Tag: Treasury Masterminds

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Creating an Impactful Professional Value Proposition

Creating an Impactful Professional Value Proposition

Constructing and refining an elevator pitch are about as much fun as writing a resume, but the risk of not having and delivering one can keep your career on ice. I have always found it challenging to create and manage my own elevator pitch, so I began to ponder how I could help all professionals create and manage an elevator pitch. This blog shares the “secret sauce” for anyone to create an impactful value proposition in 15 minutes or less. I have come up with five questions that people can ask themselves to discover the ingredients to craft an impactful professional value proposition: The following are 5 steps anyone can use to create a quality elevator pitch (professional value proposition): Here are the three pillars of my current professional value proposition: An impactful value proposition is an asset to any treasury career. It speaks to what you have accomplished, how you do it, and the value of working with you and investing in building a relationship with you.  Stay tuned for the next blog in Managing Your Professional Brand in Treasury series! 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. Notice: JavaScript is required for this content.

The Changing Face of Corporate Treasury: Why Adapting Matters

The Changing Face of Corporate Treasury: Why Adapting Matters

Let’s face it—corporate treasury isn’t what it used to be. Gone are the days when we were just number crunchers tucked away in the back office, counting beans and managing cash. Now? We’re right in the thick of it, helping shape company strategy and making big decisions. It’s been quite a ride, and it’s all thanks to a perfect storm of globalization, tech advances, new regulations, and a laser focus on managing risk. But here’s the thing: with all this change, we’ve got to be nimble. That’s where change management comes in. It’s not just a buzzword; it’s our ticket to staying relevant and thriving in this fast-changing world. And don’t get me started on generational differences; that would be a whole separate article. Out with the Old, In with the New Remember when our biggest concerns were making sure there was enough cash in the bank and we weren’t breaking any rules? Those were simpler times. Now, we’re juggling a whole new set of balls: Why Change Management is Our New Best Friend So, how do we keep up with all this change? That’s where change management comes in. Here’s why it’s so crucial: 1. Getting Everyone on the Same Page Treasury doesn’t operate in a vacuum. We’re part of a bigger picture, and our goals need to align with the company’s overall strategy. Change management isn’t just about updating our own processes; it’s about making sure we’re moving in lockstep with the rest of the organization. For example, if the company’s pushing for aggressive growth in new markets, we need to be ready with strategies for managing increased foreign exchange risk and setting up efficient cash management systems in those regions. Change management helps us stay tuned in to these big-picture goals and adapt our approach accordingly. 2. Embracing the Chaos If you’re not changing, you’re falling behind. Building a culture of agility in treasury means fostering an environment where people aren’t just okay with change—they’re excited by it. This might look like encouraging your team to experiment with new fintech solutions, even if they sometimes fail. Or it could mean setting up regular brainstorming sessions to reimagine how we approach traditional treasury functions. The key is to make change feel like an opportunity, not a threat. And it is ok to fail! 3. Leveling Up Our Skills As Treasury becomes more strategic, we need a whole new skillset. Gone are the days when Excel prowess was enough. Now we need people who can analyze big data, understand complex financial instruments, and communicate effectively with stakeholders across the business. Change management helps us identify these skill gaps and address them proactively. This might involve setting up training programs, hiring new talent with different backgrounds, or partnering with other departments to share knowledge. The goal is to build a team that’s always learning and growing. As a manager, be open to hiring different skillsets, not only technical but also soft skills. 4. Playing Nice with Others Effective treasury management today requires collaboration across the entire organization. We need to work closely with IT on cybersecurity and system integration, with legal on regulatory compliance, with sales on customer payment terms, and so on. Change management gives us the tools to build these relationships effectively. It’s about creating open lines of communication, understanding other departments’ needs and constraints, and finding ways to align our goals. When we’re implementing a new treasury management system, for instance, change management helps us bring all these stakeholders on board from the start. Working together in cross functional teams is the key to success. 5. Keeping Score How do we know if our changes are actually making things better? That’s where measurement comes in. Change management isn’t just about implementing new ideas – it’s about tracking their impact and being ready to pivot if needed. This might involve setting up key performance indicators (KPIs) for new initiatives, like measuring the reduction in cash conversion cycle after implementing a new working capital strategy. Or it could mean conducting regular surveys to gauge how well the Treasury team is adapting to new technologies or processes. The point is, we need to be data-driven in our approach to change. It’s not enough to have a gut feeling that things are improving—we need hard numbers to back it up and guide our next steps. The KPI’s are not the goal but the tool. The Bottom Line Look, the world of corporate treasury is changing faster than we can keep up. It’s exciting, it’s challenging, and sometimes it’s downright scary. But here’s the thing – with the right approach to change management, we can do more than just survive. We can thrive. By focusing on these five aspects of change management, we can transform Treasury from a reactive function into a proactive, strategic partner for the business. It’s not always easy, but in today’s fast-paced business environment, it’s absolutely essential. In this wild new world, it’s not the strongest or the smartest who come out on top. It’s those who can adapt. So let’s embrace the change, roll with the punches, and show everyone what modern treasury can do. Trust me, it’s going to be one hell of a ride. This article is the first of a series of 9. A zoom in on essential soft skills for treasures. Enjoy the weekly read and let us know what you think of them. We appreciate every feedback and compliment. info@treasurymastermind.com 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.

