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Release your Working Capital and Treasury potential

| 26-09-2019 | treasuryXL | Cashforce |

Deriving meaningful information from extremely large volumes of data from multiple sources is time-consuming and inefficient for any finance or treasury function; whether that be to provide financial data or forecasts to the market, banks or internal stakeholders, the challenges are myriad. But the department cannot forecast without that insight.

To compound the problem, in a world where volatility and uncertainty have become the norm, treasurers are now part of their organisation’s strategic leadership and must increasingly find ways of bolstering their approach to gain a much-needed competitive edge.

This article considers three of the most common challenges for finance and treasury departments today, and explores how the Cashforce platform solves them:

Harnessing big data
Advanced cash flow forecasting
Implementing new technology.

HARNESSING BIG DATA: THE BIG PICTURE

Like many other departments within a business, most treasury functions have large volumes of consolidated data in complex spreadsheets, very rarely providing easy access to transactional data. Decision making is difficult as the answers are often buried in complicated formulas and countless links to excel templates. The problems caused by an inability to identify relevant data are compounded by any number of missed opportunities and risks. To put the big data problem into perspective, a report from McKinsey & Company suggests that a typical organisation uses less than 1% of the collected data to make decisions.

“A typical organisation uses less than 1% of the collected data to make decisions”

A major British retailer faced this very challenge — large volumes of data embedded in 10 different ERPs and no consolidated view on what was really tied up in working capital. To unlock the potential that already existed within the retailer’s own data, they asked Cashforce to implement a cloud-based solution with detailed dashboards to drill down from a consolidated position to core data by integrating with ERP systems. Within three weeks, this opened up over 20 million transactions per month, ready for analysis.

Cashforce‘s big data engine accesses vast volumes of data quickly and easily via a library of APIs and connectors which take raw data from multiple sources (including ERPs, Treasury Management Systems, data warehouses and banking platforms) and transforms it into meaningful, easy to understand dashboards — empowering the user with the big picture.

ADVANCED CASH FLOW FORECASTING: ML AND AI FOR INTELLIGENT SIMULATION

If cash is king, then accuracy in cash forecasting is the prodigal son. PwC‘s 2017 and 2019 Global Corporate Treasury Survey shows how forecasting accuracy is key to managing and running a business efficiently, and it continues to be a high ranking C-suite priority. A lack of transparency over data means that output from generic treasury management systems inaccurate and unfocused. To maximise predictive, trend-based behaviour you need access to the raw data. But how?

Far from the futuristic concepts, they were perceived to be, machine learning and artificial intelligence are being deployed right now, with stunning results. Smart algorithms are providing proactive optimisation actions to generate highly accurate forecasts, and intelligent simulation engines enable companies to consider multiple scenarios and measure their impact. Cashforce is unique in that the platform can be set up quickly, even in the most complex environments, seamlessly connecting with any ERP system. As a result, finance departments can be turned into business catalysts for cash generation opportunities throughout the company.

“If cash is king, then accuracy in cash forecasting is the prodigal son”

In the case of education company Pearson, CFO James Kelly was looking to improve the cash forecasting abilities of a TMS that was the equivalent of an Excel spreadsheet.

“If you don’t have predictability, you can end up overriding your forecast and saying ‘nine days out of ten I’m spot on, but there’s the risk that one day out of ten I’ll be miles out’ – so you decide to hold a lot of cash back just in case,” Kelly said.

Pearson partnered with Cashforce to deploy an AI-supported forecasting solution which integrated with the group’s systems, replaced manual keying with robotics, and provided multiple AI algorithms offering unprecedented insights into cash flow. AI-based forecasting unlocked significant amounts of trapped cash overseas, and balances were reduced by over £100 million — freeing up cash to invest elsewhere in the business instead of drawing down on credit facilities.

IMPLEMENTING NEW TECHNOLOGY: A NIMBLE APPROACH TO ONBOARDING

When it comes to the universal challenge of onboarding, the focus must be on simplification and streamlining. Central to this is the alignment of a library of connectors to data sources. This is why Cashforce’s working capital module integrates with multiple ERPs to provide granular detail within operational transactional data. And because the user organisation may be running different or multiple ERPs in different regions, we recommend an ERP-agnostic solution.

The operational data in an ERP only provides half a story so our solution also sits on top of treasury systems to provide a holistic cash flow forecast combining both treasury and operations with data based on a client’s unique reporting requirements.

End-user flexibility is a key feature of any financial system today, so user roles can be defined and users added or removed by a client administrator. The additional benefit of a SAAS platform means no heavy lifting is required by your IT department.

“With Cashforce, finance departments can be turned into business catalysts for cash generation”

In the course of a recent implementation, British manufacturer was faced with the challenge of Brexit-related contingency planning, when it decided to stockpile certain FDA-approved products destined for the US market. The firm’s initial focus was on cash management and forecasting but refocused mid-way on working capital management with a major focus on inventory and traceability. Such a change in scope can often lead to significant delays in delivery, but with Cashforce driving the process, the project was delivered on time.

About Cashforce

Cashforce is a smart cash flow management and cash flow forecasting platform for working capital intensive businesses. Our technology is helping Finance departments save time and money by offering cash visibility & pro-active cash saving insights. CFOs and Finance departments can drill down to the cash flow drivers and smart algorithms are applied providing pro-active optimization actions. An intelligent simulation engine enables companies to consider multiple scenarios and measure their impact. As a result, finance departments can be turned into business catalysts for cash generation opportunities throughout the company.

Cashforce is unique because it offers full transparency into what exactly drives the cash flow of complex (multinational, multi-bank, multi-currency, complex ERP(s)) enterprises, typically with revenues between € 50 million and € 10 billion. It is the first cash management platform that builds a bridge between the treasury department and the actual business departments such as sales, logistics and purchasing. Unlike other enterprise software players, the Cashforce platform can be piloted within a few hours in complex environments, seamlessly connecting with any ERP system.

