Bitcoin’s $66,000 Milestone: What It Means for Corporate Treasurers
The Bitcoin Boom Bitcoin has once again captured headlines, soaring to $66,000. This surge is largely attributed to increased investments in Bitcoin ETFs (exchange-traded funds), signaling growing institutional interest in cryptocurrencies. But what does this mean for corporate treasurers? Let’s dive in. Corporate Treasury: A Conservative Approach For most corporate treasurers, Bitcoin remains on the periphery. Their focus lies on three key factors: Bitcoin, with its notorious volatility, struggles to meet these criteria. Only a handful of companies, primarily in the tech sector like Tesla and MicroStrategy, have ventured to include Bitcoin in their balance sheets. The ETF Effect The rise of Bitcoin ETFs is a game-changer for institutional investors. These regulated instruments offer a more palatable entry point into the crypto market. However, for treasury portfolios, Bitcoin ETFs don’t significantly mitigate the underlying volatility risk. As a result, they’re unlikely to become a core component of corporate treasury strategies anytime soon. Ripple Effects on Risk Management While direct Bitcoin holdings are rare in corporate treasuries, the cryptocurrency’s price movements can have indirect effects. A Bitcoin surge might influence overall market volatility, particularly if a sharp correction follows. Treasurers with investments in broad-based ETFs or exposure to crypto-correlated sectors should stay alert to these potential ripple effects. Regulatory Hurdles Regulation remains a significant barrier to widespread corporate adoption of Bitcoin. While ETF approvals signal progress towards institutional acceptance, they don’t resolve the broader regulatory uncertainties in the crypto market. Treasury teams, known for their conservative approach, are unlikely to embrace an asset class still finding its footing in the legal landscape. Bitcoin as a Payment Method: A Treasury Perspective While Bitcoin may not be ready for prime time as a treasury asset, its potential as a payment method is gaining traction. As more businesses and consumers embrace crypto transactions, treasurers may need to consider Bitcoin’s role in their payment strategies. Potential Benefits: Challenges to Consider: The Bottom Line For most corporate treasurers, Bitcoin’s recent price surge is more of a spectator sport than a call to action. While the cryptocurrency continues to mature, corporate treasuries are likely to maintain their focus on traditional, stable assets that offer predictable returns and liquidity. Bitcoin’s potential as a payment method, especially for cross-border transactions, may be of growing interest. However, the associated risks—from volatility and liquidity challenges to regulatory concerns—still outweigh the benefits for most corporations. As the crypto landscape evolves, corporate treasurers will remain vigilant, waiting for increased stability before considering widespread adoption. In the meantime, Bitcoin’s journey from speculative asset to potential treasury tool continues, with each price milestone adding a new chapter to its story. 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.
Franklin
Treasury for Non-Treasurers: Crossing the Chasm (Part II)
Introduction In “Treasury as a Strategic Function”, we explained why Treasury matters to you, the Non-Treasurers. Later articles discussed how operational and strategic treasuries in the chasm offer limited value. Real value-add comes from strategic treasuries that have crossed the chasm. The previous article mentioned that amounts, cultures, and contexts push treasuries into the chasm. When you and treasury want to take action, you can’t change the underlying business cashflow amounts – they are what they are. Culture and context, on the other hand, can be changed. This article will show how treasuries emerge from the chasm by doing precisely that. This solution may seem unconventional – it’s rarely mentioned in standard articles and textbooks – but as the problem isn’t financial, neither is the solution. The issue stems from people in and outside of treasury, so change must focus on them. Note for non-Treasurers: As an organisation insider, you can request and support treasury’s evolution into a strategic function valuable to everyone, especially during crises. But, understanding the relevant context and cultural elements is crucial for formulating practical next steps. For suppliers, it’s similar; your products and services are tools for operational and tactical treasuries, often sold on price. However, when offered with appropriate technical and soft know-how relevant to each specific client, they become solutions for treasuries that are or want to be more sophisticated. These are sold on value, not price. These benefits underscore why mastering ‘soft skills’ like culture and context change is vital for all of you. Types of treasuries Let’s revisit the different types of treasuries before exploring them in more depth. While Figure 2 shows each treasury type in a distinct quadrant, all types except the basic treasury build upon each other. They progress layer-by-layer through operational and tactical levels until the function reaches its pinnacle in a few companies like IATA and GE Capital: those with a value-adding, external-oriented organisation. See Figure 3. Figure 2 highlights the challenge faced by tactical treasuries. As the saying goes, “A servant cannot serve two masters.” These treasuries have conflicting priorities and will never match the effectiveness of a strategic treasury. Crossing the chasm brings clarity to the purpose of treasury and, therefore, to its ability to effectively