and innovate), although caution should still be applied, i.e., we would not wish to experience a repeat of SVB, i.e., ensure you invest up to the limit covered by the Central Bank and diversify your investments with multiple counterparties. Bunq’s free credit card offering sounds great but is this too good to be true, i.e., what sort of limits are offered and/or is everyone really eligible? Although, its Tap to Pay technology is not farfetched, because it has become the standard method of payment for the current generation! Bunq’s partnership with Mastercard and the launch of Finn underscore its ambition to redefine banking through technology but Bunq does not have the financial power that Google and Amazon hold! In conclusion, I believe Bunq’s AI money assistant is a positive step and will enhance value for consumers (and hopefully for corporations soon). Banks/banking will have to seriously ratchet up their game if they wish to keep up with this innovation! It is interesting to me that I am seeing a two tier race developing, i.e., Fintechs/Banks investing and developing technology that is ‘future proofed’ vs. mainly banks that either refuse or are not willing to invest in technology and WILL lose customers as a result. Furthermore, the banks that are not willing to upgrade their technology will find it increasingly difficult to adapt to new regulations as they arise. Sebastian Muller Bosse, Manager Administration & Operations at Finance & Treasury Services GmBH, Comments The feature to look at your overall spending, search for specific transactions , and transactions being automatically categorized by a banking app isn’t necessarily new to retail customers. The ability to ask questions directly rather than just looking at default graphs, exporting data and making own calculations is of course a much more convenient way and will ease the use of adoption (especially for the older generations!). For innovators and early adopters these AI features will likely be a reason to try it out and to expect these kind of features in future. For the late majority and laggards it could feel more like…
Franklin
The Allure and Pitfalls of Natural Hedging
This article was written by HedgeFlows As finance managers, directors and business owners tap-dance their way around the whims of the international currency market, the term ‘natural hedging’ serenades as a harmonious solution for currency management. It’s appealing, it’s suave, and it puts up a dazzling front of cost-savings—yet, as we slip behind the curtains, we unveil the unnoticed missteps that could cost the finale. Understand Natural Hedging Natural hedging is an intriguing dance with foreign exchange (FX). It’s the art of planning your business’s currency inflows and outflows—namely payables and receivables —to counterbalance each other within the same currency bracket. In an ideal situation, this would eliminate the need for currency conversion completely, leaving you immune to currency fluctuations. Effective natural hedging involves two primary steps like a well-choreographed step dance routine. The Appeal The promise of natural hedging is a siren’s call—reduce transactional costs, evade conversion fees, and sidestep the volatile tango of the Forex market. Who wouldn’t be seduced by the prospect of skirting hefty hedging contracts or options, all while seemingly cutting down the currency risk? Three Missteps to Avoid 1. Holding Currency Balances: Working Capital Lock-In The first misstep in natural hedging is the lock-in of capital. It’s a subtle yet critical aspect often overlooked in the initial glow of potential cost savings. Due to the inherent unpredictability of business operations, cash flows can rarely be perfectly matched. You might receive payment in a foreign currency today, but your corresponding expenses in the same currency might not be due until the next month or even later. This discrepancy requires you to hold onto the foreign currency balance, effectively locking in your working capital. This phenomenon can restrict your liquidity and limit your capacity to quickly respond to other financial needs or investment opportunities. 2. Asking Suppliers to Change Invoicing Currency: A Hidden Cost The second misstep in natural hedging involves supplier invoicing. It may seem convenient to ask your foreign supplier to invoice in your local currency, eliminating the need for you to deal with currency exchange. However, this approach often comes with a hidden cost. While it’s true that you won’t have to worry about conversion rates and fees, your supplier will. To cover their risk and any currency conversion fees they incur, suppliers often embed a 2-3% currency exchange fee, or mark-up, into their invoicing. This additional cost is subtly woven into your payable amount, effectively increasing your expenses without your express knowledge. So, while it might seem like you’re simplifying your accounting, you’re actually paying more in the long run. 3. Matching Uncertain Cashflows: The Unseen Risk The third misstep in natural hedging is trying to match highly predictable cashflows with speculative cashflows. This approach seems tactical in theory, but it can backfire with serious repercussions. Let’s consider a scenario: your business has a probable inflow in a foreign currency from a dependable client, and you plan an outflow in the same currency, contingent on a speculative deal yet to be finalized. If all goes according to plan, these cashflows offset each other, and you’ve successfully implemented a natural hedge. However, should the speculative deal fall through, your business is left holding the foreign currency from the inflow, exposing you to the unpredictable swings of the currency market. Not only does this situation strain your company’s financials, but it also undermines the primary objective of natural hedging—for protection against currency risk. Hence, while matching cashflows, it’s critical to ascertain the certainty of both inflows and outflows to reduce potential exposure to currency risk. Alternative Steps One cannot ignore the allure of natural hedging, but it’s worth considering raised eyebrows at the simplistic beauty of this method. As an alternative routine, small steps like low-cost prebooking guaranteed FX for specific foreign invoices can equip businesses with the agility to maneuver through the FX market’s highs and lows, much like a planned adagio in a high-stakes ballet performance. Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.