Currently users in over 40 countries are using our platform to streamline their cash management processes. Cashforce has proven its value in various complex environments, including environments where in-house banking, cash pooling, POBO, ROBO, etc. are used.

Cashforce is headquartered in Belgium with an office in New York City, serving customers such as Hyundai, Portucel, Alcadis among many others worldwide.

PSD2, Open Banking and their major impact

| 24-9-2019 | François de Witte | treasuryXL |

This training program at the Febelfin Academy prepares participants for 2 major challenges of the upcoming years in banking: PSD2 & Open Banking. This will have a major impact on the financial ecosystem and will create new challenges.

The goal of this training course is to:

Make participants aware of the ways PSD2 & Open Banking affect banks and other players in Europe;
Understand the impact of the technical requirements with a focus on strong customer authentication;
Outline the risks and responsibilities of the involved parties within the new regulatory framework;
Understand the impact of Open Banking APIs (Application Programming interfaces;
Understand the impacts of the PSD2 & Open Banking the financial ecosystem;
Evaluate the risk and opportunities created by PSD2 & Open Banking the banks and the new players;
Determine action plan for your company.

Target Group

This training course can be followed by multiple target groups:

Managers of a banks/PSP’s/Fintechs involved with the payments and digital strategy
Product Development Experts (payments)
Service providers involved with Open Banking
Corporate Treasurers
Compliance officers

Advanced: offers practice-based applications to complement the theoretical knowledge already acquired through the “basic level” courses (in-depth learning).

There is no specific preparation required. For persons who are less acquainted with PSD2 and payments, some pre-course reading material can be made available.”

Program

This training program prepares participants for two key challenges of the upcoming years in banking: PSD2 and Open Banking.

Part I: PSD2 and Open Banking – overview:

PSD2: Scope and Basic Principles
XS2A (Access the Accounts)
New Players: AISP and PISP
SCA (Strong Customer Authentication)
Consent and SCA
Requirements for the Banks and TPPs
Timetable
Trends in Open Banking

Part II: Open banking architecture: Implications for banks and the New Players

XS2A: Risks, Responsibilities and obligations of the related parties
XS2A: Availability Requirements
Setting up the SCA in Practice
SCA: Optimization of the Exemptions
Security requirements ensuring consumer protection
Addressing the fraud and cyberattack risks
Technology: building interfaces – APIs (Application Programming Interfaces)
European initiatives to standardize the interfaces
Practical aspects – Role of Aggregators
Group Exercise

Part 3: PSD2: Potential impact on the market and next steps

Global impact on the market – New Players
Impact on the Payments Landscape
Impact on the Cards and Digital Payment Instruments
Impact on the Merchants and the e-commerce
Impact on corporates
FinTech Companies: ready to disrupt banks?
Implication on the Digital Banking Strategy
The new role of competition and cooperation
Action Plan for Banks and New Players
Group Exercise

Practical information

Duration: One day training

Date: October 10, 2019

Hours: 9AM-5PM (6 training hours)

Location: Febelfin Academy, Aarlenstraat/Rue d’Arlon 80, 1040 Brussels

Additional information: This training course will be given in English

REGISTER TODAY

François de Witte

Founder & Senior Consultant at FDW Consult / Managing Director and CFO at SafeTrade Holding S.A.

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How will Open Banking impact Treasury?

| 20-9-2019 | treasuryXL | BELLIN

Interview with Karsten Kiefer on open banking, APIs and the future of bank connectivity

With financial data increasingly digitized and moved to the cloud, disruptive approaches have become available to fintechs and corporates have gained access to new and revolutionary opportunities. One such opportunity is open banking, also known as API banking. In this article, we take a closer look at open banking and the potential benefits of current trends for treasurers. Karsten Kiefer, Product Manager and Solutions Manager at BELLIN, introduces us to the latest developments and assesses their impact on corporate treasury.

The European Payment Services Directive 2 (PSD2) sets rules for access to payment accounts but it has also caused great uncertainty. Is this the beginning of open banking for everyone in Europe? And what does the directive mean for treasury?

One of the provisions of PSD2 forces European banks to provide a standardized access interface, known as API, to third parties, which enables technical access to the bank’s customers’ accounts. This is an attempt by the regulator to break up the banks’ monopoly on account information and to boost competition amongst payment service providers.

The directive clearly stipulates the type of information banks have to give access to and the scope of services associated with it. For example, when it comes to payments PSD2 API access is restricted to SEPA single payments. Few banks, if any, will support bulk payments, FX payments etc. as additional services. This is why for the time being this technology is only of limited use to corporate treasury. It is definitely in no way comparable to established channels such as EBICS, H2H or SWIFT.

Where do you see the main advantages of open banking for treasury? When will corporate financial departments adopt open banking?

Changes have been flooding the international payments sector, and open banking is only one of the waves to ride. Demand is driven by developments in the consumer goods sector, where mobile, real-time payments are rapidly gaining ground, with providers springing up all over the place. 24/7/365 availability of payments services is highly relevant for treasurers. This has also been the driving force behind developments in connection with established channels, such as SWIFT or EBICS, including the SWIFT g4C technology that enables real-time information on payment transactions. For corporates who use a treasury management system with an integrated payments platform, open banking has already become a reality.

How does open banking with a treasury management system work?

A treasury management system with an integrated payments platform, such as tm5 by BELLIN, enables multi-channel access to banks. There are standardized channels for specific regions, such as EBICS, or the BELLIN SWIFT Service that provides access to the global SWIFT Network. Another connectivity option is direct host-to-host connections to specific banks and their networks. APIs represent an additional technology to connect banks and corporates, and in the future, this will become more and more relevant. Today, the BELLIN Payment Gateway enables access to real-time payment transaction information and a company’s global financial status.

