Junior Treasurers Interview: A Session with Prakhar Sinha

Q.1: What attracted you to a career in Treasury management?

What attracted me to a career in treasury management is its dynamic and central role within an organization. Treasury operates at the intersection of financial markets, risk management, and strategic decision-making, which creates a constantly evolving environment. The complexity of managing liquidity, capital, and funding needs requires a balance of quantitative analysis, strategic foresight, and sound judgment. The opportunity to contribute to key financial decisions while navigating challenges on a daily basis is both stimulating and rewarding. I am particularly drawn to the multifaceted nature of the role, as it requires wearing many hats and addressing diverse issues, from risk mitigation to optimizing financial resources.

Q.2 Which aspects of treasury management do you find most appealing, and why? For example, do you enjoy cash management, risk assessment, or investment strategies?

What I find most appealing about Treasury management is the focus on liquidity and asset-liability management (ALM). Liquidity risk, while critical, has not received as much quantitative research attention, yet it is one of the most pivotal risks for financial institutions. As Professor Moorad Choudhry emphasized, mismanaging liquidity risk can cause a bank to collapse in a single day, as evidenced by the failure of SVB. ALM itself presents an optimization challenge, which I find intellectually stimulating. It aligns well with my natural inclination to seek optimal solutions, whether in professional tasks like managing financial resources or in personal aspects such as optimizing daily routines. This combination of strategic thinking and problem-solving in treasury makes it a highly appealing area for me.

Q.3: How do you see your project management skills transferring to a career in Treasury management? What specific skills or experiences from project management do you think will be beneficial in your role as a treasurer?

My experience in project finance closely aligns with many core functions of treasury management, making the transition seamless. In project finance, I’ve dealt extensively with key elements such as credit risk and liquidity risk, both of which are critical to Treasury operations. The ability to conduct sensitivity and scenario analysis, which I’ve frequently utilized to assess project viability under different market conditions, is directly transferable to managing liquidity and financial risks in a treasury context.

Financial modeling, another essential aspect of project finance, is a valuable skill I bring to treasury management, especially for forecasting cash flows, optimizing capital structure, and evaluating funding strategies. I have also developed expertise in hedging project-specific risks, a skill that is highly relevant to managing interest rate, currency, and liquidity risks within a Treasury role. My experience in assessing complex financial structures, coupled with risk mitigation strategies, equips me with the analytical and strategic approach necessary for Treasury management.

Q.4 How do your studies in financial risk management and bank treasury risk management enhance your understanding of treasury operations? Do you recommend these programs to your fellow budding treasurers?

My studies in Financial Risk Management (FRM) and Bank Treasury Risk Management (BTRM) have greatly enhanced my understanding of Treasury operations, particularly in asset-liability management (ALM), liquidity, and capital risk. The BTRM program’s strong emphasis on ALM governance has been invaluable for learning best practices in bank treasury management. In today’s regulatory environment, with Basel III mandating conservative capital and liquidity management, BTRM has provided practical, practitioner-led insights that are essential for safeguarding a bank’s stability. I highly recommend this program to anyone serious about building a career in Treasury.

The FRM certification, on the other hand, offers a broader risk management perspective. It underscores the interconnectedness of various risks, a crucial lesson highlighted by the 2008 financial crisis. Understanding how one risk affects another is critical for effective Treasury and risk management, and FRM equips professionals with the skills to manage risks holistically. Both programs complement each other and are excellent for aspiring treasurers.

Q. 5: What is the biggest challenge you currently face in your role as a junior treasurer, and how do you approach overcoming it?

What I find most rewarding about Treasury is also my biggest challenge—its dynamic nature. With so many moving parts and interrelated risk types, it can be challenging to maintain a clear understanding of how each action, whether internal or external, impacts overall operations. This complexity requires a constant mental map of how various financial risks and decisions intertwine.

To overcome this, I’ve adopted a highly structured approach, formalizing my thought process through mind maps and categorizing key ideas wherever possible. This structured method acts like Theseus’s string in navigating the labyrinth, helping me trace my steps back when needed to identify gaps or understand what might have gone wrong. It provides a clearer framework to monitor interdependencies, allowing me to manage complexity more effectively and ensure nothing is overlooked. This approach helps me stay organized in an ever-changing environment, making the challenges more manageable.