Junior Treasurers Interview: A Session with Prakhar Sinha

Junior Treasurers Interview: A Session with Prakhar Sinha

In the latest series of our Junior Treasurers Interview session, we sit down with Prakhar Sinha, a junior treasurer making strides in the world of treasury management. Prakhar shares his journey into this dynamic field, offering insights into the core aspects of treasury that inspire him—from managing liquidity and risk to optimizing financial resources in a rapidly shifting landscape. Throughout this interview, Prakhar sheds light on the challenges, learning experiences, and key skills he’s developed along the way, providing valuable advice for aspiring treasurers. Whether you’re new to treasury management or looking to deepen your understanding, this conversation with Prakhar offers a firsthand look into the rewarding and impactful work of a junior treasurer. Join us as we dive into Prakhar’s experiences and find out what makes a career in treasury both rewarding and challenging. 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…

Managing Your Professional Brand in Treasury

Managing Your Professional Brand in Treasury

An impactful professional brand can drive the career momentum of any treasury professional, and a lack of commitment to investing in it or even knowing and carrying about it can create an inherent barrier to career success.  In today’s world of all things AI and technology treasury professionals need to stand out amongst their peers and demonstrate they have skills that matter no matter where technology takes the finance profession. This is the initial blog in the Managing Your Professional Brand in Treasury blog series. This series will give you actionable advice to build and manage an impactful professional brand that will set you apart from your treasury peers, and empower you to control your career. In this blog we will introduce the key components of a professional brand. A professional brand consists of many components. The components need to align as that alignment amplifies the impact of a professional brand within a finance team, beyond a finance team to work colleagues, and to professional peers and current and potential new employers. Five key components of any professional brand are: Your professional value proposition demonstrates the value that you deliver to your employer, colleagues, and professional peers. It is what many people used to call your “elevator pitch”. The task of crafting a professional value proposition can seem daunting to any finance professional regardless of the stage a person is at in his or her career. I have come up with questions that each person wanting to craft a professional value proposition can asak of themselves to illuminate the key pillars of that value proposition. Your LinkedIn profile serves as the foundation of your online brand. If you do a Google search on your own name, the link to your LinkedIn profile will be the first result. Your LinkedIn profile is the first impression you will make on thousands if not tens of thousands of people who are interested in learning more about you including current and potential new employers, colleagues, and professional peers. As the saying goes “there s nothing more important than making a good first impression” in any relationship, so finance professionals need to invest in creating and managing an impactful LinkedIn profile. Each section of a LinkedIn profile is important. In a future blog we will share how to build and manage an impactful LinkedIn profile. Even in today’s digital world resumes matter. Your resume should reflect your professional value proposition and align with your LinkedIn profile. Creating a top-notch resume is as much about what to avoid as it is about what to include in your resume. Your skillset is critical to job success at any stage of your career. Investing in new skills as well as updating and upgrading existing skills is important. Given the explosion of AI and automation soft/human skills are more important than ever for every finance professional. In future blogs we will dive into which skills are most important in the evolving treasury landscape. This will include sharing how to develop your human skills ranging in areas from effective listening to negotiating with purpose to telling the story beyond the numbers. A powerful professional network has many components and needs to be managed in order for it to deliver value. You need to have it in addition to knowing how and when to leverage it. In developing each dimension of your network, it is important to keep the following questions in mind: A robust network has people from these groups of people from a professional life: In future blogs I will share how to develop your professional network within your treasury department, beyond your treasury department at work, with your treasury peers across the globe, and with your banking and technology partners. Treasury professionals need to invest in their professional brands and do so with the mindset of continuous improvement. A great brand can drive the career success of any Treasury professional. 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. Notice: JavaScript is required for this content.