SWIFT AI in Fraud Check
In today’s fast-paced digital economy, payment fraud has emerged as a significant threat, prompting financial institutions to seek advanced solutions. SWIFT, a global provider of secure financial messaging services, is leveraging artificial intelligence (AI) to combat this growing menace effectively. Recommended Reading The Evolution of Fraud Detection Traditional fraud detection systems rely heavily on rule-based mechanisms, which, while effective to a degree, are often reactive and limited in scope. These systems flag anomalies based on predefined patterns, but as fraudsters become more sophisticated, they find ways to circumvent these rules. This is where AI steps in, offering a proactive and adaptive approach to fraud detection. How AI Transforms Fraud Detection AI, particularly machine learning (ML), excels at analyzing vast amounts of data and identifying patterns that are not easily discernible by humans. By deploying AI, SWIFT can monitor transactions in real-time, scrutinizing each for signs of fraud based on a multitude of factors and historical data. This dynamic analysis allows for the detection of novel fraud tactics that traditional methods might miss. Real-World Applications SWIFT has integrated AI into its portfolio through various initiatives. For instance, the Payment Controls service, powered by AI, helps financial institutions detect and prevent high-risk payments. This service continuously learns from new data, enhancing its ability to flag suspicious transactions. Moreover, SWIFT’s AI-driven fraud detection tools are designed to be interoperable with existing systems, ensuring a seamless transition for financial institutions. This integration helps banks and payment processors maintain robust security without overhauling their infrastructure. The Benefits of AI in Fraud Detection The adoption of AI in combating payment fraud brings numerous advantages: 1. Enhanced Accuracy: AI reduces false positives by learning and adapting to legitimate transaction patterns, allowing for more precise fraud detection. 2. Real-Time Analysis: AI’s ability to process and analyze data in real time ensures that suspicious activities are flagged and addressed promptly, minimizing potential damage. 3. Scalability: AI systems can handle increasing volumes of transactions without compromising performance, making them ideal for the growing digital economy. 4. Adaptive Learning: As fraud tactics evolve, AI systems continually learn and adapt, maintaining their effectiveness over time. Looking Ahead As financial transactions continue to migrate online, the threat landscape will undoubtedly evolve. SWIFT’s commitment to harnessing AI underscores the importance of innovation in maintaining the integrity and security of global financial systems. By staying ahead of fraudsters with advanced technologies, SWIFT not only protects financial institutions but also fosters trust and reliability in the digital economy. In conclusion, AI’s role in combating payment fraud is not just a technological advancement but a necessary evolution in the fight against increasingly sophisticated fraud tactics. With SWIFT leading the charge, the financial industry is better equipped to protect itself and its customers from the ever-present threat of fraud. For more insights into SWIFT’s initiatives and their impact on the financial industry, you can visit [HERE] Insights from Treasury Experts We thought it would be valuable to get perspectives from Treasury professionals James Kelly and Patrick Kunz, who are also Treasury Mastermind Board members. Q: What is your take on this? Is this an improvement? Or will this lead to more false-positives? Will there be an increased workload at financial institutions? James Kelly, Senior Vice President of Treasury at Pearson, Comments This potentially offers an additional level of protection for corporates. Most banks already offer some form of AI fraud oversight backed up by checks with customers about whether payments and receipts are genuine, which helps train the model, so this just adds extra validation. What will be interesting is whether the banks and swift work together and share information on whether suspected frauds are genuine or not, as historically we haven’t always seen groups working together in this way. As fraudsters get more creative and we see more deep fakes, the need for proper checks about who payments are going to and coming from become ever more important, especially as many frauds involve some form of settlement instruction substitution. I’ll be interested to see what SWIFT offers additionally in this space. Patrick Kunz, CEO of Pecunia Treasury and Finance B.V., Comments This is long overdue in my opinion. The current process of banks doing fraud checks is too rigorous leading to many false positives. Also the rules are not always clear, some banks follow sanctions list while others interpret sanction list even with variations in names leading to even more false positives. This leads to extra workload and information sharing from corporates to banks and extra blocked funds. Also it is not always clear what information from a GDPR perspective may be shared with banks. One bank told me once that sanction law overrules GDPR, seemed highly questionable to me. I really hope this solution is going to help unite the banks and use a uniform approach to fraud checking in payments. It sounds promising that the steps can also be more automated. In practice i do fear the implementation of this will take months or even years as some banks might be slow to adopt this, if they even will. Bottom line, corporate treasurers should rely on their own checks to prevent frauds, both on the outgoing side as well as on the incoming side (to prevent fines). Join our Treasury Community Treasury Mastermind is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.