deliver material value to the organisation. Bridging the chasm methods In this section, we’ll explore examples of three different methods for bridging the treasury chasm. Detailed information is provided in the appendices for those interested in the general frameworks applicable to any organisation. Method 1: Out of sight, out of mind This method was the first I encountered in my professional career, though I didn’t realise it followed a successful standard framework at that time. While working for IBM Europe, we faced a challenge: some subsidiaries were borrowing while others were lending, but not to each other. This inefficiency cost the company money and exposed the group to material risks if one of the cash-holding banks were to fail. However, IBM’s decentralised structure meant the head office couldn’t force subsidiaries to lend to each other. Our solution? Create a function with a different culture in a new context: To change the context, we: To change the culture, we: The internal bank started with lending and borrowing only. Voluntary participation meant subsidiaries saw it as an opportunity, not a threat. Even in the first year, they gave 95% of their business to the new entity. The function grew rapidly, taking over customer financing activities and delivering improved services. It became a successful value-adding, company-oriented function. I learnt a crucial lesson later on, which I now pass on to you: implementing and creating a new culture isn’t enough. It must be nurtured until firmly embedded both inside and outside the function. In IBM’s case, this wasn’t fully achieved, partly due to Lou Gerstner’s top-to-bottom restructuring in the 1990s. As a result, the function arguably went back into the chasm. It was better than before but didn’t reach its full potential. The general framework for Method 1 is in Appendix 1 of the Treasury for Non-Treasurers (Appendices) article. Method 2: Leadership led To keep the article concise, I’ll provide fewer details for this and the following method. The underlying principle in all methods is the same: change the culture to an external focus. While Method 1 creates a new environment with a voluntary focus on external customers, Method 2 establishes an environment where delivering what’s wanted externally is mandatory. Method 2 is straightforward: 2. Senior staff lacking the necessary technical skills or attitudes are replaced with people with the right skills and mentality. 3. Junior staff must adapt quickly or move on. Example: The ABB Merger When Asea and Brown Boveri merged in 1987, CEO Percy Barnevik aimed to create a “federation of national companies” supported by global “free-standing service centres”. He sought staff with “exceptionally open minds… who don’t passively accept it when somebody says ‘you can’t do that’” (Harvard Business Review). One of these free-standing service centres was a new financial services function. This structural and cultural shift shocked the previous Swedish and Swiss company cultures. Many employees lost their jobs and were replaced. New hires in treasury and financial services brought a banking mentality, serving both internal and external customers. Having worked with their financial services division in Asia from 1995 to 2000, I observed that their treasury centres (internal banks) were often indistinguishable from external banks. The transformation succeeded. ABB’s Treasury was considered world-class until the early 2000s when they faced a company-wide black swan event. They still maintain an impressive treasury function today. It’s literally that simple. For the general framework of Method 2, see Appendix 2 in the Treasury for Non-Treasurers (Appendices) article. Method 3: Treasury-led This third method is more niche. While I haven’t seen it used in treasuries, I include it here as it could be appropriate in certain circumstances and potentially deliver more value than the other methods if implemented successfully. This method applies to companies that allocate time to employees…
Nicholas
What’s Treasury’s impact on business performance? (Part 2: Strategic Treasuries)
Introduction Strategic Treasuries – entities that transform treasury into a core driver of business performance In the previous articles, we looked at basic and control-oriented treasuries, short- and medium-term-focus in maintaining solvency and managing financial risks. But what happens when a treasury goes beyond these operational levels? What if they transform into functions that not only manage risks but also actively drive organisations forward, dealing proactively with internal and external stakeholders and contributing directly to profitability and strategic goals? Welcome to the world of strategic treasuries—the rare but powerful entities that transform treasury from a back-office function to a core driver of business performance. As promised in the first article, where we said we’d explain why some treasuries are profit centres, we’ll now explore why certain treasuries make this leap and what impact they have on the organisation. The Evolution of Treasury: From Control to Strategy Strategic treasuries don’t evolve from control-oriented to actively seeking opportunities to add value. The business context forces the change. Let’s start by revisiting the journey of a treasury function. Basic treasury is about managing cash—ensuring that the business can meet its short-term obligations and avoid insolvency. Control-oriented treasuries take this a step further by improving forecasting and applying more professional solvency and risk control techniques, extending their focus from short- to medium-term, using information sourced mainly from other finance