Are there any challenges associated with API interfaces?

Many of the banks today that can connect via two or even three channels are working on APIs. So this will become an additional bank connectivity option. However, we need to bear in mind that such an API must bring added value and additional benefits. Otherwise, you are better off using one of the more established channels. Looking at the API specifications of several major banks in more detail, you will realize that there are minor standardization options at the moment. Everyone is talking about APIs but in fact, every bank has their own! Ultimately, it is irrelevant for the customer or the user which technological options we have available to connect a financial institution.

What new aspects does API connectivity bring and what makes it special?

The main difference is the way in which information is made accessible. Intraday account statements are a perfect example. Many banks provide this information at least once or twice a day, some more often. The times vary according to bank, which makes it difficult to gain a complete overview of your financial status at any one time. For EBICS and H2H connections, BELLIN has to actively retrieve this information for clients, while the banks send the data to a company’s BIC in the case of SWIFT Service customers. Corporates have little or no insight into any fluctuations outside these times.
API technology enables two systems to communicate directly. In theory, any API request to a bank requesting intraday account information or the current financial status could be processed and responded to in real time. This would be a huge leap towards the concept of an “instant treasury:” It would enable treasurers to trigger information directly and to receive the latest data at the touch of a button. Unfortunately, few banks are able to offer such a service, as it would require not just an interface but also powerful and modern banking systems.

So the flood of information triggered by APIs very quickly hits a wall, reined in by banking systems. Do you see any solutions to this problem?

So-called WebSocket interfaces are a step up from APIs. This technology would see a bank notify a client as soon as any relevant data has become available. Corporates could retrieve this information promptly and would always have the latest information. This is a very intelligent reversal of the logic described earlier and would get rid of any redundant data communication. Customers or their service providers would only ever communicate with a bank when the bank has notified them of available data. You could compare a notification that money has been credited to your account to notifications sent by LinkedIn or YouTube: As soon as something new happens, it’s shown to you and you’re notified.

Will these new technologies mean the end for existing solutions such as EBICS?

Not at all. EBICS is a great example. The EBICS standard is long established and thousands of corporate clients use it. Banks have invested a lot of money in these systems. Intelligent updates to these standards will be the key. The German Banking Industry Committee, the industry association of the German banking industry, is planning specifications for 2020 and working on introducing technology that will enable banks to notify corporate clients as soon as relevant data is available to be retrieved from the EBICS bank server. From a technological point of view, this will be a combination of the established EBICS protocol and the latest API technology. I think this is the perfect combination of old and new standards and brings enormous advantages to customers with little or no adjustments required.

What would you recommend treasurers do right now?

My advice would be to remain calm and wait it out. At the moment, APIs and the opportunities associated with them are being hyped up. But in reality, very few banks have actually developed new services.

At BELLIN, we develop and integrate APIs every day, whether it is to communicate with transaction repositories, to integrate SAP systems or to connect our BELLIN Connect app. We have decades of experience when it comes to banking communication and have just launched API projects with three major international banks. Our aim is to create viable use cases that add value to our treasury clients.

Authors:

Karsten Kiefer
As a Product Manager and Payments Specialist, Karsten Kiefer is responsible for any payments topics at BELLIN. The main focus of his work is on enhancing software functionality, supported payment formats and communications channels. Karsten has a background in IT and has over 20 years’ experience in the payments sector.

Anja Biehler
Anja has a PhD in German Philology and trained in a business communications agency before gaining valuable creative and marketing experience in a number of advertising agencies. For five years, she was in charge of the communications department of a renowned, private financial service provider. Her last position before joining BELLIN’s Global Marketing & Communications team in November 2014 was with Freiburg University where Anja was responsible for the marketing efforts of the EXIST business start-up program.

Using Blockchain for Legal Entity Identifiers or LEIs

| 19-09-2019 | Carlo de Meijer | treasuryXL

In one of its reports, GLEIF, the Swiss-based organisation which coordinates the management of the global Legal Identity Identifier (LEI-) system, suggested to use blockchain technology for identifying financial legal entities, as that would not only improve transparency and security but may also lead to broader global acceptance of the LEI.

This however raises a number of questions such as: Why could blockchain be of use for LEI and its users? What role could smart contracts thereby play? What benefits could blockchain bring for the LEI? And what does the most recent blockchain-based projects for the LEI tell us?

What is the LEI?

But first, what is the LEI? According to their website definition, “the Legal Entity Identifier or LEI is a 20-digit, alpha numeric code based on the ISO 17442 standard. It connects to key reference information, allowing clear and unique identification of legal entities participating in financial transactions. Each LEI contains information about an entity’s ownership structure and thus answers the questions of ‘who is who’ and ‘who owns whom’”.

In other words a LEI is a uniform way of keeping track of financial legal entities. They are global and have no borders at all for accurate and trusted identification of companies around the world. Looking in that way, the publicly available LEI data pool can be regarded as a global directory, which may greatly enhance transparency in the global marketplace.

The management of the LEI system is coordinated and supported by the above mentioned Global Legal Entity Identifier Foundation (GLEIF), while registrations are performed by so-called LOUs or Local Operating Units.

GLEIF and Blockchain

In their report on the LEI to the Financial Stability Board (FSB) in 2012, the GLEIF stated that “the design of the global LEI system would be premised on a ‘logically’ centralized (meaning not physically centralized) database that will appear to users to be from a single seamless system”.

GLEIF however recently recognised that the organizationally federated operating model used for the LEI in 2012, could be upgraded to a technically federated operating model: the distributed ledger model (DLT). This upgrade could potentially provide the same DLT platform for both the LEI and the UPI (Unified Payments Interface), of which the GLEIF is supposed to be the natural repository. This distributed design has always been a longer term goal for the global LEI system.