The 7 ways to recognize phishing and avoid it
This article is written by Trustpair Cybercriminals currently use emails to attack their targets (businesses or individuals). The sender deceives his recipient through the forms of email, which makes believe in a professional email from a bank, a legitimate organization, or a government agency. The cybercriminal asks the recipient to click on a link redirecting to a page, to which he will confirm his data and personal information, and the trick will be done. This technique, called « phishing », consists in extracting information or data from your account in order to defraud you. Once the hackers have them, they can create new identifiers on your account or get your sensitive information by installing malware. So, how do you identify phishing attacks? To answer this question, we will show you the various clues that can help you determine the fraudulent nature of emails coming from cybercriminals. Cybercriminals currently use emails to attack their targets (businesses or individuals). The sender deceives his recipient through the forms of email, which makes believe in a professional email from a bank, a legitimate organization, or a government agency. The cybercriminal asks the recipient to click on a link redirecting to a page, to which he will confirm his data and personal information, and the trick will be done. This technique, called « phishing », consists in extracting information or data from your account in order to defraud you. Once the hackers have them, they can create new identifiers on your account or get your sensitive information by installing malware. How to Identify a Phishing Attack So, how do you identify phishing attacks? To answer this question, we will show you the various clues that can help you determine the fraudulent nature of emails coming from cybercriminals. 1. Phishing emails are usually misspelled The first way to recognize a scam email is to check the quality of its spelling. A reliable professional mailbox rarely sends emails containing bad grammar or spelling, unlike crooks who are not organized enough for these small details. It is therefore easier to distinguish between a typo from a real sender and an error made by a scammer. In fact, scammers use translation tools or spell checkers to write their message, and these tools can give them the right words, but they don’t necessarily fit in the right context. 2. A reliable company does not ask you for sensitive information by email When an institution asks you by email to provide sensitive information via a link or attachment, there is a good chance that it is a phishing scam. Indeed, a legitimate company will not ask you to share information about your bank details, your passwords, your tax numbers, etc. on the internet. This is an unsecured method that requires a lot of vigilance. 3. A trusted company calls you by your name A company that collaborates and processes important information with you will not use generic messages in emails, such as “Dear account holder..” , etc. In principle, the company will call you by your name in the email and ask you to call them back by phone or to come directly to their headquarters for example. This last point is important because there are emails that look perfect and some scammers know the name of their target, so it will be an additional way to ensure the reliability of the email. 4. A reliable company does not require you to access its website Sometimes a phishing email is coded as a hyperlink to access the sender’s website. However, clicking (accidentally or not) on the email and landing on a web page will download spam to your computer or expose you to a vulnerability to hacking. 5. Phishing emails usually contain illegitimate and strange links An email from a company may sometimes contain a hyperlink to another page. How do you recognize phishing emails in this case? The first thing to do is check your URL! The link may well tell you that it will direct you to such a page, but it may lead you to a site that is trapped. You must therefore ensure that the URL displayed is consistent with that displayed when you hover over the link with the mouse cursor (without clicking it). If the links are different, chances are you will be directed to a site you do not want to visit. Don’t trust a hyperlink that you don’t know or that doesn’t seem to fit the context of the email. Also, you can increase your vigilance by checking that the proposed link starts with https://. 6. Email creates a sense of urgency Scammers know that the longer you wait to respond, the more you will notice inconsistencies or things that don’t seem reliable. For example, you may find that the email address is not your usual contact, or that you learn that your contact has not sent you an email, etc. For an example of a sense of urgency, the scammer can impersonate the company’s boss and send an urgent request to an employee. Indeed, he knows that the employee will immediately execute his orders, which is why it is always essential to check the address of the sender and the content of the email. 7. Fake invoices : one of the main risk for your finance team There are multiple red flags a finance team should be on the lookout for when receiving an email containing an invoice. Any request for PII (personal identifiable information), unusual request or amount are the main warning signs. But as scamming and phishing become more advanced, scammers will use techniques to ensure that they are successful. Illegitimate and suspicious links should be avoided at all cost. Some companies have reported that phishing emails contained hidden links. Unfortunately, even trusted sources should be viewed as potential phishing sites. Scammers will create almost identical emails to fool your team into believing that the email is coming from a usual vendor. Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning…