Choosing the Right Banking Partners: Navigating Treasury Needs Amidst Industry Shifts

Choosing the Right Banking Partners: Navigating Treasury Needs Amidst Industry Shifts

In light of HSBC’s recent structural changes, corporate treasurers worldwide are, once again, considering reassessing their banking relationship strategies. The age-old question of whether to partner with global banking giants or smaller specialized institutions has taken on new relevance. How should treasurers balance the advantages of scale against the stability and focus of smaller banking relationships? Progressive corporate treasurers are rapidly moving away from their traditional role as stewards of cash management and funding to become strategic business partners driving digital transformation. In today’s volatile business environment, forward-thinking Treasury leaders recognize that maintaining the status quo is no longer sufficient. They seek banking partners who can support their journey toward Treasury 2.0, where real-time visibility, predictive analytics, and automated decision-making become the norm. Restructuring Impact on Treasury When large banks undergo restructuring, treasury departments often face both opportunities and challenges. Such reorganizations can lead to enhanced focus on specific market segments or regions, potentially resulting in improved services and more targeted solutions. However, they may also create temporary service disruptions, relationship management changes, and uncertainty about long-term strategic alignment. Smaller banks, meanwhile, often maintain more consistent organizational structures and service models. Their relative stability can provide treasurers with more predictable relationship management and service delivery, though they may lack the comprehensive global capabilities of larger institutions. The Technology Investment Equation Large banks undergoing restructuring often emerge with renewed focus on technological investment, particularly in areas like API development and real-time payment capabilities. These transformations frequently come with substantial technology budgets aimed at modernizing legacy systems. However, the implementation of these changes can be complex and time-consuming, potentially affecting service delivery during transition periods. Smaller banks, while operating with more limited resources, often demonstrate greater agility in technology adoption. Their partnerships with fintech providers and cloud-native solutions can result in faster deployment of new technologies, though perhaps with less extensive feature sets than their larger counterparts. In many cases, banks tailor solutions for their largest clients, which can be a significant benefit for large companies. Security and Risk Management During Transitions Major bank restructuring events often lead to enhanced security protocols and more sophisticated fraud prevention systems, as organizational changes provide opportunities to implement improved controls. Large banks can leverage their scale to invest in advanced AI-driven security systems and maintain global fraud prevention networks. However, periods of organizational change can also introduce operational risks and temporary vulnerabilities. Smaller banks, with their more stable organizational structures, often maintain consistent security protocols and may offer more personalized fraud prevention services based on intimate knowledge of their clients’ operations. They, however, might be unable to offer greater protection from potential hacking attacks. Service Continuity vs. Innovation One of the most significant considerations during bank restructuring is the potential impact on service quality and relationship management. Large banks typically promise enhanced service capabilities post-restructuring, but transitions can lead to temporary disruptions in service delivery and relationship continuity. Treasury departments may find themselves navigating new organizational structures or adapting to changed service models. Smaller banks generally offer more consistent service levels and relationship management, with fewer organizational changes affecting day-to-day operations. Their ability to maintain stable relationships can be particularly valuable during periods of market uncertainty or when rapid decision-making is required. Infrastructure Evolution Bank restructuring often catalyzes significant infrastructure modernization initiatives. Large banks may use these organizational changes as opportunities to overhaul legacy systems and implement new technologies. While these changes promise long-term benefits, they can create short-term challenges for Treasury departments relying on established processes and integrations. Smaller banks, typically operating with less complex infrastructure, can often implement technological changes more smoothly, though perhaps with less comprehensive feature sets. Strategic Considerations for Modern Treasurers In this environment of ongoing banking sector evolution, treasurers must carefully weigh several factors when selecting and maintaining banking relationships: Looking Forward As the banking sector continues to evolve, treasurers must remain adaptable in their approach to banking relationships. The distinction between large and small banks may become less about size and more about their ability to provide stable, innovative services that align with treasury departments’ strategic objectives. The coming years will continue to reveal whether treasurers predominantly opt for the stability and personalized service of smaller banks, the comprehensive capabilities of restructured global institutions, or maintain a hybrid approach that balances both. The most successful treasury operations will likely maintain a balanced portfolio of banking relationships, combining the innovation and global reach of large banks with the stability and personalized service of smaller institutions. This hybrid approach allows treasurers to mitigate the risks associated with bank restructuring while maintaining access to necessary services and capabilities. 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. Notice: JavaScript is required for this content.