functions. Strategic treasuries operate on an entirely different level. These treasuries don’t just manage what’s already there—they actively seek opportunities to enhance profitability, go beyond ensuring solvency to adding value, and align with the organisation’s broader strategic goals. In other words, they transform cost centres into profit centres, directly impacting the bottom line. But—and this is important—they don’t evolve from a control-oriented treasury as a matter of course. The business context outside of treasury forces or opens the door to this change. We’ll talk about this later in this article. Strategic Treasuries and Their Impact on Business Performance If control-oriented treasuries are like the police, handling day-to-day issues, strategic treasuries are like the armed forces, handling unforeseeable, potentially existential financial risks. Being a profit centre is no longer just about creating profits, it’s about proving that the functions are good enough to handle crises, buying the board and giving management time to find a long-term solution So, how exactly do strategic treasuries influence business performance? The answer lies in several key areas: While all treasuries aim to maintain solvency, strategic treasuries focus on long-term financial health. This involves diversifying financing sources, managing complex cash flows, and ensuring that the organisation is prepared for future financial challenges. The result? A more resilient company, better equipped to navigate economic fluctuations and capitalise on growth opportunities. And, think of it another way! The above doesn’t do justice to just how much better they manage solvency. Think of control-oriented treasuries as being like the police – fine for managing problems day-to-day for the foreseeable future. But what about the unforeseeable future! That’s the job of the armed forces. You hope they won’t be needed but you want them there to counter any possible existential problem scenario. You do want them to train every day to be ready, even if you don’t think that scenario is likely. Strategic treasuries are like the armed forces of finance, staffed by more skilled and specialised teams, equipped with better infrastructure and granted the authority to act quickly and proactively. They are there to manage ‘black’swans’—unforeseen material adverse changes. Being profitable is now not only for the sake of increasing profits but, more importantly, to prove to the Board, C-Suite and everyone else that they’re ready to swing into action when needed. After all, if they can’t deliver solvency and make profits reasonably consistently, they’re obviously no good! So a wise CFO, still risk-control oriented, understands that a strategic treasury is not just a profit centre but also an extension of a control-oriented treasury. An extension that now manages unknown as well as known future risks. In a crisis, it buys time for management to find longer-term solutions. Whereas control-oriented treasuries are cost-centres, strategic treasuries contribute to profitability to prove their worth and make sure they’re not a burden on sales and procurement functions, reducing the need for higher core business profitability. By engaging in proactive financial management, these treasuries don’t just control risks—they take advantage of market opportunities to improve returns. Whether it’s by using more sophisticated foreign exchange strategies, better interest rate management, or innovative financial products, strategic treasuries significantly boost a company’s profit margins. Strategic treasuries also improve productivity across the organisation as well as their own. They not only provide value-adding services to internal stakeholders—such as financing solutions for sales or optimising payment terms with suppliers—they also provide systems to interface with internal and external customers, improving service-levels, streamlining operations and reducing costs. The impact is felt company-wide, as smoother operations lead to better overall performance. The most critical role of a strategic treasury is its alignment with the company’s broader goals. Unlike control-oriented treasuries, however, company strategy is affected by the strategic treasury’s strategy and vice versa. This alignment ensures that every decision made within the Treasury contributes to the overall success of the organisation – and vice versa. Types of Strategic Treasuries Not all strategic treasuries are alike. In fact, they typically fall into two broad categories: How can you spot these treasuries? As usual, look for a few key “tells”: Why Companies Invest in Strategic Treasuries Given the complexity and costs of strategic treasuries, and the fact that they are not part of the core business, why do organisations choose to develop them? The reasons vary, but they often boil down to a few key factors: Conclusion Strategic treasuries represent the pinnacle of treasury evolution, transforming what is traditionally a cost centre into a powerful driver of business performance, but also a safety net against unforeseeable financial risks. From enhancing profitability and expanding long-term liquidity (solvency requirements plus excess funds) to improving operational efficiency (productivity) in…
JPMorgan’s AI Chatbot: The Future of Financial Research and Its Impact on Employees