Present challenges for LEI

The LEI provides a global standard for the representation of identity as well as a standard validation rule set. Both elements however are subject of a very detailed compliance program in order to ensure proper issuance and maintenance of LEI and data quality.

Nowadays collection and storage of data is conducted in multiple country or regionally located operating units (LOUs). Each has their own databases (there are more than 30 at present in the LEI system and a large number of separate ones for each trade repository), and send their data daily in batch overnight processes. LEI data is sent to the GLEIF. Trade repositories send their data to multiple regulators and to central collection facilities depending on the jurisdiction. All regulators and trade repositories maintain their own data copies of identifiers for products and counterparties, and for trades.

This method bears in it a number of challenges, in terms of non-optimal transparency, security and risk issues where blockchain could be of help.

Blockchain and Identity Management

When it comes to use cases for blockchain, security is one of the serious items that comes in many minds. Identity management is one sector of industry that is supposed to provide high-level security to those who rely upon it to keep their data safe. But in reality security is not always what they get. The digital age has introduced new challenges in terms of preventing identity fraud and other criminal abuses for private people but increasingly also for corporates.

Nowadays there is an increased need for strong, multi-step security that identity management services should bring. The widespread adoption of blockchain technology to ensure that any number of these centralised databases are ‘not compromised’, should give enough arguments for the identity management industry to embrace this technology.

Some use cases for identity management

There are a number of interesting blockchain use cases in the identity management field. These include issues like identity verification, non-custodial login solutions, self-sovereign identity, secure identities for the decentralised web etc. These use cases have all proved their usefulness in such an environment.

Identity verification

Blockchain’s multi-step, multi-factor identification processes have proven to work and are already implemented by a number of companies. Admittedly, it is hard to imagine why the blockchain authentication model has not (yet) gained more mainstream adoption, especially considering the stakes of stolen identities and credentials.

Non-custodial login solutions

With non-custodial logins based on the blockchain, there is no longer need of a central entity who holds the power over user names, pass words, and the database that controls them. By removing the custodian of these credentials and replacing them with public and private keychains for logins, the former centralised entity can still ensure that ‘those logging in are who they say they are’, without holding a central database that hackers can easily acquire and use as ransom money.

Reduce third parties’ involvement

Blockchains could also help reduce the number of third parties while still maintaining a user’s identity. One solution could be that a user would store their data and identifiers on a blockchain which they could use throughout the internet, instead of granting each site or service their personal data and credential time. A second proposal is built on a similar blockchain containing the user’s data but allow third parties to access the data with their consent.

Smart contracts for Identification services

Using blockchain for the identification services including the LEI would preferably be in the form of so-called smart contracts. These contracts are ‘included and coded’ applications and data representing the life-cycle processes of a trade. It is stored and activated across a networked database – the distributed ledger – which itself is networked across the Internet.

In other words, a smart contract is self-actuating, based on standardized contract terms that is translated into standard trade life-cycle processes imbedded in coded applications. The smart contract acts on standardized data sets, setting its outputs in conformity to each participant’s processing requirements.

A smart contract requires data standards, including the LEI and its reference data for each participant in the supply chain; the UPI (Unified Payments Interface) and its reference data; and the UTI (Unique Transaction Identifier). It also requires process standards for each event in the life-cycle of a trade.

How could smart contracts be used for the LEI?

But how can smart contracts be used for the LEI? The central point of using smart contracts for the LEI is to treat a single record for any entity to be identified by some key as ‘atomic’. This in the sense of being administered as a single unit of data, by the authority that assigns the keys. Then the representation of a single ‘atomic’ record can be considered as a state for a single smart contract.

Each such contract would offer a method for accessing the representation, and a dynamic data structure that holds ‘revisions’ of the representation. That is, when the record changes globally, its new representation would be added to the state of the contract. Such contract can hold many revisions of the representation, bound only by the capabilities of the network’s global storage, called ‘entity contract’. Together with entity contracts, someone can devise one or more ‘master contracts’, that keep track of individual entity contracts and make accessing an easier process.

What approach for the LEI?

The use of permissioned and private blockchains or distributed ledgers for identity management purposes such as the LEI will require mapping between real world entities. This is hosted via cryptographic algorithms creating public/private keys pairs linked to reference data. The owner of the private key can write into the chain.

This however raises a number of major issues: Firstly, are we going to see multiple digital IDs depending on the application or are we going to use one ID to access all applications. And second, what is the appropriate management for all these IDs.

There are a number of possible scenarios:

One could use identity labels i.e. unique keys in the blockchain/DLT application. That means using the LEI in a distributed ledger system for tracking financial instruments. This is de facto the standard approach due to legal and regulatory requirements.

Another scenario is using blockchain/DLT for managing the LEI creation and management itself. This however should be seen as a longer term project. There are still many open questions but this approach bears interesting aspects for the further evolution of the LEI system.

MakoLab LEI.INFO and Graphchain Proof of Concept

An interesting project that should be taken seriously for further development is the MakoLab LEI.INFO system. Polish-based MakoLab, a Digital Solution Agency for the industry, last June announced the deployment of their production grade Blockchain-based LEI system.

This was the result of two Proof of Concepts (PoCs) for a radically new blockchain LEI system, based on the private Hyperledger Indy blockchain, using the innovative GraphChain database that is much more flexible than any standard existing system available today. These PoCs allowed MakoLab to investigate deeply the possibility to construct a system which represents the ‘highest level of both technological and organisational security’ and is completely decentralised.

Hyperledger Indy Framework

Given the vulnerability of the data, the suggested architecture for LEI is that of a so-called consortium type of blockchain that works on Hyperledger Indy. This is a blockchain model where the consensus process is controlled by a pre-selected set of nodes. The network of Hyperledger Indy nodes thereby runs as a private, permissioned blockchain for the Global LEI System.