Interconnected Markets and Cash Flow Hedging Agility
This article is written by GPS Capital Markets Each morning, as I walk through the GPS headquarters in Salt Lake City, breaking news plays on flat screens lining the area where account executives and other members of the GPS team work. Whether it’s a natural disaster, international conflict, or trade agreement, being in an FX company will make you believe that a butterfly flapping its wings in South America could really cause a storm in the northern hemisphere. Breaking news flashing across screens can start a domino effect, with account executives checking reports, looking up currency movements, or getting on the phone to talk to cash flow hedging and other clients who might be impacted by events. When I was a college and graduate student studying cultural anthropology, every spring I applied for grants that would help me do fieldwork abroad. With a longtime love of cross-cultural exchange and the growing possibilities of big data, I started focusing on what’s called Network and Complex Systems Theory, which uses mass data gathering and visualization techniques to study underlying patterns in different systems, which could be economic, as we’re focused on at GPS; ecological; social; and more. Besides studying interconnected data points, just traveling between my home in Utah and Europe provided me with a fascination for the way trends spread and impact events in (sometimes) predictable ways. Today, it’s exciting to work in a field where I see the contemporary world’s interconnected nature daily—like having a finger on the pulse of a complex network of investing and divesting, growth and absorption. Seeing the proactivity and how detail-oriented the multi-person teams supporting our clients are also inspires me. Especially during the past year, unforeseen conflicts and shifting trade agreements (see All Eyes on the Peso by Michael Buck) create ripples and test GPS’ ability to predict and respond on the dot when market disruptions occur. While nobody has a crystal ball, cash flow hedging can anticipate and obviate losses. Examples of how businesses increase agility with cash flow hedging For companies of any size, foreign exchange exposure can increase operating costs, cause cash flow and balance sheet discrepancies, or increase anxiety about the value of assets and liabilities. To better understand how GPS teams assess cash flow exposure and provide agile solutions as events occur, the following provides specific examples of scenarios that required quick pivots of cash flows due to war, subsidiary closure, and more. Many examples show how GPS clients utilize hedging advice when unforeseen events take place and can illustrate the benefits of person-to-person collaboration that takes place in cash flow hedging programs. How cash flow hedging works When companies set up cash flow hedging processes, forecasting cash flows starts 12 months in advance. This process allows business to lock in better rates, providing certainty about the actual cost of expenses and liabilities. When a business implements a cash flow hedge, the use of a hedging instrument (a derivative) locks in the amount of a future cash inflow or outflow before market volatility hits. Cash flow hedge accounting then connects the income statement of a hedging instrument and a hedged transaction, offsetting the predicted changes in cash flow. Matching cash flows to offset losses due to currency market volatility, the change in the value of the derivative designated as a cash flow hedge will be reported as a component of other comprehensive income (OCI) and then reclassified into earnings in the timeframe when a forecasted sale or debt happens. Different types of cash flow hedging strategies There are three main types of strategies to offset forecasted cash flow issues: static, rolling, and layered. Common cash flow hedging strategies: The benefits of dedicated customer service while hedging cash flows The above examples show that conducting international business comes with multiple opportunities and challenges that many treasury departments struggle to manage if they are relying on individual banks. Yes, GPS beats bank rates and saves clients millions, but more importantly, advisors provide 24/7 attention to each client, getting to know their business needs and anxieties inside-out. Working in tandem with real experts in the FX space, clients get to engage in granular business development conversations on an ad hoc basis. If you find out that a supplier or payee in a subsidiary goes out of business, GPS will be there to give recommendations for finding new contracts, shifting resources to other markets, or simply implementing different hedging strategies. If a war or international trade relationship shifts, GPS uses its large bank of data and its experts’ decades of experience to create plans to offset losses or win new contracts across unaffected markets. Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. 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Are You Developing Skills That Won’t Be Automated?