In a groundbreaking move, JPMorgan Chase has unveiled an in-house artificial intelligence (AI) chatbot designed to function as a research analyst. This innovative tool, part of the bank’s broader strategy to integrate cutting-edge technology into its operations, is poised to revolutionize the way financial research is conducted. The Role of the AI Chatbot: A Research Analyst in the Digital Age The newly developed AI model by JPMorgan is far more than just a sophisticated chatbot. It represents the evolution of financial analysis, standing as the digital equivalent of a traditional research analyst. This AI-driven tool is designed to sift through vast amounts of financial data, news, market trends, and research reports at a speed and accuracy far beyond human capability. It can identify patterns, provide insights, and even offer predictions that would otherwise require hours, if not days, of manual research. The AI research analyst doesn’t just compile data; it interprets it, offering insights and analyses that can inform investment decisions. In essence, it performs the core functions of a human research analyst but with the added advantages of scalability and efficiency. This development aligns with JPMorgan’s ongoing efforts to leverage AI to stay competitive in the fast-paced financial services industry. What Does This Mean for Employees? The introduction of this AI-based research analyst raises important questions about the future of jobs within financial institutions. For JPMorgan employees, particularly those in research and analysis roles, this innovation could be both an opportunity and a challenge. A Glimpse Into the Future of Finance JPMorgan’s launch of an AI-based research analyst signals a broader trend in the financial industry. As AI continues to advance, the integration of these technologies into daily operations will become increasingly common. For employees, this presents both a challenge to adapt and an opportunity to innovate. The future of finance is one where human expertise is enhanced by AI, leading to more informed decision-making and a more efficient, data-driven approach to financial analysis. As JPMorgan leads the charge in adopting AI-driven tools, the company sets a precedent for how financial institutions can balance technological innovation with the need to support and develop their workforce. The AI chatbot is not just a new tool—it’s a catalyst for change, redefining the roles of research analysts and setting the stage for a future where human and machine intelligence work hand in hand. Dimitris Bithas, FPWM, Financial Analyst – Eurobank, Comments My view about JPM’s AI chatbot is neutral. It is neither positive nor negative, and the reason is that technology keeps evolving, and its rate of progress increases exponentially over the years. There is literally (and should not be) no one who can prevent technology from going on. So, in our case, are there any jobs in danger? Probably yes. And by that, I don’t mean that a specific role, e.g., research analyst, will disappear, because human factor is always essential in order to interpret data and turn them into meaningful stories, but maybe the amount of people that are needed may be reduced—if a bank needs 10 analysts, with this new technology, due to automation of the tasks, 5 or 6 analysts might be enough. But, there are also some new opportunities for other types of jobs. In order to update and keep the chatbot running properly, the bank may need to hire more people in its IT department, which will create more job placements there. As the time goes by, the jobs in the financial services industry are shifting more to the “IT & Data” field rather than traditional economics—finance, and this AI chatbot is just a similar case. Additional Resources 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 Broken State of Correspondent Banking
Written By:Royston Da CostaMastermind Board Member “The opinions expressed in this article are solely those of the author and not necessarily those of Ferguson.” Introduction Correspondent banking has long been the backbone of cross-border trade and global financial integration. However, having recently experienced what was an inefficient and complex system, I began to scrutinise the system for its vulnerabilities. In this article, I will explore the contributing factors to this, as well as the implications for global finance, and potential solutions for a more resilient and efficient system. Understanding Correspondent Banking Correspondent banking involves relationships between banks, where one bank (the correspondent) provides services on behalf of another bank (the respondent), usually in a different country. This system allows banks to access financial services in jurisdictions where they do not have a physical presence, enabling international payments, trade finance, and foreign exchange transactions. Usually, correspondent banks have a relationship with the respondent bank; however, there are occasions when a correspondent bank may be required to deal with a bank it does not have a primary correspondent relationship with, and this can be very frustrating for the Corporate caught in the middle. The correspondent banking model, which has remained largely unchanged for decades, is increasingly seen as outdated and inadequate for the demands of the modern global economy. This is further emphasised by the 14 days that it took a correspondent bank to return funds that do not belong to them to one Corporate I know. Key Issues Plaguing Correspondent Banking Operational Inefficiencies Correspondent banking is inherently complex, involving multiple intermediaries, time zones, and jurisdictions. This complexity often results in slow transaction processing times, high costs, and a lack of transparency. Payments can take several days to clear (sometimes weeks), with little visibility for customers on the status of their transactions. This inefficiency is particularly problematic in a world where consumers and businesses expect