In this model different nodes are used. User nodes that participate in the global blockchain as passive users. They can see all the data stored in it, but cannot create or edit anything. Registration nodes having all the properties of the User nodes plus the ability to provisionally add new LEIs to the system. However, such newly added LEIs are not visible on the system until the LOU nodes confirm them through the ‘Proof of Authority’ mechanism. And LOU nodes that have all the properties of the Registration nodes plus the capacity to confirm the new or modified LEIs as valid. Application of the blockchain technology with LOUs running their own nodes, would make the LEI system much safer and more reliable.

GraphChain

End June MakoLab announced the full production version of the innovative GraphChain for the LEI.INFO infrastructure. They thereby created a conceptual proposal how the entire LEI system could run on GraphChain. GraphChain should be seen as a new innovation of creating a blockchain compliant distributed database. The main idea behind GraphChain is to use blockchain mechanisms on top of an abstract RDP (Resource Description Framework) graph data model, that is used for data publishing and interchange on the web.

GraphChain is thereby defined as a linked chain of named graphs specified by the GraphChain ontology and an ontology for data graph part of the GraphChain; a set of general mechanism for calculating a digest of the named RDF graphs; and as a set of network mechanisms that are responsible for the distribution of the named RDF graphs among the distributed peers and for achieving the consensus.

The data graph model describes the semantics, or meaning of information and stores these data as a network of objects with materialised links between them, thereby managing highly interconnected data. It thereby uses graph structures with nodes, edges and properties to represent and store data.

LEI.INFO system

The new functionality allows cryptographic verification of the accuracy or usefulness of the underlying LEI data. The LEI.INFO system uses the RDF graph data model to express LEI reference data as semantic data, that can be verified against the network of Hyperledger Indy Blockchain. This LEI.INFO platform allows to get instant access to the database of entities holding LEI’s and as a result to find a reliable supplier, partner or customer.

LEI.INFO offers a wide range of LEI-related services including a new LEI registration process, resolution of the LEI codes for both humans and software agents, Data Analytics Solutions and integration services for KYC and financial information consolidation applications.

What may blockchain bring for the LEI?

From what is said before, it should not be difficult to see how blockchain and a single database that could be updated in real-time, securely maintained through encryption technology, distributed and shared by all of the participants could benefit those organisations who use the LEI. The reconciliation of the various copies of what is intended to be identical data sets could be done in real-time.

Managing LEI on blockchain delivers transparency and ensures the necessary trust and certainty optimal for combatting financial crimes, streamlining various administrative processes like onboarding, and truly knowing corporate customers, partners, and other businesses. This could ‘revolutionise’ the oversight of the financial industry. As a result of this all, it may lead to firmly reduced resources and costs of the validation process required for conducting due diligence about those entities.

McKinsey, the global consultancy estimates that the largest financial institutions alone can each save $1 billion in costs through a simplified portfolio of data repositories. ISDA members, many being the largest of financial institutions, are envisioned as direct beneficiaries of such savings.

Going forward

Blockchain technology could be of great help for the Global LEI system. The MakoLab project is thereby a very interesting one that deserves further investigation.

This LEI.INFO project however is just a first step in their research and development process with this technology. Taking into consideration the growing potential of the solution, MakoLab is “working on further-enhancing the LEI resolver with other top-class solutions – semantics particularly – as well as translating blockchain into other business areas” .

In the end such an architecture of the new LEI system will enable ‘thousands of registration authorities from multiple countries to participate in the new LEI creation’, thereby opening the path for the true global adoption of the system.

Carlo de Meijer

Economist and researcher

10 Steps for an effective and efficient credit card policy

16-9-2019 | Marco Lassche |

Corporate credit cards are often used by employees to pay their expenses during business trips.

In this article we explain how you can easily control the use of corporate credit cards.

What are the advantages of corporate credit cards, apart from the old-fashioned declaration on paper (including receipts)?
How do you set up an effective and efficient credit card policy?
How do you use simple tools to ensure that the accounting process of credit card statements runs quick and smooth?
How can you ensure that costs are controlled or even reduced with a simple analysis tool?

Advantages of business credit cards

The advantage for the employee is that she does not first have to pre-finance the expenses herself and later declare the costs based on a stack of crumpled receipts.

Advantages of business credit cards for the company are countless:

A free short-term credit line.
Purchases are often insured, as well as misuse of the card.

By using a number of simple tools, many more benefits are added:

Time saving for accounting through automatic processing of credit card statements in the accounting system. Every transaction on a credit card statement contains a cost category code (also called Merchant Category Code). These codes can be easily linked to (sub) ledgers.
Analyzing credit card expenses becomes easy because there is direct insight into the business costs incurred by staff. This means you can also manage cost savings. You can use a special tool for these analysis, but a pivot table in Excel works fine as well.
Employees scan their receipt via an app on the phone and can then throw the receipt away. No more hassle.

10 Steps to implement a good credit card policy

A good credit card policy is essential for optimizing credit card use within a company. So make sure that it is clear beforehand what the rules of the game. Equally important, maintain them as well. It is also important that the management confirms itself to the credit card policy. Management should be a good role model.