The article “Are You Developing Skills That Won’t Be Automated?” from the Harvard Business Review explores the future of work and the increasing impact of automation on various job roles. According to recent studies, a significant portion of U.S. jobs are at risk of being automated, particularly those involving repetitive and routine tasks, such as truck driving and warehouse stocking. Recommended Reading The article argues that rather than focusing solely on which jobs will be automated, it is crucial to identify which aspects of jobs will remain the domain of humans. Key areas where human skills are irreplaceable include emotional intelligence and contextual understanding. For instance, while machine learning can diagnose illnesses more effectively than humans, the emotional support a physician provides to a patient’s family remains uniquely human. Similarly, bartenders engage in social interactions that go beyond merely mixing drinks, showcasing the importance of human connection and empathy. Emotion and context are highlighted as two critical components that machines struggle to replicate. Emotion influences human communication, prioritization, and decision-making processes. Context, which is dynamic and ever-changing, allows humans to adapt to new information and circumstances in ways that machines cannot. These abilities contribute to skills such as critical thinking, creative problem-solving, effective communication, adaptive learning, and sound judgment—skills that are highly valued by employers across industries. The article emphasizes the need for educational systems to focus on developing these non-automatable skills. This includes fostering abilities like clear communication, complex problem-solving, and adaptive learning, which are difficult for machines to emulate and are essential for maintaining a competitive edge in the workforce. In conclusion, while automation poses a threat to many jobs, developing skills that harness human emotional intelligence and contextual adaptability can ensure continued relevance and success in an increasingly automated world. We thought it would be valuable to get perspectives from Treasury professionals Alexander Ilkun and Jessica Oku, who are also Treasury Mastermind Board members. Q: What tasks and skills does the treasurer need to avoid his tasks being automated away. That is, what makes a human treasurer unique compared to a robot treasurer. Or will we eventually only need bots in treasury? Jessica Oku, Director of Fund Development at Women’s Health Coalition Canada, Comments To stay relevant as a treasury professional, you will have to develop skills that cannot be automated like interpersonal skills, critical thinking and adaptability. These will help you solve problems creatively and effectively manage unexpected challenges. These unexpected challenges are what might limit AI’s capabilities as it is basically pre-programmed to handle known issues or tasks. In the same vein, stakeholders management and collaboration cannot be automated. Hence, it is important for treasury professionals to continue developing skills that facilitates collaboration and emotional intelligence (EI) is an important element here. Organizations serve different types of stakeholders (internal & external), who have interests that need to be met for its continual survival. One context I would give can be during a financial crisis, such as a sudden market downturn that causes significant volatility, a treasury professional must quickly analyze the impact on the organization’s cash flow, investment portfolio, and debt obligations. By applying critical thinking, you can develop strategic responses, such as reallocating resources, renegotiating terms with creditors, or adjusting investment strategies. Adaptability allows you to implement these changes swiftly and effectively to avoid negative impact on your organization. Alexander