real-time financial services. Moreover, the reliance on legacy systems and outdated technology exacerbates these operational inefficiencies. Many banks, some even consider themselves as global players, still use systems that are decades old, making them ill-equipped to handle the demands of modern finance, such as instant payments, enhanced security, and data analytics. Regulatory and Compliance Burden I recognise that one of the most significant challenges facing correspondent banking today is the escalating regulatory and compliance burden. In the aftermath of the 2008 financial crisis and subsequent money laundering scandals, regulatory bodies around the world have tightened their grip on financial institutions. Anti-money laundering (AML) and counter-terrorism financing (CTF) regulations have become more stringent, with banks now required to conduct extensive due diligence on their counterparties, which is fair, in my opinion. While these regulations are necessary to safeguard the financial system, they have also made correspondent banking more cumbersome and costly. Cybersecurity Threats The rise of cybercrime poses another significant challenge to the correspondent banking system. The global nature of these networks makes them attractive targets for cybercriminals, who can exploit vulnerabilities in the system to commit fraud, theft, or other malicious activities. The risk of cyberattacks has grown as financial institutions have become more interconnected, and the potential for significant financial and reputational damage has increased. As the threat of cybercrime continues to increase, it is incumbent on banks within the correspondent network to invest in appropriate cyber security and ensure they are not reliant on outdated security protocols. Otherwise, this could not only expose them to potential breaches but also undermine the trust that is essential for the smooth functioning of correspondent banking relationships. Consequences of a Broken System Financial Inclusion The broken state of correspondent banking has wide-ranging implications for the global financial system. The most immediate impact is on financial inclusion. As correspondent relationships dwindle, so too do the opportunities for individuals and businesses in affected regions to participate in the global economy. This can exacerbate poverty, hinder economic development, and perpetuate inequality. Inefficiencies and Costs Additionally, the inefficiencies and costs associated with correspondent banking can stifle innovation. Fintech companies and other financial innovators often find it challenging to navigate the complex and costly correspondent banking landscape, limiting their ability to offer new and improved financial services to consumers. A good example of this is the solution for KYC (Know Your Customer), and whereas a number of Fintechs offer excellent solutions for this regulatory requirement, invariably the banks do not have the technology to plug in to the Fintech’s solution. Moreover, the fragility of the correspondent banking system poses a risk to global financial stability. As fewer institutions are willing or able to maintain these relationships, the system becomes more concentrated, increasing the risk that a failure in one part of the network could have cascading effects throughout the global financial system. Potential Solutions and the Way Forward Addressing the problems in correspondent banking requires a multifaceted approach that involves both technological innovation and regulatory reform. Adoption of New Technologies In my view, the adoption of blockchain and distributed ledger technologies (DLT) offers a promising solution to many of the issues plaguing correspondent banking. These technologies can enable faster, more secure, and more transparent transactions, reducing the reliance on multiple intermediaries and legacy systems. Blockchain’s potential to provide real-time settlement and immutable transaction records could significantly enhance the efficiency and security of cross-border payments. Rise of Central Bank Digital Currencies Moreover, the rise of central bank digital currencies (CBDCs) could also revolutionise the correspondent banking model. CBDCs, by offering a digital alternative to traditional currencies, could streamline cross-border payments and reduce the need for correspondent relationships. I recognise that this is unlikely to take place anytime soon, however, it certainly offers a worthy goal to aim for, especially if it eliminates the current experience of a bank being able to ‘sit on funds’ indefinitely with seemingly no accountability to anyone! Regulatory Harmonization and Cooperation To reduce the regulatory burden on correspondent banking, there is a need for greater harmonisation and cooperation among international regulatory bodies, another seemingly impossible challenge! By aligning AML and…
Treasury for Non-Treasurers: A Tale of two Operational Treasuries – Basic and Control-Oriented