Treasury for Non-Treasurers: Sophistication in Solvency Management (Part I)

Treasury for Non-Treasurers: Sophistication in Solvency Management (Part I)

Introduction In the last chapter, we reviewed different types of treasuries at a high level: the operational ones, internal and control-oriented, and the strategic ones, sophisticated and externally oriented to work with and support other organisational functions as well as customers and suppliers. We also reviewed tactical treasuries, neither completely operational nor entirely strategic, that either had too little underlying business cash flow to create value from or were constrained by cultural and contextual factors. We described these tactical treasuries as being in ‘The Chasm’ – trying to resolve too many conflicting objectives with too few resources. We reviewed methods of getting out of the chasm and making treasury strategic and materially value-adding to non-treasurers. This new chapter concentrates on corporate treasury’s most important objective, keeping the organisation solvent. We’ll start with an overview and then review solvency management in operational treasuries. After that, we’ll follow up with tactical and strategic treasuries in the next articles, and then, next, other objectives like profitability support. Note that this article builds on the previous ones. For example, we talked in detail about the impact of cultures and contexts in the two articles about crossing the chasm. You will find it harder to follow without reading these articles first. Each article is short – If you want to read or re-read them, the links are below. Overview: What are the different levels of sophistication in solvency management? Remember this diagram from the article on operational treasuries? Let’s look at all the different levels of sophistication relevant to solvency at all levels of sophistication, along with the associated-level productivity and management strategies: There are six types of treasury with six levels of solvency management sophistication. Before we dive in and talk about each, it’s important to note that these are descriptions of the ‘average’ treasury managing solvency in an ‘average’ way. There are variations in real-life treasuries: Organisations may be more or less sophisticated; Individuals may have unusual innate or previously learnt skills. These variations are noteworthy, especially when we compare sophistication in solvency management with sophistication in profitability support, productivity and management strategy. These can and do get misaligned. We’ll talk about this and its impacts in a later article. The six levels of solvency management sophistication are: 1.     Cash management 2.     Liquidity management 3.     [New] Skills development and application 4.     Working capital management 5.     Financing optimisation 6.     Value-chain financing We will investigate each in turn, including Who needs sophisticated solvency management? Not all companies need sophisticated solvency management, but it’s hard to think of anyone who shouldn’t be interested in whether these companies have appropriate solvency management in place. Imagine an international consultancy like McKinsey or a recruitment consultancy like Adecco. Compare these to manufacturing companies like car companies, long-term research and development investors like GSK or Johnson & Johnson, and even housebuilders like China’s Evergrande. This last one is now famous because it did, in fact, become insolvent. We can only speculate what would have happened if it had had more sophisticated solvency management. Consultancies’ costs, even global ones, are primarily related to their employees. Employees can be decreased or increased quickly in line with sales. In other words, outflows can be reduced fast if there aren’t sufficient current and future inflows. Manufacturing companies, long-term investors in research and development, owners of large amounts of inventory and work-in-progress, on the other hand, cannot adapt so fast. They must borrow or issue shares to remain solvent even in worse economic environments. They, therefore, need to be more sophisticated in managing their solvency. What’s this got to do with you, non-treasurers? It’s hard to think of anyone who shouldn’t be interested in knowing in advance whether these companies have appropriate solvency management and adapt the actions they take as a result. It’s too late once the companies hit hard times. So, imagine you’re a leading decision maker in Acme Manufacturing Corporation, a multi-billion-dollar turnover company that needs large amounts of funding. What kind of treasury do you have now, and what should it be like? You are not the Treasurer, however. How can you tell from the outside looking in? Let’s find out by looking at operational treasuries first. Operational treasuries’ solvency management For a reminder of operational Treasury types, see the article Operational Treasuries. Basic treasuries Basic treasuries do cash management only. They move money between head office, subsidiaries and or banks, doing the same day-to-day unless the CFO or head of the finance function says differently. They follow an ad-hoc management strategy with, usually, no written policies or processes. They have little specialised technology and a small staff – often just one person. This person or small staff will have little or no specialist training. They rely on on-the-job practical experience. What can you expect from this type of treasury if it’s what you’ve got in Acme Manufacturing? Not much – This type of treasury won’t have the tools and skills to assess future solvency. This type of treasury is likely to be found in a smaller turnover organisation, a startup-, a small- or medium-sized enterprise – my experience suggests one with $ 200 million or less in sales – or in organisations where the CFOs do not realise that treasury should be the guardian of solvency management. My experience working on the sales side in banks and as a consultant tells me that many multi-billion $ sales companies have treasuries like this. Let’s describe these basic treasuries in an easy-to-read format consistent with how we’ll describe other types later on: 1.     Solvency management sophistication level: 2.     Management strategy: 3. Focus: 4. Productivity: Technology: Outsourcing: Banking products and services: 5. Skills: 6. Organisation structure: 7. Ability to handle future funding shortfalls: The accounting department will usually handle all longer-term cash flow planning, not treasury. 8. Unintended consequences at this level: 9. ‘Tells’ non-treasurers might see from outside the function: As a multi-billion $ turnover company, ACME needs a more sophisticated treasury than this. This type is unacceptable except in any…