Ilkun, Founder of ClearBox SIA, Comments There was an interesting research that has shown that chatbots having conversations with patients were actually seen as being more compassionate than human doctors. In the healthcare industry where human doctors are extremely overworked and need to treat as many patients as possible that is understandable. However, the future isn’t replacing human doctors with bots based on this evidence. I believe the future is to embed AI in the working routine of doctors, so that AI can help them quickly interpret the data that they’re seeing, leaving time and emotional resources for having a conversation with the patient. Even if the bot is able to have a compassionate conversation, it is important how it will be perceived by the individual patient. Human beings are social creatures and a conversation with a robot, no matter how compassionate, will be seen as a fake and will not fill the social need. I believe the same can be related to Treasury space as well as Treasury teams are typically lean and are asked to perform more tasks with less or the same quantity of resources. Emotional intelligence is critically important for Treasury functions. We often find ourselves in a project management position, since were the last ones moving cash. Be it M&A, cash repatriation, dividends to external shareholders or issuing and servicing debt, the focus is very often on the last step – cash moving which is strictly in the Treasury domain. However, so many things need to happen beforehand that typically takes place behind the scenes. I found that it is typically the Treasury team that is bringing all of the functions together to achieve the common end result. With this kind of setup it is crucial that Treasury teams not only possess the technical skills to do their job but also the emotional intelligence skills – communication skills, building buy-in, conflict resolution, achievement orientation, understanding your own emotions and those of others’. All of these are emotional intelligence skills that define how successful the individual and the team is going to be. Robots will not replace human interaction and these are the skills we need to continuously work on.It would be a good place to draw a parallel to the EuroFinance topic we discussed with Patrick in Barcelona last year as it touched on this specific area. There is a lot of debate about creativity of machines in that they can’t create anything new. While it is technically true, there is a saying that “everything new is very well forgotten old.” I believe it is underestimated to what extent machines are able to come up with ‘new’ things…
Excel Shortcuts for Finance Pros
This article is written by: Automation Boutique In treasury and finance, where every second counts, mastering Excel can be a superpower. We’ve all felt the pressure of looming deadlines and the endless sea of data analysis, financial modeling, and report generation. It’s in these moments that we find ourselves thinking, “There’s got to be a faster way.” And there is. Excel shortcuts are the fastest way to transform tedious tasks into swift actions. Today, let’s explore some of these shortcuts, all gleaned from our cleverly designed mouse mat that does more than just support your wrist. Editing with Speed and Precision Formatting Made Easy Navigate Like a Pro Audit with Confidence Insert/Delete Without a Hitch Formulas and Functions: The Heart of Excel For those of us navigating the complexities of finance and treasury, these shortcuts can boost productivity and efficiency. Integrating these shortcuts into your daily routine can transform your Excel tasks, shifting focus from manual data entry to strategic analysis and decision-making. Now, take a moment and think: Which shortcut is going to be your new favorite? Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information Notice: JavaScript is required for this content.
