Rent a Treasurer – Joint Venture treasuryXL & Treasurer Search

| 29-07-2020 | treasuryXL | Pieter de Kiewit

Organisations with treasury exposure, without the expertise. The ones of you who know me longer, know this is one of my favourite hobby horses. For a longer period of time I have been tinkering with many plans to help the aforementioned organisations. This led to contributions to treasuryXL as a community and educational institutes like the Hogeschool Utrecht and the Vrije Universiteit. Now we will work on the obvious: bringing highly skilled treasury interim managers to organisations without a treasurer.

Impact on SME’s

Treasurer Search has a long and solid track record in finding interim treasury managers to large organisations with a corporate treasury function. One of our team members reaches out on a continuous basis to these managers to ask them about their availability, skills and preferences. Many of these managers love to work in smaller size organisations. There they can have real impact, save costs, mitigate risk and create opportunities.

Target audience treasuryXL

One of the important target audiences of treasuryXL is the group of CFOs, group controllers and entrepreneurs who, consciously or not, deal with treasury topics. In the content distributed on the platform the following is taken into consideration: non-technical treasury information on a regular basis with a clear upside-story. The communication channels that are used are also the ones that hardcore treasurers might not tune into but other financials do.

Rent a Treasurer

All the pieces of the puzzle have been on the table for a long time. The plans have been there for a long time and now we will act. As Ben Tiggelaar states: “the gap between plans and success is action”. Through treasuryXL you can “rent a treasurer”, click the link for more information about the concept.

Thank you,

On behalf of Treasurer Search, Pieter
On behalf of treasuryXL, Kendra

 

 

Pieter de Kiewit

Owner at Treasurer Search

Meet our Experts – Arnaud Béasse

28-07-2020 | Arnaud Béasse | treasuryXL

Welcome to the 10th and last (for now) interview of the ‘Meet the Expert’ series. This time we interviewed our brand new Expert Arnaud Béasse. Arnaud is founder of the advisory firm Arts+Brands and an expert in Debt Management. He started his career as Regional Financial Controller, cumulating the responsibility for IT.

Arnaud has more than 17 years experience in Banks focusing successively on Structured Asset Finance, Corporate Banking, DCM and in Multinational Corporates for their Energy and Metals trading and Project Finance. He created Arts+Brands to expand his entrepreneurial spirit by advising small ventures and start-ups (Fintech, Biotech, IT) for their Fund Raising and Finance strategy and also by getting involved in the daily operations.

Arnaud is fluent in English, German and French and is used to work in international, multi-cultural and virtual teams environments.

We asked him 11 questions, let’s go!

How did your treasury journey start?

During my first assignment as a regional financial controller, I have been immediately confronted to a complex consolidation of cash streams from different emerging countries with different currencies and regulations. Finding secure and systematic solutions has been challenging but also interesting and fun. This was the beginning of my treasury discovery, from which I moved then to asset finance, project finance, trade and export finance and later to the complete « corporates and markets » solutions offered by a large European bank.

What do you like about working in Treasury?

I find the central role played by treasury in supporting a business very motivating: it manages all financial resources a business needs to generate returns. Perfect understanding and anticipation of the needs (planning) and an accurate analysis of the resources available (controlling) are therefore essential. I also like the necessity of combining short term priorities like cash management and long term planning like investments.

What is your Treasury Expertise?

Capitalising on my long banking and large corporates experience, I have acquired a strong knowledge of all kind of debt solutions associated with credit, regulatory, compliance competencies. I have specialised in Debt Management, Fund Raising, Asset Finance, Leasing, Cash Flow Management, Trade and Export Finance and Project Finance. I am currently focusing on Sustainable Finance to support firms aligning their finance resources with their commitments towards the environment.

What’s the most important factor in debt management?

The starting point of debt management is a careful analysis and control of the cash flows. Borrowings need to align with the business cycle of the company and eventually its equity profile. Once the needs of each business line and the corresponding cash flow generation are consolidated, the adequate debt structure can be designed with a mix of junior to senior, short term to long term solutions and a calibrated interest rates structure.

What has been your best experience in your debt management career until today?

I remember a dramatic situation occurring during a local currency crisis in an emerging country, where we had arranged a large equipment finance. The debt repayment plan did not anymore match with the borrower’s cash flow generation and we were heading straight to a default situation. After long and numerous discussions, we managed to get transferred a large position on natural resources the company was owning but not operating and structured it in a way that the majority of risks were covered, the credit committees and respective boards were satisfied and ultimately the borrower managed to earn additional profit. I admit there is a part of luck in this experience but getting from this desperate situation to a point where all parties were so happy has been my most fulfilling experience so far!

What has been your biggest challenge in your career?

I consider the toughest challenges in a company are almost always linked to human resources management and termination of assignments. But if we remain within the treasury topic, my biggest challenge so far has been to accept a board decision not to conclude an M&A transaction, whereby all indicators (profit, risk, market position, further opportunities) were very favourable for the group and I had worked for more than one year on the case. Some months later, upon publication of the yearly results, it became clear why the project was rejected!

What is the most important lesson that you have learned as a treasurer?

Along the various experiences I had with treasury, the most important lesson might be to always seek the most simple and straight forward option. There are many ways of hedging a currency position, improving the average interest rate of a pool of debt facilities, leverage the value of an asset, optimise the return of positive cash position. But the risk and time associated to it can rapidly be disproportionate to the purpose and the size of the original transaction. Treasury shall normally create value, not necessarily profit!

How have you seen the role of Corporate Treasury evolve over the years?

Obviously, the role of Corporate Treasurer has become more and more complex. Treasury needs to deal with an increasing availability of alternative financial products, intensifying risk management requirements, regulatory and compliance constraints. But at the same time, the emergence of digital treasury platforms and integrated cash management systems are making the steering of treasury much easier and more accurate.

The coronavirus is undoubtedly an unprecedented crisis. In general, can you elaborate on the impact this virus has on treasury from your perspective?

Treasury is between a rock and a hard place: as a consequence of the crisis, sales are dropping and cash flows are missing but the financial obligations (debt, salaries, rents, supply, …) remain and the access (if not the availability) of financial resources become difficult. For treasurers who had a prudent cash flow management with enough resources to bridge the gap, it has been a confirmation for their risk management strategy. For others with more lean structure, it is, in the best case, a very stressing moment trying to find last minute and costly (not only in terms of interest rates) funding solutions. Some businesses, which have bet on a very tight business model, will probably be restructured. The crisis will certainly lead corporates to adopt more careful models with sufficient reserves and flexible organisations but also postponed or reduced investments.