10 Steps:

Determine the credit card company that fits the best to the company. (VISA/MASTER/American Express).
Determine who within the company is eligible for a credit card. Usually this will be the management and the people in the sales team.
Determine who within the company is responsible for the credit card management. Place this with the Treasury department or the accounting department.
Determine the credit card limits. An employee who always travels to cheap countries does not need such a high limit as an employee who always travels to expensive countries.
Determine the costs for which a credit card may be used. Think of restaurant, taxi, hotels. We do not recommend to allow using business credit cards for private expenses, as this causes extra work for accounting.
Determine the rules for matching the credit card statement with the receipts. A simple rule is to require that within 30 days after receipt of the credit card statement, the scanned receipts must be linked to the statement by the employee. This is also important for an audit. Of course it is true that in certain countries, people do not get a receipt e.g. a taxi ride, so flexibility is required in this. But hotels, restaurants etc., should be able to provide a receipt at any time. Also emphasize to employees that a payment confirmation from a payment terminal is not a receipt.
Determine who approves the spending on the credit card statement. It makes sense to place this with the department manager or CFO. This approval process can be setup in the same online tool in which the credit card statements are uploaded.
Determine the consequences for not following the credit card policy. Some employees with a corporate credit card are very careless or feel like a kid in a candy store. So consider consequences for not uploading receipts, abuse etc..
Have employees who receive a credit card review the policy and sign it. Make sure this policy is not too long.
Ensure that employees hand in their credit card immediately upon termination of employment and block the credit card.

Cost savings on credit cards

Easy and quick gains:

Limit cash withdrawals by credit cards in ATM’s. Costs are often 4% of the cash withdrawal, with a minimum of around € 5 per withdrawal.
Always pay in the local currency with your credit card in non-EUR countries. Although the credit card company often charges 2-3% rate surcharge, ATM’s, hotels and restaurants charge much higher surcharges to pay directly in EUR.

Other cost savings:
There are more cost savings to realize. E.g. there are still a lot of companies in which employees can book their flights and hotels on their own preferred website and pay it by the corporate credit card. To get better insight and cost control you can consider the implementation of a corporate travel portal, in which the employee can still book on its own, but you can control costs much better.

Please feel free to contact me if you need any further information or assistance in setting up a framework to control your corporate credit card costs.

Marco Lassche

Founder and Owner of at Bedrijfskostenexpert
Treasurer and Project Manager at Van Caem Klerks Group
treasuryXL Ambassador

What is the cloud based system WalletSizing?

13-9-2019 | Vallstein |

What is WalletSizing?

WalletSizing® is a system in the cloud focused on giving full transparency to corporates on their spending and profitability for banks. All their banks globally, regardless of the number of banks and the type of products, varying from Fx, Cash Management, bonds, lending or asset management. Vallstein takes in all data a corporate has available on the products and invoices from the bank in an innovative easy way for the corporate where they do not need to do much with the data. Vallstein translates, maps and upload it into the system after which the corporate has all insight in their banking landscape and can do easy analysis with all the features the system offers.

What distinguishes WalletSizing® from its competitors?

Firstly, WalletSizing® looks at the entire bank relationship, across all product areas, not just transaction services or credit, but everything that is being used from all banks that maintain a relationship with the client concerned. Secondly, Vallstein takes an explicit view through the eyes of the bank on the relationship, taking all relevant Basel III /IV regulation into account. This kind of transparency is absolutely essential to identify the real room to negotiate and ensure terms and conditions that are truly fair for both sides of the table. Thirdly: technology. Vallstein provides analysis for clients maintaining multiple bank relationships across a multitude of countries with many different banking products, which is impossible to build and let alone maintain in spreadsheets.

Who will benefit from using this system?

CFO’s and Treasurers will benefit by having full transparency in the bank relationships and as a result they will have more meaningful bank reviews, RFP’s and Negotiations. Depending on the objectives a corporate has, it will allow them to be fair in their distribution of business towards banks, limit the number of banks used globally or keep banks costs in line with market practice as will be indicated by the system’s benchmarking capabilities. Where cost saving was an objective, corporates saved 26% on their bank costs on average, across the entire relationship, all products.

About Vallstein
Vallstein is the leading provider of Bank Relationship Management (BRM) solutions with a simple mission: no more black box but instead provide the full transparency that enables development of long term sustainable banking relationships.
Founded in 2000, Vallstein has a multinational team of experts dedicated to developing and implementing cutting edge financial technology solutions to help corporations constantly improve their BRM.
Having calculated and analyzed thousands of Wallets over 18 years, Vallstein brings together a unique combination of big data, innovation, analytical capabilities and banking knowledge. This provides the best practice in the optimization of bank relationships.

Is your company struggling with liquidity forecasting?

| 12-09-2019 | treasuryXL | Cashforce |

Is your company struggling with liquidity forecasting?
Find out how you can transform your forecasts from bad to best.

Too much manual effort and too little time for analysis, a statement (too) many treasurers can relate to. According to PwC and their Global Treasury Benchmark Survey, still 87% of treasurers use technology from the 1980s (i.e. spreadsheets) or have a disparate set of ERP systems, multiple bank websites and email. Consequentially, this leads to a lack of visibility and makes it very arduous to answer critical questions like “Is my company over borrowed, underinvested or overexposed?”.

An inability to answer this question not only constrains treasury’s ability to measure its success but could harm the future viability of the company. With automated and accurate forecasts & simulations within reach, this is a clearly avoidable risk.

During this one hour webinar, Bruce Lynn of the FECG and Nicolas Christiaen from Cashforce discuss how to radically optimize your cash forecasting workflows by:

Identifying the operating risks by utilizing existing resources
Quantifying the benefits to be gained by examining existing “flows” regarding cash, accounting, work, and information, whether across treasury, the business units or other financial parts of the company.
Using a step-by step approach to set up an accurate & automated forecast

About Cashforce

Cashforce is a ‘next-generation’ digital Cash Forecasting & Treasury Platform, focused on analytics, automation and integration. Cashforce connects the Treasury department with other finance / business departments by offering full transparency into its cash flow drivers, accurate & automated cash flow forecasting and working capital analytics. The platform is unique in its category because of the seamless integration with numerous ERPs & banking systems, the ability to drill down to transaction level details, and the intelligent AI-based simulation engine that enables multiple cash flow scenarios, forecasts & impact analysis.