HSBC’s New Organisational Structure and Implications for Corporate Treasury

HSBC’s New Organisational Structure and Implications for Corporate Treasury

HSBC’s recent announcement of a simplified organisational structure, effective from January 2025, is a significant move designed to accelerate strategic execution. By dividing its business into four main units—Hong Kong, UK, Corporate and Institutional Banking, and International Wealth and Premier Banking—HSBC is positioning itself for more focused growth and operational agility​. This restructuring reflects a trend seen in large global banks, aiming to streamline decision-making and reduce internal duplications. For corporate treasurers, especially those managing global operations, the implications of this new structure are critical. Treasurers often choose banks like HSBC for their global reach, yet frequently discover that even the largest institutions do not function as one cohesive entity across markets. Local forms, country-specific regulations, and the need for regional contacts remain a challenge, even with global giants. Global Bank, Local Challenges While HSBC’s vast presence in over 50 markets is undeniably a key advantage, treasurers know that navigating the complexities of local regulations, banking norms, and administrative requirements can undermine the efficiencies gained from a global banking partner. For instance, managing cash across jurisdictions may require unique account structures or compliance procedures that differ widely between markets. This is particularly evident in emerging markets where regulatory frameworks are less harmonized with global standards. In many cases, treasurers find themselves dealing with the same bank but essentially managing separate relationships with each local entity. This reality raises an important question: Is bigger truly better when selecting a global banking partner? Is Bigger Always Better? The idea that larger banks are automatically the best choice for corporate treasury has long been debated. While global banks like HSBC offer unparalleled scale, access to liquidity, and the ability to execute cross-border transactions, the local challenges cannot be overlooked. For corporate treasurers, a bigger bank might offer: However, these advantages come with their own set of challenges: The Corporate Treasurer’s Dilemma Corporate treasurers must weigh these pros and cons when choosing their banking partners. While HSBC’s restructuring aims to reduce these internal inefficiencies, it remains to be seen how much of this will benefit the day-to-day operations of corporate treasuries, especially those that rely on HSBC for managing complex global operations. For treasurers, this restructuring could offer some hope of a more unified service experience. By focusing on specific regions like Hong Kong and the UK, and by integrating its global banking and commercial banking functions, HSBC may reduce the fragmentation that treasurers often experience when dealing with different business units of the same bank. However, HSBC’s ability to execute on this vision will be key. Insights from Treasury Experts We thought it would be valuable to get perspectives from Treasury experts, who are also Treasury Masterminds Board members. Jeremy Reedus, Vice President and Global Treasurer, Varel Energy Solutions, Comments: Although we can all respect a bank for improving internal efficiencies, the Treasury professional has an additional issue that comes to mind. If the bank is fully integrated into the company’s ERP, then Treasury is faced with a migration to another institution in the near future. This requires additional SME personnel support from Accounting and IT at minimum. In other words, the bank’s strategic decision has larger ripple effects on an organization than just Treasury. Nicholas Franck, Founder, INTELIGANS, Comments: One question that come to my mind: does splitting into two segments mean the bank is looking to sell off one or the other? It’s normal practice when a company wants to sell part of itself off to another or to PE investors. That would be a market changing move. Patrick Kunz, Fonder/CEO, Percunia B.V. Treasury and Finance, Comments: I am struggling to see this as positive or negative news. So many questions that come to my mind. Will the distance between segments increase? how about global intrabank communication lines? A truly global bank would be great but this will remain challenging for a big bank like HSBC. Time has to tell if this is a smart move. The treasurer judges are still out there. Conclusion: Rethinking Global Banking Strategies In conclusion, while HSBC’s organisational changes aim to simplify their operations, treasurers must continue to carefully evaluate whether a bigger bank is truly the better option for their specific needs. In some cases, the answer may be a blend of global and local banking partners, ensuring that they have both the reach and the on-the-ground expertise required to navigate the complexities of international markets. As HSBC implements its new structure, treasurers will need to monitor whether the promised efficiencies translate into real-world improvements in banking relationships, especially in emerging markets where local compliance and bureaucracy often prove to be the largest hurdles. 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. Notice: JavaScript is required for this content.