What developments do you expect in corporate treasury in the near and further future?

The main trend is definitively the further digitisation of the treasury functions, offering more reliable, more secure and faster execution of the transactions: payments, cash management, trading, trade and export instruments, guarantees, etc. As the execution of transactions will be more and more automated and integrated in the supply chain systems, treasurers will shift their focus on analysing and planning for the financial resources in order to formulate strategies.

Another interesting trend for the treasurer is the further development of the non-banking debt market. This shall broaden the borrowers’ horizon, balancing again the bargaining power in favour of the corporates and generating even more tailor-made/OTC debt solutions.

What is your best advice for businesses without a Treasurer?

Running a business without a treasurer can only be considered for small businesses. For standard operations, managing the daily needs with modern digital tools will always become easier, even if substantial support shall be required during the implementation of a system. Once the system is running, the daily treasury tasks can be integrated in the accounting and finance agenda.

However, as soon as operations get more complex (investment, take-over, international development, restructuring…), the support of a specialist remains essential, be it for a limited period of time like part-time or ad interim…

 

 

Arnaud Béasse

 

 

 

 

Does your business need support in Treasury or a Treasury QuickScan?

We have treasurers available, go to Rent a Treasurer for all information.



Planning a Large Purchase? Tips for Saving

23-07-2020 | treasuryXL | XE |

When there’s a lot you need to save, it can seem daunting, and you might not know where to start. We want to help you with your savings plan.

Most of our purchases are pretty mundane. Think about the purchases you’ve made this week. They were probably more along the lines of swiping your card at the gas pump and paying your bills online than the lines of booking an extravagant trip or buying a new vehicle, right? But every so often, we will make those larger purchases.

Whether it’s a solid investment for your family and lifestyle (like a home) or a well-deserved bit of fun (like a hot tub), these purchases won’t be as easy. You may have enough saved up to make this purchase right now, but it’s more likely that this purchase is going to require a bit of saving.

When there’s a lot you need to save, it can seem daunting, and you might not know where to start. We wanted to share some of our tips to simplify the saving process for your next exciting purchase.

1. Figure out your timeline and use it to create your savings plan

Depending on the type of purchase that you’re making, there may be a specific date by which you’ll need to make your purchase. Even if you aren’t working towards a set deadline, it’s a good idea to set one for yourself so you can determine how much you want to save each month.

If there’s no rush, you can base your savings plan on how much you can comfortably put away each month, without having to make any changes to your current spending habits. But if you have a target date for your purchase or you’d prefer to shorten the process, read on to see how you can save more each month.

2. Make a separate savings account for this purchase

You may already have a general savings account (and if you don’t, try to open one as soon as possible). But creating a new savings account just for this purchase has a few benefits:

  1. You can visualize how much you’ve saved more quickly and easily;

  2. You won’t be tempted to pull from your emergency savings or other important savings (and vice versa);

  3. You can utilize accounts, tools, and services that you might not be using with your current savings account.

When you open this new savings account, take advantage of this opportunity to shop around your bank’s offerings or even other banks’ accounts. Some banks offer financial planning tools that can help you with your savings, or you could find a bank or account that will generate greater interest on what you’ve saved. Don’t just go with the first option available; take time to find the one that best suits your goals.

3. Reassess your budget

In general, you should revisit your budget on an annual basis, or any time you experience a change in your life or financial circumstances (such as starting or losing a job or combining finances with a spouse). Creating a savings plan is another time when you should take another look at your current spending. Determine how much you could comfortably put away each month, and how long it would take you to save at that rate. If you’re not happy with that timeline, try making a few changes to your budget to improve the efficacy of your savings.

There are some expenses that you can’t cut from your budget. Even when you’re saving up for a big purchase, you’ll still need to pay your bills, buy groceries, and put gas in your car in the meantime. But look at the subscriptions you pay for and the non-essentials that you buy and consider whether you need to budget for them

Even for the essential purchases, small changes like switching from name brands to generic, buying used, or comparison shopping online can add up to increased savings.

Need another currency for your purchase? Consider an Xe money transfer

You could be purchasing property in another country, or you could be making an investment. In these cases, your payment would. Sure, you couldjust make a card payment and let the exchange sort itself out in the payment process, or you could make a wire transfer. But when it comes to large purchases, there are a few unique advantages to using money transfer for your transaction.

When you’re exchanging a large amount of currency, the exchange rate can make a big difference in how much you need to provide. If you pay with your card or make a bank or wire transfer, your transfer will be made at their exchange rate. These exchange rates often come with hidden margins or are designed to favor the provider over you, meaning that you won’t get as much bang for your buck.

If you make your transaction through a money transfer provider, on the other hand, you can check the rates ahead of time and get a rate that you know you’ll be happy with. If you transfer money with Xe, you can guarantee that you’ll get a fair, honest exchange rate that comes from the live currency markets, with no hidden margins.

If you’re not on a time limit, there are a few tools you can take advantage of to ensure that you’ll get the best rate possible for your transfer. You can set a Rate Alert that will let you know as soon as your desired rate is live, or if you have the funds you can set a Market Order that will automatically purchase your currency when your ideal rate is live.

Or, if the rates are currently in your favor but you lack the funds or don’t want to make your purchase right away, a Forward Contract will allow you to lock in the current exchange rate and make your exchange or purchase at a future date.

Get in touch with XE.com

About XE.com

XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.

Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.

Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multi billion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you detailed information.

 

 

Visit XE.com

Visit XE partner page

 

 

 

Meet our Experts – Vincenzo Masile

21-07-2020 | Vincenzo Masile | treasuryXL

Welcome to interview #9 of the ‘Meet the Expert” series. This time we interviewed our Expert and Treasury Specialist Vincenzo Masile. He is an experienced international finance manager who lived and developed his career in Italy, The United Kingdom, Switzerland and The Netherlands. Currently, he lives in Amsterdam, and enjoys working with people from different countries.

His fields of expertise are:

We asked him 11 questions, let’s go!

1. How did your treasury journey start?

Back in 2008 I was working as a credit manager for a large US agricultural commodities, ADM, at their cocoa operations in The Netherlands and I was asked to spend six months in Switzerland at the newly created treasury hub.

2. What do you like about working in Treasury?

I enjoy the variety of the tasks and the communication with the different company stakeholders.