Cashforce is a global company with offices in New York, Antwerp, Amsterdam, Paris & London and provides Cash visibility to multinational corporates across various industries in over 120 countries worldwide.

De invloed van valutarisico’s is groter dan gedacht

| 10-09-2019 | Erna Erkens | treasuryXL |

“Valutarisico krijgt te weinig aandacht in de AGF-sector en dat is heel zorgelijk,” zegt Erna Erkens van Erna Erkens Valuta Advies. Juist in de AGF-sector wordt heel veel zaken gedaan buiten de Euro zone, bijvoorbeeld in Engelse Ponden of Amerikaanse Dollars. “Als je weet dat 1 cent koersbeweging in EUR/USD over USD 1 miljoen al bijna 8.000 Euro kost, dan moet je wat dat betreft heel goed op je winkeltje passen. Een koersbeweging van 1 cent in EUR/GBP over 1 miljoen GBP kost zelfs bijna 14.000 Euro.”

Erna constateert dat in de AGF-sector de kennis over valutarisico niet in overeenstemming is met de invloed die dit valutarisico op het resultaat van bedrijven kan hebben. Soms is er een gebrek aan kennis en wordt valutarisico zelfs een beetje eng gevonden. “Daardoor komt het onderaan de stapel te liggen, terwijl de invloed die het heeft op de bedrijven heel groot is.”

Zij geeft aan dat bij grote transacties kleine koersverschillen al gauw duizenden Euro’s kunnen kosten. “Het is echt zonde als dit onderwerp niet de aandacht krijgt die het verdient.” Erna draagt bij aan de bewustwording rond dit onderwerp met haar dagelijkse nieuwsbrief en de trainingen en workshops die zij geeft op dit gebied.

Marges
Specifiek in de AGF-wereld signaleert Erna dat er door te hoge marges vaak te veel voor valuta’s wordt betaald. Zij brengt de betaalde marges in beeld en kijkt of deze nog wel bij de huidige marktomstandigheden passen. “Als je bij een transactie van 1 miljoen USD 20 punten van de marge kunt halen, kun je 1.600 Euro besparen. Zeker bij AGF bedrijven waar de marges toch al heel klein zijn, is dit belangrijk.”

Afdekken
Ook observeert Erna dat nog heel vaak betalingen in andere valuta gewoon op de Euro-rekening binnenkomen of ten laste van de Euro-rekening worden betaald. “Je hebt dan geen enkele invloed op de koers.” Beter is om als er vaste contracten, bijvoorbeeld voor een jaar, zijn afgesloten deze te aan te kopen of te verkopen met een termijncontract. Dit maakt het mogelijk om nu – op het moment van de offerte of contract – de koers vast te leggen voor een datum in de toekomst. “Als bijvoorbeeld de Ponden een gunstige koers hebben ten opzichte van waarmee je hebt gerekend bij het afsluiten van je contract, kun je beter nu die Ponden al verkopen. Dan ben je valuta risico kwijt.”

Vaak wordt AGF ook geleverd zonder vast contract waardoor er vooraf geen inzicht is in wanneer de vreemde valuta betaling komt. Als er een verschil is in de datum dat het termijncontract wordt afgerekend en de echte geldstroom, kan een valuta swap dit probleem oplossen. “Daarin kun je de cash-flow regelen zodat het niet meer zoveel uitmaakt wanneer je klant betaalt. Een onzeker betalingstijdstip mag nooit de reden zijn dat een valuta risico niet wordt ingedekt.”

Brexit
Ten aanzien van de naderende Brexit geeft Erna aan dat het belangrijk is voor bedrijven om zich te realiseren dat dit invloed kan hebben op het koersverloop van het Pond en na te gaan wat voor impact dat kan hebben op het bedrijf en of men dit risico wil verzekeren. Dit kan worden afgedekt met een valutaverzekering maar Erna merkt op dat vanwege de geringe marges in de AGF-sector heel vaak de afweging wordt gemaakt om dit risico niet te verzekeren. Zij verwacht dat ongeacht hoe Brexit eruit gaat zien handelsland Nederland en handelsland Engeland elkaar uiteindelijk zullen vinden in die handel. “De vraag is alleen of je als bedrijf die periode kunt overbruggen vooral omdat in de AGF-handel de marges flinterdun zijn.”

Naar verwachting zal een eventuele koersdaling van het Pond omdat het VK de EU verlaat zonder overeenkomst leiden tot handelsbelemmeringen. “Het wordt moeilijker om als het Pond minder waard wordt producten in Euro’s af te zetten omdat dit veel duurder wordt.” Uiteindelijk verwacht Erna niet dat het VK de EU verlaat zonder deal omdat de belangen te groot zijn.

Erna Erkens

Owner at Erna Erkens Valuta Advies (EEVA)

How do you find your Interim Treasurer?

| 09-09-2019 | by Pieter de Kiewit |

Treasury recruitment organisations and treasury consultants are both involved in interim treasury assignments. They often approach the same candidates but work with a different cost structure. Expertise of the service provider and interim manager are always important. If capacity is most important in your assignment, a recruiter might be best. If the project result dominates, a consultant.

Between the times of life-time-employment and the current flexible employment contracts some decades have passed. The Dutch have been among the trailblazers in making the labour market more flexible. These developments are being applauded by some and regretted by others. In our niche, corporate treasury, employers and employees are mainly positive. In this article I want to focus on two channels through which you can find your interim treasurer.

In my opinion the underlying agreement for labour, contractor or consultancy is secondary to what the company is looking for. If they are looking for a long term (a year or more) solution with a predictable set of tasks, an interim solution is not appropriate. Interim will not offer the stability and will cost too much.

