November 2017

Clarissa Dann reports on EuroFinance 2017 in Barcelona, where treasurers talked about simplifying their operations with dynamic treasury management systems and centralised operations – and how they see banks as strategic partners

Despite the political tensions surrounding the Catalonia/Spain secession protests, EuroFinance 2017 took place in Barcelona with no adverse effect on what was a successful event attracting 2,200 delegates from all over the world. This was its 26th iteration with the theme of “intelligent treasury” referencing the latest analytics and technology, along with the prospect of routine ‘robotic’ task automation. As noted in the ACT Annual Conference in Manchester, corporate treasury roles are becoming more strategic as they advise executive committees on cash management strategy and tactics. Being freed from routine tasks by evolving products and services along with the opportunity to mine Big Data from their transactions has played a huge part in bringing this about, and the speaker line-up in Barcelona very much reflected this.

Disappearing national debt


Dr Pippa Malgren questions central bank line on inflation to a packed auditorium

“Everywhere in the world we hear central banks saying the inflation target is too low, I think we should raise that,” said Dr Pippa Malmgren in a thought provoking talk on the first morning (4 October 2017). “We have a gap between what central banks tell us is the official inflation rate and what people are experiencing (rising rent and grocery bills),” she elaborated, reminded delegates that economies staring at unacceptable levels of national debt prefer to inflate it away, rather than risk default or vote-losing austerity. “The world has three times as much debt than it does GDP,” said Malmgren.

Centralisation and room to grow

The stream sessions provided snapshots of what is keeping treasurers awake at night and this year’s line-up did not disappoint. During the course of the first morning we heard from large organisations grappling with efficiency realisation and centralisation, as well as high-growth “young” companies planning for the future.

True centralisation of all core treasury processes is a state that is less than straightforward to achieve – a point made by BAT’s Philip Stewart in an article for Deutsche Bank’s flow magazine – and we heard some of the pain points from three more corporates.

Left to right: Steven Gomes (Bose Corporation), Stian Kjoleesdal (Statoil) Cathy Fields (Hitachi Vantara)

Cathy Fields of Hitachi Vantara, Tor Stian Kjollesdal of Statoil and Steven Gomes of Bose Corporation shared their very different experiences. SAP, the enterprise resource planning (ERP) system makes it possible for Bose Corporation to see their cash positions quite quickly and how each country in the group is investing surplus cash. However at Hitachi Vantara, the ERP was not set up to process in real time and “visibility is a challenge”, said Fields. Statoil is getting enhanced technology with better interfaces and is prioritising the import of live data into their system – the centralisation making this possible in a way that it wasn’t before. But, said, Kjollesdal, “Our question is how we get the data from the banks.” All agreed that using SWIFT reporting and robotics would be enormously helpful.

High-growth companies face the same problem of transitional technology as many other treasuries but multiplied by the need to build in capacity for expansion – the early days of Excel spreadsheets being somewhat behind them. Patrik Hallerstrom of Spotify said that he was implementing the Kyriba treasury management system (TMS) because they “needed a system that could handle global payments, that was cloud-based, and scaleable”. It was implemented in different phases, and they rolled a hedging programme out in 2016. Jori McCuskey of Symantec confirmed his company had a limited implementation of Kyriba for consolidating bank accounts but realised they needed to take it to the next level. “The most important thing for us is being able to get visibility of our net pool position so that we can manage the FX risk,” he said. Doug Trapp of the Priceline Group made the point that most of his cash is generated offshore and the pooling structures need to accommodate the variety of currencies in the pool.

Consolidation and harmonisation

In a session called ‘Have you tidied up your banks yet?’ it became clear that not all treasurers want to rationalise thousands of bank accounts down to a tidy few. Romain Douady, Corporate Treasurer of French beauty product retail giant Sephora and Deutsche Bank’s Paul Cuddihy (Director, Working Capital Advisory EMEA), reflected with delegates on how the mix of store-based and web-based revenues means Sephora’s corporate treasury has to be very agile – transaction cycles are very short. The retail industry, said Cuddihy, is one of the most difficult to standardise and centralise partly because of this – unlike other higher margin industries, more used to multi year payback periods (such as pharmaceuticals).

Douady explained that Sephora has 1600 different bank accounts (one per store) with no intention of reducing them – it is easier to identify the store and manage its balance sheet this way. Each one is linked to SAP with a Swiftnet connection. Cash and payments are moved between the relationship banks according to the relationship. “We value a bank relationship when we have a problem and the people on the other side of the table take care of us. You need to know your bankers, the way they are structured and a big part of the process of selection is the way we are treated, rather than cost related.”

When asked to comment on how he prioritised working with regional or global partners, he made the point that in many countries, Sephora has to work with the local banks “because there is no choice” when it comes cash management, but it does have to be on SWIFTnet. Sometimes a global bank may “help out” with FX services, but once the relationship is formed, Sephora sets about making that relationship “as strong as possible”.