3. What is your Treasury Expertise?

Cash Management, People Management, Project Management, FX, Reporting, Banks Relationships

4. Do you have examples of risk mitigation, creation of opportunities and/or cost savings?

I was the PMO of a hedging project at Netapp for the EMEA region back to 2012. Cost savings opportunities were identified improving the process accuracy on Oracle 11 and simplifying the reporting to corporate.

At Affidea I changed the cash flow forecast reporting moving from a fully manual version to a partial automated version. This change generated time saving and more accuracy.

5. What has been your best experience in your treasury career until today?

On April this year I completed an eighteen months assignment at Affidea B.V., a Dutch pan-European medical healthcare and I worked mainly from their finance ops in Budapest and occasionally from their holding office in Amsterdam.

It was a very interesting and valuable experience.

6. What has been your biggest challenge in treasury?

Lack of cash visibility especially at country level has been one of the biggest challenges I had to face to.

7. What’s the most important lesson that you’ve learned as a treasurer?

A treasurer has a watchdog role over all aspects of financial management and indeed cash will be always the King!

8. How have you seen the role of Corporate Treasury evolve over the years?

Treasury evolved from a traditional finance role into a business enabler supporting the company growth. In that respect effective communication & collaboration across different areas of business is the key.

9. The coronavirus is undoubtedly an unprecedented crisis. In general, can you elaborate on the impact this virus has on treasury from your perspective?

My view here is that treasurers should take the following steps going forward:

  • Cash flow management:  This is even more critical as we move beyond COVID-19
  •  Determine cash availability: Enables informed decisions around liquidity and cash flow, debt, FX exposures and payment priorities
  •  Scenario testing: Ensures understanding of preparedness for shocks
  •  Engage with relationship banks: Opportune time to partner with banks to fast track digital adoption of tools that provide visibility, efficiency, fraud control etc.
  •  Digitize manual processes: Ensures enhanced controls are put in place where manual payments remain – to mitigate cyber and fraud risk
  •  Monetize inventory: Inventory may be temporarily surplus to requirements because of demand gluts or supply chain disruption

10. What developments do you expect in corporate treasury in the near and further future?

Technology will play a major role in the future and this can be only beneficial to corporate treasury. Payments platforms, Fintech, Trade finance blockchain solutions, outline that the future is already here.

11. What is your best advice for businesses without a Treasurer?

It depends on the size of the company but generally speaking I strongly recommend to have on board a treasurer.

 

 

Vincenzo Masile

Treasury Expert/ Credit Risk Manager

 

 




 

Does your business need support in Treasury or a Treasury QuickScan?

We have treasurers available, go to Rent a Treasurer for all information.



Cultural differences and Trade Finance

| 20-07-2020 | Ger van Rosmalen | treasuryXL

What do Trade Finance and Cultural Differences have in common?
If you want to do business internationally, it is important to understand which risks you could encounter. These are not only payment or transport risks, but certainly also communication risks

This blog is in Dutch language.

Over betaal-en transport risico’s laten mensen zich graag voorlichten en op dat punt gaat men graag met de opgedane kennis aan de slag. Toch levert dat niet altijd het beoogde resultaat op. Hoe komt dat dan? Vaak denken wij Nederlanders met onze buitenlandse zakenpartners hele goede gesprekken te voeren terwijl de nuances van de gesprekspartners volledig aan ons voorbij gaan. We begrijpen niet dat er iets anders bedoeld wordt dan wat er wordt gezegd. Dan kan het zomaar gebeuren dat de deal aan je neus voorbij gaat.

(H)erkennen

Erkennen en herkennen dat er culturele verschillen zijn is een goed startpunt. De volgende stap is hoe maak ik mij die kennis eigen en hoe ga ik dat toepassen in mijn dagelijks werk? Kennis vergaren is kennis in huis halen door gebruik te maken van ervaren trainers/docenten die de cultuur van het bedrijf als startpunt nemen om je vervolgens mee te nemen in jouw wereld van internationaal zakendoen. Met welke delen van de wereld doe je zaken? Leren hoe je met die zakenpartners op een effectieve manier kunt communiceren. Dat kan zijn als je elkaar ontmoet of per email, videoconference of telefoongesprek spreekt. In ieder van deze communicatievormen zijn andere aandachtspunten waar je rekening mee kan houden. Immers bij een telefoongesprek spreek je elkaar maar zie je elkaar niet en gaat het om een andere vorm van communicatie dan wanneer je elkaar via een video conference spreekt. Nu zie je elkaar ook en kan jouw zakenpartner ineens non-verbale signalen afgeven die je in een telefoongesprek niet had gezien.

Culturele verschillen binnen het bedrijf

Culturele verschillen is in mijn ogen een ondergewaardeerd onderwerp in het internationaal zakendoen. Ik ben er van overtuigd wat het bedrijven kan brengen en heb diverse trainingen mogen bijwonen bij bedrijven. Er ging een wereld voor de mensen open, zoveel voorbeelden van miscommunicatie, elkaar niet begrijpen en soms herkenning als voorbeelden worden gegeven hoe het mis kan gaan en ik mensen zie lachen die dergelijke situatie hebben meegemaakt. Ik heb ook een keer een training bijgewoond bij een groot internationaal bedrijf waar ik dagvoorzitter was. Doel was om te praten over culturele verschillen als je over de hele wereld zaken doet. Er waren 20 deelnemers met 18 verschillende nationaliteiten. Het bleek dat culturele verschillen binnen het bedrijf zelf al een groot probleem bleek te zijn. Collega’s die elkaar niet begrijpen, die dicht klappen als wij “Hollanders” de druk even stevig opvoeren. Ik kan u vertellen de trainer heeft die dag niet gesproken over culturele verschillen met buitenlandse zakenpartners maar wel over culturele verschillen binnen het bedrijf. Het was een openbaring en verademing voor de deelnemers om daar over te kunnen spreken. Deelnemers die vanuit hun culturele achtergrond niet snel op de voorgrond zullen treden konden en mochten zich uitspreken. Het is een zeer openhartige training geworden wat de collegialiteit een enorme positieve boost heeft gegeven.