A case study: Building a Control-Oriented Treasury out of a Basic One Background: “You want to reduce the chances of losses due to foreign exchange movements; First you need to set up a controlled treasury environment” Once upon a time, I was fortunate enough to have a senior Treasury position in a fast-growing company. My first contact with the company was as a consultant, advising on foreign exchange risk management, part of the pillar we’ve called profitability support (see the 1st article – link below). As the company had become more international, the possibility of significant losses due to foreign exchange rate movements had increased to an uncomfortably high level for management. My advice as a consultant was ‘Fine, you can do this. It makes sense. Treasury functions tend to start when the company has about $ 200 M in sales, and you have that. But having a more active treasury will increase the number and value of financial transactions and associated high-value payments to be done. Your current setup and processes are not well controlled. Frauds and material errors are possible and could become more likely. You first need to change this”. Saying yes would turn their basic treasury into a control-oriented one. They did agree, and I was appointed to set that better treasury up. What did the basic treasury look like? The situation was unsatisfactory both from solvency and profitability support perspectives. When I first arrived, the Treasury function had one employee. He would manage head office’s borrowing and lending needs and provide cash to or from subsidiaries based on monthly reports prepared by the operations (cash forecasts) or as requested. The forecasts were not normally challenged, and it was clear to me from the subsidiaries’ accounts they were sitting on a lot of cash. This was happening at the same time as the company had significant borrowings at the parent level, where the cash could be used to reduce debt, and where the cash was providing no return to offset the inefficient borrowing. The situation was unsatisfactory both from solvency and profitability support perspectives. Everything was seen through the lens of accounting It was also clear that the current Group Treasurer (by title) lacked significant treasury skills and could not influence the CFO to do the basics. One example was that when funds were provided to the companies, no repayment date was set. Borrowings and loans were treated the same way as non-repayable payments and collections (accounts payable and receivable.) Since no date for repayment was set, no foreign-exchange hedging could take place (a specific date for the return cashflow is needed to protect the company against FX risk). But management was fine with this because the accounting treatment on accounts payable and receivable was that they were long-term in nature, not planned to be repaid, and therefore not regularly revalued. Therefore not causing a volatile foreign exchange gain or loss. This was acceptable from an accountant’s point of view. From a treasury perspective, it was not. Providing money at one exchange rate and receiving it back at another would cause a real economic exchange gain or loss. It was a risk that was not tracked and would not show up until it was too late to be managed. We’ll discuss this difference between treasurers and accountants more in a later article. Unlike in this case study, most Treasury and Accounting departments get on well together. However, in my experience, both frequently struggle to explain WHY they are different. It’s important both for accountants and CFOs directly to understand this difference better (CFOs usually come from an accounting background.) It’s equally important for non-Treasurers to understand the differences so that they can get most out of their interactions with each. Note that neither is right or wrong; they are just different, like someone who is Japanese and another American. Nobody should confuse one for the other. Productivity and management strategy impacts were immaterial All of this was typical in a basic treasury. Accounting was understood, while treasury was not. Solvency was not optimised, profitability not supported and productivity and management strategy impacts immaterial. Building the Control-Oriented Treasury How did it go? It was difficult I’d love to tell you that the transition was smooth, but it was not. This highlights why moving to even a ‘simple’ controlled treasury operation is not a no-brainer or easy to implement. It is difficult and helps explain why moving even further from an operational to a strategic treasury is so hard and, therefore, happens so rarely. What went right? People with experience were recruited and efficiently tasked People with experience were recruited. One became the expert in cash management (payments and receipts, borrowing and investing), another in risk management (mostly foreign exchange), a third in interfacing with the subsidiaries over their cash needs and availability, the last with supporting long-term financing needs and internal controls. We selected a global banking partner I managed the team and worked on getting a common bank in place, to achieve automatic visibility over global cash balances, reduced banking costs and a controlled environment. Banks with the right capabilities were asked to present, and one was selected as the global provider. The implementation of transferring accounts from other banks to this one was started. A specialist treasury management system would be bought once the basics were in place It was accepted that a specialist treasury management system would be purchased when we started getting more sophisticated in our FX risk management, the strategic end-goal, by which point automation would be needed to make the function productive more productive and better controlled. Note, in passing, this was in the days when treasury management systems were significantly more expensive than they are now. These days, one of these systems would be co-equal on the shopping list as a global bank. What went wrong? The company culture Showing figures that were different from the accountants’ was taken as an attack on their previously unchallenged dominant position. Several…
Treasury for Non-Treasurers: What is Treasury?
Treasury for Non-Treasurers: Article 1 – What is Treasury? Summary: 4 pillars, simple but with massive implications.