Q.6. What advice would you give to someone looking to transition into a career in Treasury Management? What steps or strategies do you recommend for gaining the necessary skills and experiences?

For anyone looking to transition into a career in Treasury Management, I recommend several key strategies. First, pursuing relevant certifications, such as Financial Risk Management (FRM) or Bank Treasury Risk Management (BTRM), can significantly enhance your knowledge and networking opportunities within the field. Engaging in projects that demonstrate your skills related to Treasury functions will help bridge the gap between your current role and your desired position.

Additionally, actively connecting with professionals in treasury is essential; treasurers are some of the kindest and most approachable people I know, always willing to share their knowledge. Highlighting transferable skills during interviews is also crucial, as many professionals transition to Treasury from other finance functions. Furthermore, familiarizing yourself with automation tools like Python or UiPath can enhance your efficiency and provide a competitive edge. Lastly, gaining exposure to Treasury Management Systems (TMS) is invaluable, as hands-on experience with these systems will be beneficial in your future role.

Q.7. What are your future goals in your treasury career, and how do you envision your role evolving over the next few years? Are there specific areas you aim to specialize in or skills you plan to develop further?

In my Treasury career, my primary goal is to gain exposure to creating a Treasury function from the ground up. I aim to focus on quantitative research in liquidity risk, as I believe this area is crucial for effective Treasury management. Additionally, I plan to work on automating repetitive processes to enhance operational efficiency, which will allow me to allocate more time toward strategic initiatives, particularly in asset-liability management (ALM).

I also aspire to learn a programming language like Julia, as it will enable me to work on projects that involve advanced financial modeling and analytics in ALM. Networking is another critical component of my future plans; I intend to connect with industry professionals to share insights and learn from their experiences. Ultimately, I hope to publish a research paper that contributes to the field, further solidifying my expertise and commitment to advancing in Treasury Management.

Q.8. What books, podcasts, or online forums would you recommend for aspiring Treasury professionals looking to deepen their knowledge and stay updated on industry trends?

For aspiring Treasury professionals looking to deepen their knowledge and stay updated on industry trends, I recommend several resources. Treasury Masterminds is an excellent forum that features insights from experienced Treasury professionals. YourTreasury.ai offers valuable tools and content focused on treasury transformation. Their workshops are highly recommended.

Books by Professor Moorad Choudhry are highly informative and provide a solid foundation in Treasury concepts and practices. For podcasts, the Treasury Management International Podcast covers various topics relevant to the Treasury landscape, and Corporate Treasury 101 is great for foundational knowledge.

Q.9: Before transitioning into a treasurer role, what misconceptions about treasury management did you have ?

Before transitioning into a Treasury role, I had several misconceptions about Treasury management. To be honest, I didn’t fully understand its importance until about six months ago, and it was only through my studies that I began to appreciate the critical role treasury plays within an organization.

One common myth I encountered is that Treasury services are only for large corporations. In reality, businesses of all sizes can benefit from effective Treasury management. Another misconception is that Treasury services are expensive and complicated; they are often seen as cost centers. However, I believe that Treasury services are indispensable, and with the right strategies, they can be efficient and cost-effective.

I also initially believed that Treasury services were synonymous with banking services, but I have learned that they encompass a broader range of financial management functions.

Q10: What tools or software do you find indispensable in your Treasury operations, and how do they enhance your productivity?

In my treasury operations, several tools and software are indispensable for enhancing productivity and efficiency. A robust Treasury Management System (TMS) is critical for managing cash flow, liquidity, and funding requirements, as it automates processes and provides real-time insights into cash positions while streamlining reporting. Data analytics software like Tableau and Power BI allows me to analyze financial data and generate insightful reports, enhancing my ability to visualize trends and make data-driven decisions.

Additionally, automation tools such as UiPath and programming languages like Python are valuable for streamlining repetitive tasks, improving efficiency, and enabling more sophisticated data analysis. Trello boards help with project management and task organization, facilitating clear communication and collaboration within the team.