 

Wil je meer weten hoe een beter begrip van culturele verschillen jou verder kan helpen?
Neem dan contact op

 

 

Ger van Rosmalen

Trade Finance Specialist

 

 

5 Signs Your Budget Needs a Rethink

16-07-2020 | treasuryXL | XE |

We’ve all got some sort of a budget. Whether you’re the type to keep an immaculate record of every bit spent down to the last cappuccino or you prefer to keep a more general list of priorities for each paycheck, everyone has some kind of methodology for how they choose to spend their money. How did you create your budget? And when did you create your budget? Odds are, your current circumstances aren’t exactly the same as the circumstances in which you first created your budget, and that could warrant a revisit. In general, you should review your budget at least once per year. But that’s the bare minimum: if you’re experiencing any of the following with your budget, it might be time to take another look.

#1. Your income, expenses, or goals have changed.

These three things are the bare-bones basics of any budget:

  • How much money you earn each month
  • How much money you need to spend each month
  • How much money you want to put into savings each month

You’re free to add other features as you please, but those are the fundamentals. A change in your income (such as starting a new job or getting a raise), a change in your regular spending (such as paying off a debt or adding a new expense), and a change in your goals (such as deciding to save for a home) will impact how you budget. Maybe now you can afford to increase the amount that goes into your savings account each month, or maybe you’ll need to cut your spending to account for your new expenses.

Don’t wait until things become problems: as soon as your finances change, make the changes in your budget to reflect them.

#2. You can’t afford it.

Some things are out of your control, and there might be periods where you’re in a tight spot, financial. But during ordinary times, if you find yourself:

  • Living paycheck to paycheck
  • Regularly spending more than you earn
  • Frequently dipping into your savings
  • Habitually relying on credit cards to cover necessary expenses
  • Not being able to consistently put money (any amount) into savings

…then your current budget isn’t working for you.

Take a look at your budget and see why these things are happening. It could be as simple as setting up an automatic deposit into your savings account each month. Or, you might need to critically examine your spending habits and reallocate your monthly income.

#3. It’s too restrictive.

Keeping a specific, organized budget isn’t a bad thing. But budgeting yourself so tightly that you don’t have any wiggle room can lead to trouble later on. Do you have the emergency funds to purchase a new dishwasher or make unexpected repairs to your car or home? Or would you be forced to dip into your retirement savings or take out a loan.

It’s important to save and spend responsibly, but allowing yourself the leeway for an occasional takeout meal or latte won’t derail your financial future (unless you genuinely don’t have the funds for these things). When it comes to your budget, you should feel disciplined, not restrained.

#4. You’ve noticed some unfavorable patterns in your spending.

Some spending is inevitable. You know you’ll always need to spend a certain amount on things like rent, mortgage, utilities, bills, and groceries. Once you’ve taken care of the essential spending and your savings, you’ll hopefully have a bit left over for fun, frivolous, and miscellaneous purposes.

Take a look at your nonessential spending too. It’s normal to spend a little more than usual during the holidays, for example, but are you consistently going over budget on things like online shopping, nights out, or takeout food? If you’re spending more than you can afford on these things, it’s time to reassess: either reallocate your budget to account for more spending, or make the choice to reduce the amount you spend.

#5. You’re stressed.

Finances are a common worry for people all over the world. But if you’re constantly stressing about whether you’ll be able to pay your bills at the end of the month, or stay up late each night worrying about potential disasters that could empty your bank account, making some changes to your budget could help you to find peace of mind and feel more comfortable with your finances.

Source

Get in touch with XE.com

About XE.com

XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.

Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.

Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multi billion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you detailed information.

 

 

Visit XE.com

Visit XE partner page

 

 

 

Blockchain and Interoperability: key to mass adoption

| 13-07-2020 | Carlo de Meijer | treasuryXL

Blockchain‘s  potential for improving business processes, providing transactional transparency and security in the value chain, and reducing operational costs is obvious for many. Notwithstanding this the expected mass adoption failed to happen up till now. What has been holding blockchain back?

In fact, there have been several concerns in recent years preventing this mass adoption. But by far the most widely recognized problematic issue is that of interoperability. Or, more accurately, the lack of it. In this blog, I will not go into the details of the various tools that can be used to enable interoperability. There are many reports that give in-depth description. I will look at recent developments in the interoperability area, the various offerings and real word interoperability use cases that should give an idea of what we may expect.

Siloed blockchain ecosystems

While blockchain was conceived as a decentralized technology, individual blockchain networks are not inherently open and are not able to communicate properly to each other. There are a large number of blockchain projects, all of which have different characteristics – such as the type of transactions, hashing algorithms, or consensus models – and which focused on a particular area. The problem is further deepened by different networks and financial institutions running completely different governance rules, blockchain technology versions and regulatory controls. This has resulted in a series of unconnected blockchain ecosystems operating alongside, but siloed from each other, preventing the industry from reaching its full potential.

“We would be left with a scattered collection of siloed blockchains, each supported by a weak network of nodes and susceptible to attack, manipulation, and centralisation.” ConsenSys research paper

What is interoperability?

The term blockchain interoperability is increasingly being talked for some time now. It not only means the possibility that disparate blockchain systems can communicate with each other. Above all it is the ability to share, see, and access information across different blockchain networks without the need for an intermediary – like a centralised exchange. So, blockchain projects that want to implement interoperability into their platform aim to create an ecosystem that will enable different blockchains to easily communicate with each other. The vision of interoperable enterprise blockchains thereby rests on a number of functionalities and abilities including: integration with existing systems, initiate transactions on other networks, conduct transactions with other chains, transact between deployments on the same chain by integrating apps and making it easy to switch one underlying platform for another.

Why is interoperability critical?

It is easy to see why interoperability for blockchain is not only desirable, but above all critical, in a world where enterprises depend on ever-greater levels of collaboration and interaction. In fact, interoperability is crucial in any software system – it simply won’t work to its full potential if it can’t work with other software. It is the only way to realise the full promise of enterprise blockchain and get the most out of their blockchain investments. Interoperability would enable smooth information sharing, easier execution of smart contracts, a more user-friendly experience, the opportunity to develop partnerships, and the sharing of solutions.

Where is interoperability needed?

Especially in areas where the value chain is important, such as supply chain, trade finance, healthcare, aviation, etc., one blockchain network will simply be unable to provide all the needs for any given transaction. This asks for multiple networks, each providing specific value, and proper communication so that data from private networks can be routed to other relevant networks for transactions “without having to establish a one-to-one integration”. “Everyone is dependent on physical goods’ ability to move across all participants in the global supply chain with minimal friction. We need the same ability to move a digital asset from one blockchain to another without creating redundant data or a new market for intermediaries. This is why blockchain interoperability is critical.” Rasmus Winther Mølbjerg, Director, Deloitte, Denmark.
Blockchain’s characteristics allow disconnected supply chain management systems to interoperate securely without too high investment costs. Because of the pressing need for supply chain transformation, leveraging these characteristics ensures that blockchain can be useful and effective in the real world.

