EuroFinance 2014: Disruptive Innovation on Treasurers’ Minds

As the EuroFinance 2014 treasury trade show came to a conclusion on 17 October a selection of attendees shared their views about the key themes and treasury concerns with gtnews.

The head of the Hungarian treasurers’ association Tamás Ónody, group treasury director at Wallis, said that he was very pleased to have welcomed his treasury colleagues from across Europe to the show in his home city of Budapest. “I think disruptive innovation from technology, regulation and new organisational and business models have all been key themes at EuroFinance 2014 with the emphasis very much on how to solve these conundrums. I hope the attendees have found some answers.”    

Group treasurer at India’s Bharti Airtel, Harjeet Kohli, was more concerned with disruptive innovation and particularly the standards that he believes are necessary to knit together disparate new technologies or regional practices. “You won’t innovate by relying on standardisation and cooperation committees. Formats like XML ISO 20022 are important as they can help integrate treasury operations cross-border and deliver the desired reliability, but standards aren’t a replacement for innovation [as some at the show seem to think].”  

According to Jennifer Boussuge, head of global transaction services, EMEA, at Bank of America Merrill Lynch, one of the main topics at this year’s trade show was standardisation and simplification, although she did say that there was clear frustration among some of the corporates she met, “that we’re not further down the regulatory compliance path”.    

“SEPA in particular was a concern in that treasurers still have 19 different flavours of XML to deal with cross-border in Europe,” she said, adding that there is also a feeling that the phase one compliance tick aspect of the payments harmonisation drive has been achieved but that phase 2 dedicated to actually getting the value out of SEPA and ensuing true cross-border harmony is still to come.  

SWIFT’s Neil Gray, corporate business manager, EMEA, thinks that more and more corporates are using the XML ISO 20022 standard, partly driven by SEPA, but also other global initiatives like the BPO trade finance electronic letter of credit. “XML is getting greater traction among finance professionals and it’s not as imperfect as some would have you believe,” he said. In regard to SEPA he added that there might be good reasons for the national exceptions that have delayed the hope for full integration across the national European payments landscape so far, with tax reporting issues and other national complications in Italy and elsewhere impeding full harmonisation. “Our MyStandards tool can help here,” he claimed, explaining that banks can publish their standards there to aid connectivity and interoperability in order to help corporates.  

Gunther Peer, director of client relations at treasury management system (TMS) vendor Reval noted that Excel spreadsheets are still too prevalent in the treasury workplace with all the associated data entry and lack of integration and connectivity concerns around that. But he’s not concerned, and added “I’ve also noticed a new vendor entering the treasury technology marketplace in the form of Bloomberg so I by no means fear a monopoly in this space. It’s still too early to assess Bloomberg’s newly launched system but they’re clearly trying to link their existing trading and data services platform with its risk management functionality to a treasury solution. It’ll be interesting to see how they progress.”  

More Viewpoints From The Exhibition Floor

Lloyds Bank’s new head of commercial banking, Europe, Farouk Ramzan, an ex-bond specialist and head of capital market origination at the bank, perhaps understandably is interested to see that capital market funding for corporates “appears to finally be coming to Europe”, aping the US situation in this regard.   

For Stephane Curcio, senior consultant, northern Europe, Kyriba, one of the hot topics at EuroFinance 2014 has been electronic and non-electronic bank account management (eBAM) and fraud has been a big issue too. “For corporates though it’s not only Know Your Customer (KYC) that is one of the key requirements, but also Know Your Bank (KYB).”   

One of the concerns for Beniot Desserre, global head of payments and cash management at Societe Generale, is that when financiers spend so much money on regulation, there isn’t so much left for innovation. “Electronic bank account management (eBAM) for instance has had to take a back seat for a couple of years as SEPA and other compliance activities have taken centre stage, but I believe it will come back. I’ve heard it discussed here again and I think it’ll come back in 2015 as eBAM connects everything up integrating treasury, banks and operations.”  

Deputy head of transaction banking, merchants, at SEB Paula da Silva thinks that cryptocurrencies’ appearance on EuroFinance presentations list is an interesting development and fitted the show’s over-arching disruptive innovation theme. “I’m very interested in Ripple for example and think such technologies will eventually move to the centre ground.”  

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