The Deutsche Bank sponsored Relax and Recharge area

One of popular areas on the exhibition floor turned out to be the Deutsche Bank-sponsored Relax and Recharge Zone where you could collapse into comfortable sofas, charge your portable devices and even enjoy a neck and shoulder massage from the on-site therapists. But it was here that I found myself talking to Rob MacAnally, Group Treasurer of Associated British Foods, and hearing that his pain point was managing commodity and currency risk because of all the soft commodities in his supply chains. This was explained in more detail at his session. ‘Singing the same tune – why treasury and procurement need to be in perfect harmony’. It was here he took delegates through how he implemented their treasury management system – using OpenLink as the vendor.
Interestingly the proof of concept prior to adoption indicated that the budget needed to be increased and the deadline extended, the learning point being that a project of this magnitude has to go through that stage. What was he looking for in the TMS? “IT security, controls, cash management and banking services, the ability to manage currency exposures and interest rates, and to account for treasury-related transactions,” he said. In other words, it had to be fit for purpose now and in the future. “We also wanted a platform capable integrating financial and commodity risks” as MacAnally is responsible for reporting this each month. This means having very close collaboration with the procurement function in the businesses. The new TMS has been in place for 18 months and is used to help with EMIR compliance and rolling out IRFS9 hedge accounting adoption across the group.

Trade, fintech and blockchain


The four trade and fintech muskateers

Full digitalisation of trade finance – in other words where entire processes are rethought rather than existing documentation such as bills of lading and invoices just digitised – remains somewhat out of reach, and this is clearly frustrating some corporates.

In a packed panel session that closed the first day (‘Trade and Fintech’) Aite Group Senior Analyst Enrico Camerinelli deftly moderated the juxtaposition of corporate enthusiasm, fintech creativity, and bank rationality and trust.

Corporate treasurer Ignacio Sanchez-Miret of HM Group said, “We need a digital solution. It is not logical that I can do everything with my mobile phone as an individual and nothing in my treasury.” He said that he had seen some fintechs working with corporates but a bunch of blockchain proofs of concept was not the answer – there is more to digitalisation than blockchain. 

Michael Dietz, Deutsche Bank’s Head of Trade Finance Flow reassured delegates that banks are just as passionate about finding solutions as fintechs but being “bound in real economy issues, cannot afford to compromise safety and soundness”. “When you think about blockchain delivering data on a secure basis you have to have global counterparties and the rules of all banks apply”, he said. While all agreed that trade finance absolutely lends itself to digital processes, this is not going to happen overnight.

David O’Rourke, Group Trade Finance Manager of Irish dairy corporate Ornua observed, “We need security and confidentiality – those issues have to be battened down first”. It fell to the former banker turned fintech, Dani Cotti (CFO, TradeIX) to sum up the current state of play. “The flexibility of the technology is much bigger than is appreciated, and by not doing anything nobody learns anything.” Everyone wants a single platform that will work with the solutions already in place and integrates with other solution providers, said Cotti. Panelists agreed such a platform would need to provide access to distributed ledger technology to store and analyse data securely – a theme that was developed a week later at Sibos.

The following morning, Simon Taylor, (formerly at Barclays and now co-founder and Director of Blockchain 11-FS) picked up the blockchain baton in his talk, ‘The year that blockchain comes of age’. ““We believe that digital is only one percent done and we are here for the other 99%”, he declared. Wasting no time in sharing how while he was at Barclays, the bank made a trade finance transaction on a blockchain for £100,000, he said the technology’s purpose should be “to solve a problem for a client”. There are four areas, he said for growth in distributed ledger technology. Trade was one of four areas he outlined deploying distributed ledger technology (the others being capital markets, IoT/Energy, payments/FX). Trade, he expanded, was moving from proofs of concept (PoCs) to pilots although key questions about integration and interoperability and timing remained. He walked delegates through the “three horse race” (Enterprise Ethereum Alliance, R3 and Hyperledger) all of which default to open source so no obvious vendor has emerged. Simon went on to discuss trade finance and supply chain finance scenarios where the transaction could be tracked all the way through on a digital platform. While it is not yet real and you cannot buy this solution now, “wait another two years and you will see trade finance on the blockchain,” he predicted.

Third party risks in the cyber-age - the known and unknown

Left to right: Greg Day (Palo Alto); George Zinn (Microsoft); David Watson (Deutsche Bank); Vicky gavin (The Economist); Robert J Novaria (Treasury Alliance Group)

This session discussed in more detail the practical applications of the findings of the Deutsche Bank-sponsored EIU report launched on 4 October 2017. The special Deutsche Bank website housing the downloadable research report, summary articles video and infographic can be found here.