Interoperability Studies: WEF Report

In the meantime a number of interesting papers covering the interoperability issue have been. The most ground-breaking one is that of the World Economic Forum (WEF). The WEF described blockchain technology as being “balkanised in silos.” In collaboration with Deloitte, the WEF this year released a report on “Inclusive Deployment of Blockchain for Supply Chains – A Framework for Blockchain Interoperability”. The report covers several models, concepts, approaches and best practices for blockchain interoperability. It should help organizations understand the importance of interoperable blockchains and outlines a decision framework to support their development and execution. “Interoperability and compatibility issues are key to address in a world after the coronavirus pandemic.” “The challenge of interoperability is not only a technology problem, but even more so a problem in terms of governance, data ownerships and commercial business models.” Nadia Hewett, Blockchain and Digital Currency Project Lead at the World Economic Forum

Blockchain interoperability approaches

Broadly one could distinct two main blockchain interoperability approaches: APIs and network-of networks model.

‘Mashup’ APIs
Blockchain networks and solutions could be brought together for an organization via a so called “mashup” application. They only have to interact with one consistent application programming interface (API) and not an API for every network. This mashup application can include a variety of capabilities defined in data models and smart contracts, but fundamentally, it will serve as “the glue that joins various networks together”. However, APIs do not presuppose a governance structure, which makes them flexible and expedient but also a poor choice for organizing interoperability in the long run.

Network of networks model
The most efficient and scalable way to build interoperability is through the joint effort of establishing industry standards as well as identifying a network of networks structure that industry networks can converge around. An organizations blockchain network actually represents a ”web” of interconnected networks. This architecture would allow an organization to connect and transact with multiple solutions, not restrained to a single network, and open up a market of interoperability across solutions. By unlocking the power of the peer, organizations can use their peer to connect into multiple blockchain networks via channels. This significantly reduces the complexity and optimizes an organizations interaction with different blockchain networks. This network of networks model for interoperability continues to gain momentum, especially as we see natural blockchain hubs emerge.

Blockchain interoperability solutions

The majority of interoperability solutions up till recently were mainly focused on chain interoperability across public blockchains, thereby using crypto-directed tools like sidechains (or relay chain), notary schemes and timed hash-locks. The focus however has increasingly shifted towards solutions for interoperability between private networks and/or between private networks and public blockchains. One way to solve interoperability is to use a separate blockchain as a bridge to facilitate cross-communication. Essentially, this is a third blockchain that sits in the middle of the two blockchains and maintains a cryptographically secured timestamped ledger of the transactional and messaging activity between the two. Interoperability tools that are used range from hub and spoke, decentralised finance (DeFi) and general purpose bridges. Another way to facilitate interoperability between systems is with off-chain or middleware systems. This so-called non-blockchain interoperability approach uses tools including atomic swaps, oracles and state channels.

Blockchain Interoperability projects

A growing number of interoperability projects have entered the scene to try to bridge the gap between the various blockchains. Their aim is to facilitate interaction between networks and ensure the concept of decentralisation is fully realised. Depended on the interoperability solutions these can be used for activities like decentralised asset exchange and decentralised message exchange. Interesting projects are Chainlink, Cosmos, Hybrix, Polkadot and Wanchain. Other examples include Aion, Ark, ICON, Transledger, and Overledger.

Chainlink
Chainlink is a decentralised oracle network, an interoperability solution to facilitate secure and trustless communication between all disparate blockchain systems. The resources mostly revolve around off-chain data to trigger smart contracts and settlement outputs like established payment systems and cloud backend. This standalone function is important for many blockchains that don’t have to interact with other blockchain protocols but do need access to externals inputs and outputs. Chainlink nodes are able to format messaging and data from public APIs into a readable format for smart contracts. These nodes can connect to any API, whether it is a blockchain, enterprise system, Web API, or IoT device. Chainlink is sometimes working in combination with other interoperability protocols. Chainlink has already announced partnerships with Polkadot and Ethereum to provide off-chain data to their networks. Wanchain is integrating with Chainlink to provide off-chain  data to their on-chain smart contracts.

Cosmos
One of the most prominent interoperability solutions is Cosmos, very much focused on its Cosmos SDK platform. Cosmos aims to act as an ecosystem of blockchains that can scale and interoperate with each other. Cosmos is a smart contract platform that has prioritized interoperability as a critical component of their blockchain design. Their architecture is based on the so-called ‘hub-and-spoke’ system whereby a series of ‘spoke’ chains connect to a ‘central’ hub by means of inter-blockchain communication. Cosmos is heavily reliant on validators to provide interoperability. It makes use of the so—called Byzantine fault tolerant (BFT) consensus algorithm and uses both member chains and Peg-Zones for existing chains to improve the overall ecosystem. Their end goal is to create an ‘internet of blockchains’ – a network of blockchains that can communicate with one another in a decentralised way. The implementation of the IBC (Inter Blockchain Communication) protocol is scheduled for this year 2020. Cosmos will use the IBC protocol to allow communication between a central hub and the chains linked to the network, also called Zones. It will first only concern the interoperability of chains built on top of Cosmos SDK platform.

Hybrix
Hybrix is an open-source cross-chain solution aimed to make it easier to make cross-chain transactions, and also increase the level of ease for developers who want to offer multi-chain platforms. For that purpose Hybrix is developing an “HY” token. Each token represents an identical block of a chain and can be used to reconcile data across the entire crypto complex. Tokens form as bridges that allow transactions to be conducted on either a single chain or multi-ledger systems. Since Hybrix utilizes existing languages to build its protocol and interface, there’s no need to acquire new coding languages to use its system. Hybrix has amplified its capacity to adapt 27 major blockchains and more than 400 tokens.

Polkadot
Another project is Polkadot, which facilitates transactions and data exchange, aiming to promote interoperability between blockchains. It uses the DPoS algorithm and employs required validators which can lead to a certain degree of centralization. The concept at Polkadot is quite similar to that of Cosmos. It allows communication between the relay chain and the parachains of Polkadot’s network. By using Parachains and Bridgechains, this approach enables to transfer both value and data. Additionally, scalability will be taken to a whole new level by running multiple parallel chains. This is a bit different from other projects which are looking to bridge the gap between blockchains as well. The launch of their mainnet is planned for this year (2020). As for interoperability, there are no precise timelines regarding their protocols for chains  implementation.

