Not surprisingly, risk was the most discussed topic at this
month’s EuroFinance 2013 conference in Barcelona. As market volatility has
significantly increased risk awareness over recent years, treasurers and chief
financial officers (CFOs) have “put on the risk-tinted glasses,” more often
trying to better understand and manage risk in its variety of forms.
As there is a trend towards looking at cash and risk holistically, liquidity
was the first risk that was cited by treasurers when asked about their
priorities at the conference. Going deeper into conversation, other exposures
such as foreign exchange (FX) risk, counterparty risk and commodity risk
followed the liquidity concerns.
This makes sense. As companies
continue to expand internationally, the complexity in cash, liquidity and risk
management increase as well. As risk is highly interconnected, it´s becoming
harder for the treasury team to keep an overview of every bank account, bank
partner, currency or subsidiary that is added. Finally, there comes a point
when auditors start asking about workflow controls and questioning data
reliability. It’s then that treasurers realise that operational risk has not
been on their radar, but probably should have been.
Twilight of the Spreadsheet
There was consensus
in Barcelona that spreadsheets probably will never disappear in treasury, but
it was clear from what organisations are doing, growing and operating
internationally, that those simple tools will no longer provide the finance
professionals with a reliable data basis. Many organisations represented at the
conference were looking for technologies to manage treasury and risk together
and for solutions that are easy to roll-out in their growing, global network.
Specifically, they were looking for treasury technology that is
flexible and adaptable to new market requirements, built on technology that is
easy to integrate with internal and external systems, and tools for running the
analysis and reports their CFOs have started asking for.
technology providers, which provide a software-as-a-service (SaaS) treasury and
risk management solution, were busy discussing treasury transformation,
centralisation, automation and integration as well as the benefits of SaaS
technology with interested treasurers.
Last, but certainly not
least, finance professionals were discussing upcoming regulation such as the
single euro payments area (SEPA), International Financial Reporting Standard
(IFRS 13) and the European Market Infrastructure Regulation (EMIR). From a risk
management perspective, non-compliance is another type of exposure that has to
be considered in a holistic approach to treasury and risk management.
As many treasurers still have not started their implementation projects
despite the fast-approaching 1 February 2014 migration deadline, SEPA and
possible contingency plans probably were the biggest worry among the conference
delegates. Workarounds could be, for example, automating the generation of
business identifier codes (BICs) or using conversion services to produce
extensible markup language (XML) messages enriched with the necessary data.
Additionally, smaller consultants were offering SEPA rescue services for
Most treasury professionals in Barcelona
were aware that workarounds and refusing to implement SEPA can only be
temporary and probably very expensive solutions and need to be replaced sooner
rather than later. Thus, many of the sessions really looked beyond SEPA. How
can payments be optimised? Which payments concepts should be used? Should the
bank portfolio change? These were among the issues tackled.
also discussed with attendees, as year-end reporting approaches, how treasurers
will shortly be confronted with the new credit value adjustment (CVA) and debit
value adjustment (DVA) calculations required under IFRS 13 soon. The main
providers offer an outsourcing service, combining expertise and an SaaS
solution, to help companies with valuations and hedge accounting.
EMIR deadlines and requirements still seem to be floating and subject to
constant change. But one thing was sure: EuroFinance´s Barcelona conference as
a whole proved that reducing complexity has become the treasurer´s new
paradigm, and modern technology is increasingly considered as an enabler to
better understand and disentangle the complexities of an unstable environment,
new regulation, financial processes, global collaboration, analysing and
We have been witness to a series of significant security events recently around payment execution, from Leoni in Germany through to ABB in South Korea and SWIFT in Bangladesh to name a few of the major headlines.
The revised Payment Services Directive regulation, regarded as one of the most disruptive in Europe’s financial services sector, will begin to make an impact on January 13, 2018.
The cost of compliance efforts for banks has increased exponentially in recent years. This is especially true for those banks that are active in the global trade finance domain, where the overwhelming expectation is for compliance requirements to become even more complex, strict and challenging over time.
Global trends, technology and the role of the treasurer in 2025 were hotly debated by treasurers at this year’s Treasury Leaders Summit in London. A focus on technology and automation was universal, others argued over the impact of macroeconomic and global trends on treasury.