Greg Day, VP and Chief Security Officer EMEA at Palo Algo Networks (a security vendor) together Microsoft’s George Zinn and Deutsche Bank’s Global Head of Digital Cash Products David Watson together with Vicki Gavin, Compliance Director and Head of business continuity and information security at The Economist discussed how important it is to educate employees, an organisation’s weakest link when it comes to cyber-security, to become gatekeepers. “The weakest link is everyone is in this room, it’s human beings. Having people in control of the technology to control the risk is an additional risk” said David Watson.

While PSD2 is doing “a fantastic thing opening up the market place by ensuring FIs have API capability” it means, he said, that in theory a bank does not have legal accountability and liability for what happens to client data after it has left the API “door” to the corporate treasurers nominated partner/fintech, which confers a new set of responsibility on corporate treasurers.

March of the machines, Big Data, and who will be here tomorrow?


Artificial Intelligence (AI) could be deployed to remove the routine tasks from the treasurer, allowing the role to develop into more strategic directions. Or, is there a risk of role obsolescence? In a lively session entitled ‘Will treasury be freed or terminated?’ George Zarkadakis, Digital Lead, Willis Towers Watson and Adam Rutherford, a genetics scientist advising on AI and robotics in the film industry said that public perception of robots and AI has been shaped by films – where most show the takeover and destruction of humans by robots.

Despite the friendliness of the robot that greeted us at exhibition hall entrance (pictured), the presenters had a task on their hands explaining how there would be advantages in automating repetitive and number crunching tasks such as document reading, text mining and data mining, and developing further those talents that could never be automated such as relationship management, one-off specialist tasks, bespoke scenario analysis and understanding what the data means in practical terms for a business. "Self-awareness is still mysterious and maybe is the last bastion of humanity AI cannot conquer", reflected Zarkadakis. The potential to use robotics to invest short-term surplus liquidity in approved instruments and tenures was also something that rumbled on in informal conversations.

Data is the new oil

As technology provides increased speed and transparency, financial services providers are looking at new sources of value addition. The ability to extract and interpret data within an organisation to improve a business process, provide cost savings or innovate is already becoming a source of competitive advantage. The mantra “data is the new oil” reverberated throughout EuroFinance and again at Sibos Toronto, but who is best placed to drill and refine it?

Consultant Chris Wigley (QuantumBlack is part of McKinsey) unveiled the six ‘Vs’ associated with extracting meaningful Big Data value in his session ‘What big data really means’. These are: Velocity, Volume, Variety, Veracity, Value, and Vulnerability. He walked delegates through “dark data”, the “stuff we don’t think of as data that is latent that we can now tap into in a number of ways". One problem solving story he shared was how in a mining company they were trying to reduce machine belt downtime for repairs. An hour of up-time for mining machine belts is worth US$100k. Sensor, weather and geology data was analysed together with data of which engineers were working on the machines together with what time and when they skipped maintenance schedule. It turned out that when managers were not checking, operators skipped maintenance with inevitable consequences because they were not paid when the belts were not running. “We love these little human stories among the data”, he said. A big industrial company said they had surplus cash on the balance sheet and wanted to get the A/R number down. Classified interventions were analysed to find out which accelerated or slowed down a process (in this case getting invoices paid). “Getting that clear line from data to reality which takes real work”, he said.

Tomorrow’s transaction financiers

Futurist Brett King is no stranger to EuroFinance and made a stark declaration that “If you have the mentality of being a fast follower, this is the biggest risk to your business. By the time you have decided to follow it is too late”. He continued, “The biggest financial institution in ten years’ time is not going to be a bank”, citing the problem of looking to iterative change, to use Henry Ford speak, “building a faster horse” to grow businesses. Although the context was entirely retail – with recommendations banks embedded their platforms in Uber and AliBaba to get wallet share, this did have implications for how SME businesses might be served – a theme that King developed from Simon Taylor’s earlier talk on how a large corporate could provide trade finance to a previously cost/risk prohibitive SME using the blockchain. “Not the product, not the network but the experience that is responding to your behaviour as a business or an individual is the key”, said Brett. “Experiential financial services needs new skillsets”, he said.

The takeaway from this was that relationship management in transaction banking is more important than ever as clients will look for new sources of value from their banks once technology delivers greater visibility of transactions and fee structures. Big data-driven insights and added-value consulting are good places to start, it would appear. Treasurers were somewhat bemused by all of it but there was definitely a hunger for solutions that delivered transparency and improved automation of routine tasks. Encouragingly, the value they placed on a proactive and supportive relationship with their bank was significant - the human touch seems to be alive and well – for now.


The 26th Annual Conference on International Treasury Management from EuroFinance was held 4-6 October 2017 in Barcelona, Spain where Deutsche Bank was an official sponsor. Next year, the event will be held in Geneva, Switzerland, 26-28 September 2018.

Photographs are courtesy of Eurofinance in addition to Deutsche Bank social media images

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