Obvious reason for choosing an interim solution is the temporary need for capacity and/or expertise. This can be because you are looking for the permanent solution or the regular employee has taken a time-out. Also when you are shutting down your organisation, capacity is the dominating factor. In a build-up, implementation or crisis transition skills are important. In all described situations specific expertise, measured in experience and education, is a must. How does this help you choosing between a recruitment or consultancy firm?

When to use a treasury recruiter to find an interim treasurer

As treasury recruiters we find candidates for interim positions in various ponds. First there is a group of independent contractors with a track record in interim management, with a legal entity that can hit the ground running. Next to this group there is a group of candidates that are between jobs or just before retirement. Knowledgeable and motivated. Some of them can work from their own company, others will work through payrolling solutions we can provide. This second group is not always best in hitting the ground running but does have the knowledge level. Some of them can make the transfer from temporary to permanent employment. Most of the times the second group comes at a lower rate but sometimes need more time to bring the same results.

When to use a treasury consultancy to find an interim treasurer

Most professional consultancies work with the idea that they will solve the problems of their clients. In fee structure it is even possible to define a project and agree upon the cost in advance. A recruiter will not be able to do this. An interim manager working through a consultancy can do so with shadow management: he can call colleagues if he lacks knowledge. Furthermore the infrastructure and support is more substantial. All these benefits come at a price: the average hourly rate of a consultant is often 50% higher than an independent interim manager with a similar profile would charge.

Where recruiters and consultants overlap

In competition with consultants we often notice that we (recruiters) approach the same candidates and ask a lower price. Also it happens that an independent senior interim manager is compared with a medior consultant who is on the payroll of the consultancy. In that situation the client has to decide if he prefers apples over oranges.

Final remark and what to do?

Often all parties pretend recruitment (and other) processes are 100% rational. They are not and that is not a bad thing. You should choose for the interim manager and service provider that makes you feel good and who solve your problem. Sometimes a high hourly fee and few hours is better than a low hourly fee and many hours.

It is not rocket science but do think before you act. If you want to only steer upon results and high expertise, a consultancy is best, in other scenarios a recruiter might offer a better solution. What is your experience?

Pieter de Kiewit
Owner Treasurer Search

Platform Interim Treasury Masterclass

| 06-09-2019 | by DACT |

Masterclass Succesvol Pitchen en Presenteren
Kunnen we nog afkicken van 8 jaar monetaire morfine van de ECB?
Trends in Export financiering

De DACT nodigt je uit voor de volgende PIT-bijeenkomst op dinsdag 10 september 2019 op een bijzondere locatie: De Beurs van Berlage (Beursplein 5) , waar de DACT gast is bij AFS Group. Je bent vanaf 17:30 uur welkom, de bijeenkomst start om 18:00 uur en zal rond 21:00 worden afgesloten. Broodjes en drankjes worden door AFS aangeboden op de beursvloer.

PIT is een DACT Netwerkgroep gericht op de Treasury professional die niet in vast dienstverband zijn beroep uitoefent, maar op basis van tijdelijke (arbeids)overeenkomsten. PIT wordt bestuurd door Ingmar Bergmann, Peter Heymans, Patrick Kunz, Dennis Schmidt en Bart Steens. Tijdens de periodieke PIT-bijeenkomsten wordt er niet alleen vakinhoudelijk met elkaar van gedachten gewisseld, maar ook worden er thema’s behandeld die specifiek zien op de rol als interim professional. Zoals altijd wordt een actieve participatie van alle deelnemers gevraagd. Met name de Masterclass Succesvol Pitchen en Presenteren kan niet zonder die actieve deelname!

Voor de bijeenkomst op 10 september a.s. hebben wij het onderstaande programma samengesteld.

Introductie AFS Blue – Bringing issuing and trading debt into a digitized world door Marcel Coppejans, Managing Director AFS Group. Presentatie van AFS’ internet based platform dat is ontwikkeld om de brokerage van schuldpapier in de primaire en secundaire markt transparanter en efficiënter te maken.

Masterclass Succesvol Pitchen en Presenteren door Patrick van Gils, pitchcoach en presentatietrainer. Oprichter van TOPpresentaties. Hoe kunnen we onszelf nog beter in de markt zetten? Hoe kunnen we kort, krachtig en overtuigend communiceren? Tijdens zijn interactieve presentatie ontdek je zijn beproefde 6 staps pitch-formule en komen zaken als woordkeus, powervragen, ‘pijn & fijn’ en overtuigingskracht aan de orde. De nadruk ligt op directe bruikbaarheid en praktische toepasbaarheid. Zijn doel is “om er zelf direct mee aan de slag gaan en de vruchten te plukken!”.

Kunnen we nog afkicken van 8 jaar monetaire financiering? door Arne Petimezas, Macro Analist AFS Group. Als specialist in de Europese en Amerikaanse geld- en kapitaalmarkten wordt hij vaak gevraagd zijn visie te delen met professionele partijen en de media, zoals het Financieel Dagblad en nieuwszenders op televisie. Ook met ons zal hij zijn visie delen over het monetaire beleid van de ECB.

Trends in Export Financiering door Stephen Maduro, AFS Corporate Finance. Is het huidige instrumentarium van Nederlandse exporteurs voldoende om de export te bevorderen? Past de rol van banken en Export Krediet Verzekeraars nog in de huidige markt? Hoe kunnen Nederlandse exporteurs het beste ondersteund worden?
Hoe kan deze markt toegankelijker en transparanter gemaakt worden?

PIT-zaken

Alle geïnteresseerde DACT-leden zijn uitgenodigd voor deze nieuwe PIT-bijeenkomst, dus ook de niet interim Treasurers, zolang zij bereid zijn om actief en open deel te nemen aan de discussie; uiteraard is er alle respect voor de vertrouwelijkheid die een ieder op sommige terreinen moet betrachten.