The Future of Faster International Payments: What It Means for Corporate Treasurers

The Future of Faster International Payments: What It Means for Corporate Treasurers

In today’s interconnected world, corporate treasurers face increasing pressure to streamline cross-border payments. As global businesses expand, so does the need for faster, more transparent, and cost-effective international payment solutions. A recent update on the European Central Bank’s TARGET Instant Payment Settlement (TIPS) service reveals promising steps toward global payment interoperability, with significant implications for treasurers managing complex multinational cash flows. The Need for Speed in Treasury Traditionally, cross-border payments have been slow, cumbersome, and costly, often taking several days to clear. This can disrupt cash flow, delay supplier payments, and increase financial risk due to fluctuating exchange rates. Corporate treasurers constantly look for ways to mitigate these issues, seeking payment solutions that align with their companies’ liquidity needs. The expansion of fast payment systems like TIPS represents a game-changer for Treasury departments, enabling near-instantaneous settlement across borders. TIPS and the Global Payments Ecosystem TIPS is designed to support real-time euro payments, but its latest initiatives aim to go beyond Europe, connecting with other global fast payment systems. According to the ECB, this will reduce fragmentation in the global payments ecosystem, a challenge that corporate treasurers regularly encounter when managing cross-border transactions. Interoperability between systems not only promises to reduce transaction times but also cuts costs—essential factors for improving overall working capital. Here are the core initiatives related to TIPS’ global expansion: 1. Cross-Currency Settlement via the OLO Scheme:  This involves implementing cross-currency settlement, allowing payments between the TIPS platform and other fast payment systems without the need for direct links between them. For corporate treasurers, this would mean smoother cross-currency transactions, lower FX exposure risks, and more predictable cash flows. Having instant access to funds in multiple currencies is invaluable for managing daily liquidity needs. 2. Joining Project Nexus for Multilateral Payment Networks:   Project Nexus, spearheaded by the Bank for International Settlements, aims to connect fast payment systems from countries such as Malaysia, India, Thailand, and Singapore. By linking with Nexus, TIPS will evolve into a hub for instant payments in and out of the eurozone. For treasurers managing global operations, this simplifies cross-border payments, cutting down on the number of intermediaries, which often delay transactions and increase costs. 3. Establishing a Bilateral Link with India’s UPI:   India’s Unified Payments Interface (UPI) is one of the most advanced and heavily used payment systems globally. A bilateral link with UPI would unlock significant potential for treasurers, especially those handling payments in or out of India. Given that India is among the top ten recipients of remittances from the euro area, corporate treasurers can benefit from seamless euro-to-INR transfers, helping them manage both outgoing and incoming cash flows with unprecedented ease and speed. Use Cases for Corporate Treasurers The adoption of faster payment systems has several direct applications for corporate treasury functions:   Faster settlement times mean that treasurers can better predict and manage daily cash flows, ensuring sufficient liquidity across global operations without having to rely on costly short-term borrowing or holding excessive reserves.   Cross-currency settlement services help mitigate the risk of currency fluctuations, allowing treasurers to execute transactions at near-real-time exchange rates. This can also reduce the need for complex hedging strategies that often consume time and resources.   For multinational corporations, having access to a unified payments ecosystem can drastically reduce the complexity of cross-border transactions. Instead of navigating different payment systems in each country, treasurers can rely on the interoperability of TIPS and other linked networks to ensure faster, cheaper, and more transparent payments.   Fast payments ensure that suppliers are paid promptly, potentially improving negotiation terms and fostering better partnerships. This is particularly important in industries with tight supply chains, where payment delays can disrupt production. The Road Ahead: Interoperability and Instant Payments The ultimate goal of these initiatives is to create a globally interconnected instant payment network, aligning with the G20’s vision of faster, cheaper, more transparent, and accessible cross-border payments. For corporate treasurers, this means a significant shift towards more efficient international financial management. As systems like TIPS expand, treasurers will be able to make quicker decisions, improve cash management, and enhance their companies’ global financial strategies. Treasurers should stay informed about developments in the global payments landscape and consider how these advancements could fit into their broader liquidity and risk management strategies. The future is fast, and corporate treasury must be ready to keep pace. 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. Notice: JavaScript is required for this content.