Wanchain
The Wanchain network allows interoperability between very heterogeneous blockchains like Bitcoin, Ethereum and EOS. Wanchain aims to link and facilitate communication between the different blockchains as much as possible. Wanchain is already functional and allows communication and exchange of value and data between public and private blockchains through storeman nodes and the T-Bridge framework. The storeman node system combines two cryptographic concepts that ensure security and confidentiality of network transactions: secure multi-party computation and “Shamir’s secret sharing”. The Wanchain project recently announced the integration of EOS blockchain and the implementation of the T-bridge framework. Wanchain’ s next challenge is to fully decentralise its network. This is planned to be finalised in 2022.

Other interoperability offerings

And there are many more interoperability projects including Aion, which is working towards integrating artificial intelligence in its consensus model. Or Ark which uses Smartbridge to link existing chains, and will also allow for the transfer of both data and value. And the Loom Network, which uses its DPoS blockchain Basechain to connect and transfer value among several blockchains, including Bitcoin, Ethereum, and Binance. A rather unknown but interesting player is Block Collider. Its proof-of-distance (PoD) consensus algorithm ensures that ledgers can operate with one another. It is also the only project that, in its current form, requires any validators.

Real world interoperability use cases

During 2020 we have seen a number of interesting real world interoperability use cases.

AVA Network (Defi Apps)

The AVA network is an open-source platform for building and deploying decentralized finance (DeFi) apps and enterprise-grade blockchain solutions that can be run in one interoperable, highly scalable ecosystem. AVA has officially released the codebase of its AVA blockchain platform to the global community. Interoperability between different DLT networks has thereby been built into the AVA protocol, using the Avalanch consensus protocol. The AVA platform has coupled this protocol with a network model that enables the system to span permissioned and permissionless networks, making AVA a self-serve platform for new blockchains and digital assets. Instead of one network with thousands of tokens, the AVA ecosystem is one platform with thousands of subnetworks and tokens on each subnetwork . AVA’s infrastructure allows anyone to build their own private, public, permissioned or permissionless blockchain networks or subnetwork, so-called “subnets.”

Kava Labs and IRISnet (decentralised finance)

Another  real world  example is Kava Labs that has teamed up with IRISnet in order to provide a technology foundation for facilitating the development of distributed business applications. Kava is a Cosmos SDK (software development kit) blockchain. The collaboration will involve the whole interchain ecosystem that has been developed by  blockchain interoperability solution provider Cosmos. Aim is to further support and promote decentralized finance (DeFi) application development on each other’s respective blockchain or distributed ledger technology (DLT) networks. Kava’s Interblockchain Communication Protocol (ICP) will be used by both development teams to expand the nascent DeFi ecosystem. IRISnet aims to offer iService and Coinswap applications to Kava in order to improve liquidity. “Cosmos’ value proposition is that “if you make a blockchain and it has a similar consensus mechanism to another blockchain …[then by using] … the inter-blockchain communication protocol (IBC), you should be able to connect those two blockchains and transfer data [or assets] between them.” Brian Kerr, CEO at Kava Labs

Quant Overledger and Oracle Cloud (banking lifecycle)

Quant Network, a technology provider, delivering blockchain enterprise-grade interoperability for the secure exchange of information and digital assets across any network, platform or protocol, at scale, has partnered with Oracle. Quant will use Oracle Cloud to run mission critical business applications on interoperable DLTs that will be powered by Overledger, which connects global networks to blockchain-based platforms. Banking institutions may deploy an extensive set of APIs that aim to cover all areas across the banking lifecycle. “Quant helps Oracle’s customer banks by providing a single API to all supported blockchains to power interoperability across platforms. Giving clients choice and flexibility to freely use any blockchain technology and go cross-platform with only three lines of code.”  “Clients gain benefits of market access, new products and revenue streams without the challenges of managing complex underlying blockchain technology stacks.” Gilbert Verdian, CEO at Quant Network

SIA and Quant Overledger (financial services)

Banking users of SIA’s private blockchain infrastructure, SIAchain, will be able to link up with other distributed ledgers following successful testing of interoperability via Quant Network’s Overledger technology. Quant’s Overledger complements and connects existing systems and DLTs, to drive innovative and efficient growth for companies, public entities, and regulatory bodies alike. This integration provides the ability to bridge permissioned blockchain instances between SIAchain’s 580 European network nodes and other external networks in order to have crossplatform applications and services covering the likes of notarisation, payments and KYC. SIA, that provides its services in  50 countries, is European leader in the design, creation and management of technology infrastructures and services for Financial Institutions, Central Banks, Corporates and the Public Sector, in the areas of Card & Merchant Solutions, Digital Payment Solutions and Capital Market & Network Solutions. “The achievement of a fully interoperable blockchain network, through our collaboration with Quant Network, is another key-element in our path of bringing innovation and state-of-the-art technologies for supporting banks, financial institutions, corporates and public administration bodies to extend their capabilities in integrating different DLT business applications.” Daniele Savarè, innovation & business solutions director SIA.

Telos and Transledger (crypto currency transfers)

Transledger, a blockchain interoperability platform that aims to facilitate cryptocurrency transfer between separate or independent DLT networks, has chosen the Telos blockchain network to perform cross-chain digital asset transactions with its utility token in a fast and secure manner. Transledger Inter-blockchain Communication (IBC), allows different blockchains to interact with each other and perform tasks together. Use cases for blockchain interoperability solutions include peer-to-peer (P2P) networks such as decentralized or non-custodial cryptocurrency exchanges (DEXes). These types of trading platforms allow digital asset users to trade their tokens without requiring centralized, third-party exchange platforms. DEXes may use Transledger IBC to run P2P networks across several different blockchain platforms. This allows trading on DEXes to take place at speeds that are comparable to centralized exchanges, however, these non-custodial platforms allow users retain control of their funds. They also allow investors to manage their cryptocurrency portfolios with “faster and more powerful” smart contract functionality and features.