Visa Expands Digital Wallet Capabilities with Seven Key Payment Innovations
Visa has recently expanded its digital wallet landscape, focusing on seven key payment methods to enhance security, convenience, and integration within its ecosystem. Here’s a detailed explanation of these methods: Recommended Reading: 1. Tokenization This method replaces sensitive payment information, such as credit card numbers, with a unique digital identifier or token. This token can be used to process payments without exposing the actual card details, significantly reducing the risk of fraud. Visa’s implementation of tokenization is designed to protect user data during online and mobile transactions, making it a cornerstone of their digital wallet security strategy. 2. Virtual Cards Visa has integrated virtual card technology into its digital wallet offerings, especially for business-to-business (B2B) transactions. Virtual cards are digital versions of physical cards that can be used for secure and controlled payments. They are particularly useful for corporate expenses, allowing businesses to manage and track spending more efficiently. The expansion of Visa Commercial Pay, which includes these virtual card solutions, highlights Visa’s commitment to modernizing B2B payments. 3. Biometric Authentication Visa is leveraging biometric technology, such as fingerprint and facial recognition, to enhance security and user convenience. This form of authentication ensures that only the authorized user can access and use their digital wallet, providing a higher level of security compared to traditional passwords or PINs. 4. Mobile Wallet Integration Visa has expanded its digital wallet capabilities to integrate with popular third-party mobile wallets like Apple Pay and Google Pay. This integration allows users to store their Visa cards in these wallets and make payments using their smartphones. This seamless integration increases convenience and broadens the use of Visa’s digital payment solutions. 5. Contactless Payments Visa supports contactless payment methods, which allow users to make transactions by simply tapping their card or mobile device near a payment terminal. This method is quick, secure, and particularly useful in environments where speed is essential, such as public transportation or retail stores. The adoption of contactless payments has surged, driven by consumer demand for faster and safer payment options during the pandemic. 6. Cross-border Payments Visa is enhancing its capabilities to facilitate cross-border transactions, making it easier for users to make international payments. This includes optimizing exchange rates and reducing fees, thus providing a more seamless and cost-effective solution for global transactions. Visa’s efforts in this area aim to support the growing need for international e-commerce and global business operations. 7. Embedded Finance Visa is integrating financial services into non-financial platforms through embedded finance. This means that payment capabilities are built directly into various digital platforms, such as ride-sharing apps or e-commerce websites, allowing users to make payments within the app without needing to switch to a separate payment service. This integration streamlines the user experience and increases the efficiency of transactions. Based on these payment innovations introduced by Visa, we thought it would be valuable to get perspectives from Treasury professionals Royston and Lorena, who are also Treasury Mastermind Board members. Q: What is the impact of these new advancements on treasury? Which methods do you see as most relevant and impactful for treasurers? Should treasurers take action now on any of these? How about fraud? Royston Da Costa, Assistant Treasurer at Ferguson, Comments Apart from the first point, Tokenization (and that appears mainly for Consumers), there is nothing new in what Visa is proposing! There are a number of digital wallets already offering these services and some even offer virtual bank accounts…! In terms of the questions you asked: Fraud – any initiative offering greater security will be most welcome by most Treasurers, and this should be the aim for ALL Financial institutions i.e. not a nice to have for Corporate but a necessity! Most attractive to Treasury: (i) Virtual cards are a huge hit, especially for our business in the US; (ii) Embedded Finance could prove quite promising especially for our customers wishing to pay us using our online platform. Lorena Pérez Sandroni, Head of Treasury at PayU GPO, Comments Indeed, I agree with Royston comments, we saw VISA publications and I like to see as many times as possible for them to cover the services we do have partnerships with them. However, we can’t treat this publication as something innovative or making the impression is VISA the pioneer, the products are developed and being offered already. Regarding Fraud initiative comment , the upcoming change in regulations is supposed to take all Fintech companies to make sure the data is secure (PSD3), however as Royston pointed out it is a must. 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.