CNBC article discusses the growing concerns about the United States
The CNBC article discusses the growing concerns about the United States’ rising debt and budget deficits and their potential impacts on the economy and financial markets. For more details, you can read the full article on CNBC’s website [HERE] Recommended Reading Here’s a detailed summary to help non-financial readers understand the key points: Rising Debt and Deficits The U.S. federal budget deficit is increasing significantly. In 2023, it was projected to reach $1.7 trillion, up from $1.375 trillion in 2022. This rise in the deficit means the government needs to issue more Treasury bonds to finance its spending. Investor Demand and Treasury Yields A primary concern is whether there will be sufficient investor demand for the growing supply of Treasury bonds. If demand falters, the government might have to offer higher yields (interest rates) to attract buyers. Although bond yields have been rising, this is more closely linked to Federal Reserve policies aimed at controlling inflation than the sheer volume of new debt issuance. Political Landscape and Fiscal Policy The political environment in Washington plays a significant role in deficit management. Major changes to fiscal policy often occur when one party controls the presidency, the House, and the Senate. For example, a fully Republican government might focus on extending tax cuts, while a Democratic government might increase spending. A divided government tends to struggle with major fiscal legislation, which could unintentionally result in a smaller deficit due to built-in fiscal constraints like expiring tax cuts and spending caps. Long-Term Projections and Risks Long-term projections indicate that U.S. debt is set to reach unprecedented levels. By 2033, the debt held by the public is expected to climb to 115% of GDP, surpassing previous records. Factors contributing to this increase include an aging population and rising costs for Social Security and Medicare. If current trends continue without significant policy changes, the debt could grow to 180% of GDP by 2053 Interest Payments and Economic Impact The rising debt levels mean higher interest payments, which could consume a larger portion of federal revenue. Interest costs are projected to grow significantly, potentially exceeding $1 trillion annually by 2029, which would outpace defense spending. This shift could limit the government’s ability to fund other priorities and respond to future crises. Geopolitical and Market Implications High debt levels also pose geopolitical risks. A significant portion of U.S. debt is held by foreign entities, including countries like China. This external ownership can create vulnerabilities in financial markets and reduce the U.S.’s economic sovereignty. Moreover, a higher national debt can weaken the country’s global standing and make it more susceptible to economic and geopolitical pressures from other nations. Conclusion Overall, the article highlights the critical need for fiscal discipline and strategic policy-making to manage the growing debt and deficits. Without significant changes, the U.S. economy could face higher borrowing costs, reduced fiscal flexibility, and increased vulnerability to both domestic and international economic shifts. We thought it would be valuable to get perspectives from Treasury professional Benjamin Defays, who are also Treasury Mastermind Board member. Q: We would like to hear your opinion about the recent CNBC items issuing concerns about the rising debt of the US, surpassing the 100% GDP mark and being a big burden on the cash outflow (interest). We are seeing pressure on US Treasury yields lately, meaning the markets perceive them as higher risk or a diversification into corporate bonds. From the EU point of view, what are your thoughts? Benjamin Defays, Senior Associate Vice President at Revantage, Comments The recent surge in U.S. debt, now exceeding 120% of GDP, is a significant challenge that extends beyond American borders, impacting global financial markets and posing particular considerations for corporate treasury professionals in the EU. Another example illustrating the increasingly complex landscape treasurers must navigate through is marked this time by heightened volatility in U.S. Treasury yields and potential shifts in investment risk profiles. The substantial increase in U.S. federal debt is generating concerns about higher default risks and calls for a reassessment of investment strategies, particularly concerning short-term investments and the use of money market funds. Once again, the diversification of short-term investments into high-quality, liquid assets is critical. Money market funds, traditionally viewed as safe, must be scrutinized for their exposure to U.S. debt and associated risks. Given the rising yields and potential volatility in that market, it is prudent to consider increasing allocations to non-US denominated assets or other non-dollar denominated securities. This strategy can help mitigate currency and interest rate risks, ensuring more stability in the investment portfolio. On one hand, active and diverse liquidity management strategies will be essential in this environment. Treasurers should consider laddering maturities to balance liquidity needs with yield optimization. Maintaining a mix of short-term investments with varying maturity dates can provide flexibility and protect against sudden market shifts. On the other hand, keeping a close watch on central bank policies is even more vital. The ECB and U.S. Federal Reserve’s upcoming decisions will be influenced by this unstable situation, which will in turn affect interest rates and liquidity conditions. Understanding these policies will aid in making informed decisions about investment, currency exposure, and interest rate hedging. Furthermore, treasurers should stay informed about potential regulatory changes and fiscal policies that could affect global financial markets. The ongoing discussions about tax policies, government spending, and social security reforms in the U.S. could lead to market movements. Indeed, potential changes in U.S. corporate tax rates or new spending programs could influence bond yields and the overall risk environment. It seems that the work of the corporate treasurer is not yet set to go into a comfort zone (and if you ask me, on a personal note, this is great news!). The elevated U.S. debt levels and the resultant market dynamics present a complex challenge for corporate treasurers. By being proactive, diversifying investments, actively managing cash, and staying informed about central bank policies and regulatory changes, treasurers can navigate this uncertain landscape. Adapting to these changes with a proactive…