Skuchain and Corda (trade finance)

Skuchain network, a blockchain platform for supply chain, recently launched the DLPC CorDapp, a Skuchain application that promotes interoperability in trade finance blockchain applications. This application is the first example of The Bankers Association for Trade and Finance’s Distributed Ledger Payment Commitment (DLPC) operating in a real network. A DLPC is a fundamental piece of trade transaction. Everyone needs to commit to a payment. Skuchain’s DLPC CorDapp allows transactions to take place between its enterprises on Hyperledger Fabric and their bank partners on the Corda Network. The ultimate goal of brokering interoperability between Skuchain EC3 and Corda is to allow Skuchain’s enterprise customers to receive trade finance from banks on a Corda implementation without any party having to onboard onto another platform. Enterprises can now easily access trade finance as native part of their own supply chain platform.

Moving forward

The arrival of interoperability solutions may fundamentally change  present attitudes towards blockchain and will be an important step in persuading networks that the seamless exchange of data is crucial to the success of the entire market. As more progress towards interoperability between blockchain protocols is expected in the coming years, and we already may see successful cross-blockchain projects this year, interoperability is likely to become an important game changer for the blockchain industry. We may say that Blockchain seems to be at the threshold of widespread acceptance and adoption.

 

Carlo de Meijer

Economist and researcher

 

 

 

Source

Going Cash-Free: Is it Right for You?

09-07-2020 | treasuryXL | XE |

Let’s try something. Reach out to your friends, family, or roommates and ask if anyone has $50 they could loan you. Did anyone have that much money on them? Or did they say that they needed to go to the bank, or ask if they could electronically transfer you the money?
In recent years, it’s become increasingly common for people to not carry cash around with them, or to just carry a little bit in the case of emergencies. While there are exceptions, the majority of consumers have moved to using their credit and debit cards and other forms of electronic, cashless payment.

At the end of 2019, 70% of consumers in a survey answered that they preferred card payments to cash, with 38% of card users citing inconvenience as the main reason they preferred cards to cash. And it’s not just consumers who are looking to go cashless. Corporations like Starbucks, Sweet-green, and even Amazon have all implemented cashless measures at their physical locations. Whether you’re tired of the inconvenience of cash, want to keep track of your transactions, or you’re worried about the possibility of your cash carrying germs, you may be considering taking your payments completely cashless. Let’s take a look at what that could mean for you going forward.

Why go cashless?

Many people around the world have enjoyed the benefits of transitioning away from cash and toward electronic payment methods. These are some of the most popular reasons for making the switch:

  • It’s convenient. No more lugging that heavy wallet around, and no more digging around trying to find the right bills. If you’re short on time and want a quick transaction, all you need to do is swipe a card.
  • It leaves a paper trail. Does anyone keep a record of every single time they pay with cash? When you pay electronically, on the other hand, you have a built-in record of everything you’ve purchased, when you purchased it, and how much it cost. If you’re trying to budget, this makes it easier for you to see exactly how much you’re spending and where your money’s going. Or if your balance is lower than you expected, you’ll be able to see where the money went—or if your account information has been compromised.
  • Some cards come with benefits.From discounts to rewards, cash-back points, airline miles, and more, using your card frequently now could bring you a lot of benefits in the future.

Why you might want to keep a little cash

Even as technology continues to advance, it’s not likely that cash is going anywhere anytime soon. 88% of surveyed consumers stated that they still use cash sometimes, and here’s why:

  • Data security and privacy are a concern. With technological advancement comes new data security worries, and the world of payments is not an exception. E-commerce sites can be breached, and card information can be stolen. Or, after buying online, you might start seeing targeted advertisements based on your purchase and search history.
  • Cashless payment isn’t always a guarantee. Some vendors (particularly smaller, local businesses) only take cash. Or if they accept card payments, they might have a required minimum or add a small additional service fee to the transaction. Or maybe a store or restaurant’s card reader could go down for the day, and you’ll need to find an ATM. It might be small now, but these fees can quickly add up—and your card might end up being more of an inconvenience in these establishments.
  • You could spend more! When you have cash in your wallet, it’s easy to keep track of how much you have left, and how much you’ve spent. When all you need to do is swipe your card, it can be easy to lose track of what you’ve purchased and what’s left in your account.

Could my cash be contaminated?

In the wake of the global COVID-19 pandemic, this has been a question on everyone’s minds. Can cash carry the virus? Which payment method is the least likely to put you at risk of cross-contamination?

You’ve been told to try to avoid coming into contact with high-touch surfaces (such as door handles, handrails, and tables). Since cash frequently changes hands, you might be worried about the chances of your money carrying some harmful germs.

It’s true: coins and bills can potentially carry viruses, bacteria, and other pathogens. It’s not the most common method of transmission, but it can potentially happen. If it gives you peace of mind and makes you feel less anxious about the possibility of cross-contamination, prioritize electronic payment and card payments, since your credit and debit cards can be wiped down. If you do need to handle cash, wear gloves if possible, and always wash your hands after coming into contact with new, potentially infectious objects.

In conclusion…

From buying a house to transferring money overseas, there are a few situations where paying with cash obviously isn’t the best move. If you enjoy the convenience of electronic payments and want to make the transition into a completely cashless lifestyle, you’re not the only one ready to make the switch. As long as you know what works for your purchases and your lifestyle, there’s no reason not to explore alternate methods of payment.

Source

Get in touch with XE.com

About XE.com

XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.

Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.

Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multi billion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you detailed information.

 

 

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Accounting for FX; the Do’s and Don’ts

08-07-2020 | Niki van Zanten

Let’s start by mentioning a phrase that I hear regularly and, to be honest, also use myself: ‘I am not an accountant, but…..’.
The urge to mention this phrase (usually targeted to an accountant while having an ‘I know it better’ attitude), can perhaps be traced back to the following reasons:

  • Discrepancies between accounting and real economics;
  • The fact that some (from my perspective, way too many) companies are run by accountants and numbers;
  • Historically absurd requirements in terms of hedge accounting*.IFRS on paper brought some relief but the old FAS and IAS standards were over the top accounting driven without a mere grasp of the real world.

The first point could already result into great discussions. As companies are expected to adhere to certain accounting standards, these standards represent the objective part of these discussions. This results in real economics claiming an underdog position.
If companies have to choose between compliance on one hand and doing what works best economically on the other hand, the way to find the right balance is by training accountants about real economics. Many individuals working in treasury have an accounting background, which could be beneficial if that individual takes the economic approach and uses accounting knowledge convince business partners.