Introducing our Treasury Masterminds Board
We are happy to announce our Treasury Masterminds Board members, a panel of leading corporate treasury experts from around the world. This esteemed group will lend their deep domain knowledge and years of practical experience to guide and enrich the content and events we provide, give insights on treasury topics and discussions, and provide answers to questions in our treasury community. The Treasury Masterminds come from diverse backgrounds, geographies, and industries. But they all share a passion for treasury management along with track records of excellence and innovation in the field. We will frequently call upon their expertise through: Treasury Masterminds Board members Benjamin Defays Benjamin landed in Treasury by chance about 12 years ago, and it quickly became his passion. He started my journey with a CAC40 company, then switched to the largest private company in the US, and now he is with the world’s largest alternative asset manager. This gave him the opportunity to take part in 3 TMS implementations plus one for a trade finance platform, being in charge of FX risk, liquidity management, and solutions implementation with various cash pooling structures, trade finance activities, credit and collection management, but also automation activities such as RPA and various workflow tools to help monitor activities and measure performance, with managerial roles at different levels. He has been a board member of the Association of Corporate Treasurers of Luxembourg (ATEL) for several years, in charge of education and the sustainability of the Treasury function. He teaches and co-founded various Treasury Management training programs Sebastian Muller-Bosse Sebastian is a young treasurer with a passion for treasury and technology. With experience in both banking and corporate treasury, he has transitioned into treasury consultancy and interim management, bringing a unique blend of expertise to his work. Dedicated to spreading knowledge and creating awareness about corporate treasury, Sebastian is particularly focused on reaching students, graduates, and young professionals. His tech-savvy approach and commitment to automation make him a valuable resource in today’s rapidly evolving financial landscape. Patrick Kunz Patrick is the founder and treasury consultant at Pecunia Treasury & Finance BV. A boutique treasury consultancy firm based out of the Netherlands. Servicing clients in the Benelux, Germany, Nordics, and wider EMEA. Patrick has seen more than 30 treasuries, from big to small, from profit to non-profit. He has 25 years of experience in his 15-year Treasury career. Patrick is both interim manager and consultant and also has a wealth of tech knowledge, having led several TMS, Payment Hub, and FX Hub implementations. Pecunia’s unique concept of working with 80+ freelancer associate interim consultants means they always have a suitable treasury, data, corporate finance, or cash management expert in their ranks at a competitive price. Jessica Oku Jessica is a Treasury & Finance Executive with over 12 years’ experience in Strategic Treasury, Banking and Finance, working for top banks and multinationals. With a proven track record of developing innovative financial strategies and optimizing portfolios for multi-million-dollar enterprises. Throughout my career, she has developed and executed initiatives that have redefined success and driven remarkable results. From optimizing the capital structure of a beverage multinational that led to savings of over $1 million to strategic negotiations that resulted in a 40% decline in finance costs, structuring diverse funding and debt instruments and derivatives, transforming individuals into product experts, achieving process efficiency across different strategic business units, and negotiating 5-year tax waivers on business pioneer status, her commitment to excellence is unwavering. Jessica has a passion for coaching talent and teams to drive transformational organizational change. She is currently driving impactful change as the Director of Fund Development at Women’s Health Coalition Alberta, Canada. She received an award in 2021 for the Professional Achiever’s Award 2020 (Business Outstanding Performance Award). Alexander Ilkun Alex is passionate about allowing companies to focus on developing their businesses. He achieves this by implementing best-practice Treasury processes, empowered by automation and visualization. Alex has been a regulator speaker at Treasury conferences regarding wider Treasury-related and emotional intelligence topics. Tanya Kuznetsova Tanya is Director of Treasury and Cash Cycle Transformation at Baptist Health Care, based in Florida, where she is responsible for implementing the best practices in cash management, working capital optimization, reducing costs associated with treasury operations and attracting capital. She has 20 years of treasury management experience in a variety of industries around the globe: transportation, retail & wholesale, and healthcare. As a treasurer and an independent consultant, Tanya has integrated technology advancements and improved processes into organizations of varying sizes, including non-profits under $1 billion and a $22 billion retail business with 13,000 stores. In addition, she advises high-tech companies on projects involving the newest technology applications in finance, such as AI, machine learning, and APIs. She holds the professional designation of Certified Treasury Professional. She is an award winner recognized for her achievements in implementing supply chain finance solutions. Tanya served as president and is currently a board member of the North Carolina Treasury Management Association. She contributes to the professional community as an educator and a speaker. She is the author of “Alice and the Treasury Island,” a book about career development and professional growth, as well as a number of online courses on fintech and digital assets. Royston Da Costa Royston is a Certified Treasury Professional (CTP) and an affiliate member of the Association of Corporate Treasurers (AffilACT). He has over 36 years’ experience working in Treasury. 21 of which he has had as an Assistant Treasurer at Ferguson, a NYSE (primary) and FTSE (secondary) listed company. He has extensive knowledge and skills in treasury technology, automation, foreign exchange, cash management, and international payments. Royston is responsible for the UK intercompany loan portfolio and continues to drive forward the group’s strategy on Treasury technology. He worked at Sky, Gillette, PolyGram, Seagram, and Vivendi Universal. Royston is a regular speaker at international conferences, focusing on Treasury technology. He is passionate about implementing Treasury best practices and enhancing financial and operational efficiency. James Kelly James Kelly is an accomplished senior finance executive with deep…