Global Banks to Use Swift for Digital Asset Transactions by 2025

Global Banks to Use Swift for Digital Asset Transactions by 2025

The financial world is undergoing a transformation with the rise of digital assets and tokenization. And Swift is stepping in to facilitate this change. Starting in 2025, global banks will trial live digital asset transactions using Swift’s well-established messaging and infrastructure. This is an important step in creating a bridge between traditional finance and the rapidly evolving world of digital assets. Swift has long been a central player in global payments, ensuring secure and reliable cross-border transactions for financial institutions worldwide. With digital assets gaining traction—both in the form of cryptocurrencies and tokenized real-world assets—the need for a platform that supports the interoperability of these assets is growing. Swift’s initiative aims to meet that demand. Connecting Traditional Finance with Digital Assets One of the key challenges in integrating digital assets into mainstream finance is interoperability. Different platforms and blockchains often operate in silos, making it difficult for financial institutions to manage cross-border and cross-asset transactions. Swift’s approach, which leverages its messaging infrastructure, is to create a unified system for managing both digital and traditional assets. Earlier in 2023, Swift conducted a series of successful blockchain interoperability tests with global banks and financial institutions. These tests confirmed that Swift could enable digital asset transfers and ensure smooth communication between different platforms. The upcoming trials will take this a step further. This will allow banks to conduct live transactions using digital assets, all while connected to Swift’s network. Key Participants and Vision Prominent financial institutions, including BNP Paribas, Citi, and Clearstream, are taking part in the trials. These banks, along with other global players, will explore how they can integrate digital assets into their offerings. Whether it’s handling tokenized securities or settling digital currencies. Swift aims to be at the forefront of facilitating seamless financial transactions. This trial will provide valuable insights into how digital assets can coexist with the traditional financial system. Swift’s role will be to ensure that transactions are not only secure and compliant but also efficient. This is regardless of the asset being transferred. As more assets become tokenized—ranging from real estate to stocks—having a robust system like Swift’s that can handle these transactions will be crucial. What This Means for the Future The move towards digital assets is gaining momentum, driven by the potential benefits of tokenization. Tokenized assets, for instance, can enhance liquidity, make trading more efficient and open up new investment opportunities. Swift’s involvement signals that mainstream financial institutions are taking this seriously. For treasurers and finance professionals, this development could mean more efficient cross-border transactions, lower costs, and improved access to new asset classes. It’s a sign that the financial infrastructure of tomorrow will be more inclusive, supporting a wide range of assets and platforms without sacrificing the security and reliability that Swift is known for. Swift’s digital asset transaction trial is not just about adopting new technology; it’s about shaping the future of global finance. As tokenized assets and cryptocurrencies continue to grow, Swift is positioning itself as a key enabler, ensuring that both traditional and digital assets can be managed seamlessly in the same system. Conclusion The financial landscape is evolving, and Swift is making strides to ensure it remains relevant in a world where digital assets play an increasing role. With trials set for 2025, the global banking community will gain first-hand experience in managing digital assets, paving the way for broader adoption and integration of these assets into mainstream finance. Swift’s efforts to connect traditional and digital finance could be a major step forward for the global economy, offering new possibilities for financial transactions across borders and asset types. For financial professionals, keeping an eye on Swift’s developments in this area will be critical as the financial ecosystem continues to embrace the future of digital assets. 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. Notice: JavaScript is required for this content.