Let’s jump into some basic examples where accounting doesn’t reflect economic reality:

  1. IC (inter company) bookings where the transaction is not reported in the same currency at both ends

Entity A (EUR Functional) has a receivable of 1 Mio EUR and entity B (USD Functional) has a payable of 1.1 Mio USD. The Historic rate was 1.10 and cash flow occurred in USD. Entity A decided to book in EUR to avoid any FX reporting. The consequence is that there is indeed no FX exposure visible. However upon settlements all FX results suddenly appear.What a nasty surprise!

  1. Re-measurements not done at correct rates

The best indication for FX effects in your books is obtained when the applied rates are close to the market rates. As you know there are many different sources for markets rates.  The awareness of this fact is not visible in accounting.

  1. Forward points not segregated

If you do not segregate forward points in PL, you can have FX results when the currency in question does not move. That just sounds very strange to me and this also touches upon a bigger issue, namely the allocation of result on PL. In the case your FX does not land in a segregated PL line, or worse non-FX related results end in your FX PL,
this usually does not change the total PL. However this makes it extremely difficult to control FX results, as you need good exposure information as well solid controls in terms of realized results. Segregation of realized and unrealized FX is also a very helpful tool for the Risk manager.

Are companies run by accountants?

That question should be discussed over a beer or glass of wine. Right now, I will limit myself to some pointers on how to identify whether a case could be identified as an accounting issue or economics issue. It is actually very simple and should be done by treasurers and financial controllers, before any discussion occurs on what the actual problem is.

By comparing the accounting steps for each of the proposed solutions with the trades, you can identify where market risk arises and where accounting risk. The one can see that thes are not always the same. Furthermore, it might also be a good time to call for a specialist, if the right level of comfort is not met. This way of working also fits well with the absurd requirements of hedge accounting.

Regarding this topic, ask yourself whether you really need to apply hedge accounting. From my experiences, in most cases hedge accounting is applied only for one reason; to reduce the PL volatility in between hedging and the moment of cash flow for forecasted transactions. (especially true for listed companies).Taking an economic perspective, there is no benefit in hedge accounting at such a significant cost in terms of audits and administration . Hence, determine how high the cliff is, before you dive down into hedge accounting procedures.

Conclusion

In a perfect world with only blue skies and where work consists of having margaritas on the beach, there are no accounting requirements (and probably also no FX to manage). In our world, the same feeling can be obtained by making sure that the accounting for FX reflects economic reality as much as possible. Thisby applying the accounting standards as a framework. Furthermore  take into account what level of known discrepancies between the economic and accounting reality you are comfortable with.

*Please note hedge accounting and accounting for FX are not the same. By accounting for FX I mean the accounting entries done by non-local or group currency items. These can be invoices in different currencies or intercompany bookings. Hedge accounting is only linked to deferring derivative MTM on the balance sheet as opposed to PL immediately.

I am curious about your thoughts. Please comment…

 

Niki van Zanten

FX specialist

 

Meet our Experts – Interview François de Witte

07-07-2020 | François de Witte | treasuryXL

After having worked for more than 30 years in banking, our expert François de Witte launched his own consultancy activity, FDW Consult, specialized in finance and treasury consulting. From 2014 to 2016, he was also Solution Partner Treasury & Finance at USG Professionals. Since then he took up several assignments, including one in the automotive sector with Ginion Group and with Ibanity, part of Isabel Group in the area of PSD2 and open banking. He currently is Senior Project Manager Treasury at Gaming1 (part of Ardent-Group). He is also co-founder and CFO of SafeTrade Holding. Key areas of expertise:

We asked him 11 questions, let’s go!

1. How did your treasury journey start?

My roots are not really in treasury, because I have spent 30 years in banking with ING. Mid-2013, I made a major career move to treasury & finance. I could thereby leverage on the expertise I acquired in both Corporate Banking and Payments & Cash Management.

2. What do you like about working in Treasury?

The diversity of topics and people with whom you are in contact. The treasurer monitors the cash & finance, and is in the frontline of the circulatory system of the company. In addition, in view of the technology developments and the globalisation, treasury is a fast moving discipline,

3. What is your Treasury Expertise?

Based upon a gap analysis, during the first couple of years, I strengthened my expertise in the other areas of treasury by self-training. I also started training in some subject matters, at the university and at other training organisations, and this is a good way to keep yourself updated on the latest developments.

4. Do you have examples of risk mitigation, creation of opportunities and/or cost savings?

I have done quite a number of consultancy assignments. In one of them, thanks to a complete review of the processes, including also the business, we managed to gain some 10-15 days working capital management. In another project, we reviewed the account structure and the bank lines and could generate substantial savings. During a treasury scan, I was able to identify foreign exchange risks, which had not been spotted by the management.

5. What has been your best experience in your treasury career until today?

In my current assignment, we have selected a TMS-solution (Kyriba) and are currently finalising the implementation. Simultaneously we created a cash pooling and an In-House bank and streamlined the processes.

6. What has been your biggest challenge in treasury?

When starting in treasury, I did not have experience on the field, and needed to switch from a banker’s approach to a corporate approach. If you want to be successful, you need to also have operational experience. I have spent at the start quite a lot to train myself and to get up to speed in treasury.

7. What’s the most important lesson that you’ve learned as a treasurer?

Cash is and remains king. It is very important to make the management aware of the importance of cash, even if a company is in a cash-rich position.

8. How have you seen the role of Corporate Treasury evolve over the years?

The Treasurer is becoming a business partner of the whole group. As a treasury, you get a good transversal view of the business flows. This is very nice because you are in the cockpit of the finance department.

9. The coronavirus is undoubtedly an unprecedented crisis. In general, can you elaborate on the impact this virus has on treasury from your perspective?

The COVID crisis was a wake-up call. It reminds us that it is important to keep the focus on cash and working capital management. It also highlighted the importance of good well-balanced banking relationships. During the last years, some corporates did not put the right attention to this.

10. What developments do you expect in corporate treasury in the near and further future?

Cash will remain dominant. In addition, we have the automation enabling to work more efficiently. I also see AI (Artificial Intelligence) as enabler, e.g. for cash forecasting. Blockchain will also add value in some areas, such as documentary trade.

11. What is your best advice for businesses without a Treasurer?

 Even if you do not have the critical mass to justify a treasury department, give it the right attention. Try to understand the drivers of your cash generation and to identify the risks. I would also recommend to invest in a treasury management scan.

 

 

François de Witte

Founder & Senior Consultant at FDW Consult

 

 

 

 

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