While Merck’s treasury team has steadily expanded since the arrival of Bruns and Bermüller – it numbers 32 financial professionals currently – it remains a relatively small department within a company of nearly 55,000 employees.
“I’d say that treasury today is far more about dealing with the company’s internal projects and processes than dealing with banks and other financial market participants. The former now accounts for around 80% of my time,” adds Bermüller.
He reflects on how the IT part of the business also “occupies a growing part of my working day and that of the team” as they all look to make the most effective use of big data, IT processes and standardisation. In line with its peers, Merck is assessing how best to deploy new emerging technologies over the coming decade.
“We’re already employing robotics in our treasury operations and AI will increasingly be a driver over the years ahead,” predicts Bermüller. “At the same time, it’s not the solution to everything. As it undergoes further refinement, AI can be the replacement for repetitive tasks that follow certain rules. It isn’t yet there for the more complex solutions, although that will come over time.”
The treasury team uses application programming interfaces in reaching out to Merck’s relationship banks to gain more data and have a deeper analysis in areas such as payment types. But ultimately, the company wants the ability to own its own digital boardroom. “For the time being though, I’m more of a believer in big data management and analytics,” Bermüller says. “This is the route that is leading to the day when we can employ process mining to identify where all treasury’s roadblocks are.”
Although consumer habits are steadily fuelling demand for instant payments and penetrating the B2B sector, this is one area where Merck has been less proactive. “They [instant payments] have yet to play a major role within our business outside of the life sciences division, where instant payments are sometimes connected to logistics and mostly when the delivery of goods is expected within 24 or 48 hours,” confirms Bermüller. “It’s something we’re looking into for this particular business, but it’s not a top priority as we’re not a retailer. We also recognise the risk of fraud when a payment is made instantly and it’s then too late to be retracted. So a payment period of, say, 30 days does have certain advantages.
“We have to be vigilant about preventing fraud, which is increasingly a risk for all businesses. The starting point of fraud is the human interface, so as well as making sure your people are aware you have to ensure that all of your systems are secure. We see the roll-out of our payment factory as a means of combatting fraud. It’s all about awareness and keeping one step ahead of the criminal – even voice recognition is no longer a foolproof system.”