The Threat of Deepfake Frauds in Payment
This article is written by Kyriba Imagine this: your CEO’s voice or your CFO’s face—and a request for funds. Something in your gut is telling you that this situation feels ‘off’ but what can you do? It’s the CEO or CFO of the company after all. This is the reality of deepfake fraud, a clever ruse that is not only making headlines but also blurring the lines between truth and fiction with chilling precision. Every transaction and every interaction is a potential battleground, where the slightest misstep could lead to catastrophic losses. Misinformation and disinformation are the number one concern and near-term risk according to the World Economic Forum’s 2024 Global Risks Report for government leaders, executives, chief information security officers, and others who want to mitigate deepfake fraud. The Evolution of BEC Scams Business email compromise scams exploit the most vulnerable element in tools, technology, and processes: us. Leveraging BEC scams has remained one of the most profitable forms of cybercrime by exploiting weaknesses in human emotions and decision-making habits. In fact, despite increasing awareness of these types of scams amongst the general public, the FBI reported 21,489 BEC complaints, with losses amounting to $2.9 billion in 2023 alone. The integration of deepfake technology into these scams marks a significant step in their increasing sophistication and highlights the need for heightened vigilance and advanced cybersecurity measures. As criminals continue to use advanced AI to create more convincing frauds, the challenge for businesses becomes how to play defense against a technological threat and a psychological one. The Rising Threat of Deepfake Fraud A subset of “synthetic media” or “synthetic content,” deepfakes are defined as a type of artificial intelligence (AI) that—as the name suggests—are used to create bogus content, such as images, audio, and video. The rise of deep-fake fraud casts a shadow of doubt over every transaction. Deepfake software has become a powerful and dangerous tool in the hands of fraudsters. The technology can create the illusion of a legitimate transaction. You might think you are hearing from the CEO, the CFO, or the attorney related to a merger, requesting a legitimate payment. And by the time a company realizes it has been duped, it’s often too late. In early 2020, deep-fake voice technology was famously used in a $35 million bank heist in Hong Kong. A bank manager received a call and several emails from what appeared to be a company director he had spoken with before. The director claimed that his company was making an acquisition soon and needed a $35 million transfer to complete the process. The bank manager, recognizing the man’s voice and believing everything to be legitimate, complied and sent the money. Of course, the person who called the bank manager and sent the emails was not who they claimed to be, and the money was stolen. The theft has implications for companies of all sizes, as it represents the latest step on the evolutionary scale of a familiar scam that has duped well-meaning financial professionals into transferring millions into the wrong hands. The Deception Deepens with Video & Audio Deepfake technology uses artificial intelligence to combine still images of one person with video footage of another. In a relatively short amount of time, the technology has improved to the point where very few photos—and in some cases, just one—are needed to create a convincing video deepfake. Similarly, Deepfake audio, or “deep voice” technology is another nefarious innovation. Much like with video, the software may only need a 30-second or less snippet of audio to create a flawless deepfake, according to Rupal Hollenbeck, president at Check Point Software. In a case reminiscent of the Hong Kong heist, fraudsters created an elaborate and sophisticated scheme, posing as company executives during a virtual conference call. The result? A financial worker, despite initial suspicions, was persuaded into transferring $25 million into the fraudsters’ pockets. The Office of the CFO is the Last Line of Defense Against Deepfakes The consequences of this type of fraud is not limited to financial losses but also includes potential damage to an organization’s reputation and stakeholder trust. In response to this growing threat, it is imperative that treasury professionals operate within a culture of skepticism and integrate advanced security measures into their standard operating procedures. These new, sophisticated technologies require sophisticated solutions that combine cutting-edge technology with human expertise to detect anomalies. Five Steps to Avoid a Deepfake-out The following tips can help treasury and finance professionals identify audio and visual deepfakes. Ultimately, the best way to avoid these deep-fake scams is to follow prevention best practices and apply a critical eye. While it isn’t easy to be hyperaware of the threats around us, that is exactly what we need to be in this current environment. “It used to be that seeing was believing,” said Hollenbeck, “but not so much anymore.” Deepfakes are the latest in a long line of scams. The best way to avoid falling victim: slow down. According to Blackcloak CEO, Chris Pierson, “slowing down almost always yields a definitive answer.” Also Read Join our Treasury Community Treasury Mastermind is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. 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