Cybersecurity & corporate treasury – not your favourite, but beware!

| 17-10-2017 | Pieter de Kiewit |

We all have these topics we know are important but never get the highest priority. Until it is too late. Cybersecurity is one of them. Do you want to be the treasurer named in the newspapers? Finding examples and input on-line is not hard. Only this morning these articles popped up through LinkedIn:

“Hackers steal $60 million from Taiwanese bank using bespoke malware”. This is about SWIFT, technology used by many in the corporate treasury environment. This is not to shame SWIFT, what can happen with them, most likely can with other service providers.

Input from this mentioned article specifically has a focus on corporate treasury. What I think is interesting in their input: it is not only about malware. They also mention “social engineering”.

Now what to do? We all know many service providers step forward to guarantee security. Your time and budget is always a restraint. 100% security is an illusion. We will not decide for you. Perhaps we can help you start by browsing through who is offering solutions:

  • The ACT is organising an event at the end of this month:
    “This highly interactive two-day course will take you through the process of building a secure treasury environment. It covers all the essentials, from the creation of a framework of policy and delegated authority, to the way treasury should be organised to ensure maximum control of its activities. You will learn about front, middle and back office functions, regulatory requirements, controls and security essential to managing treasury and you will debate the key issues of control failure. You will learn how to create a secure environment in which treasury transactions can be managed and carried out with minimum risk of fraud or error. You will, be able to judge the adequacy of any security arrangements and make or recommend necessary changes. You will also learn how to effectively plan and execute a risk- based treasury audit that adds value and helps identify early warning signals of potential problems.”
  • Software suppliers like Reval are stepping in, offering technology connected to consultancy. Their article is an easy read, gathering a first glance.
  • And of course consultants are happy to step in. This article of PwC might give you a first idea. Consultancy fees are quite steep. A known sales strategy of consultants is describing scenarios that make you stay awake at night. Are you willing to take the risk or consider “an amateur”.

We will further inform you about the topic in the future. We wish you low risk and high wisdom.

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

Entering the Financial Markets Data environment – Review Screen Market Event

| 12-10-2017 | Pieter de Kiewit |

Last Tuesday Screen Consultants organized her annual event for the 25th time. An excellent opportunity to put the topic of financial market data on the treasuryXL agenda trough layman’s eyes.

There are a few obvious reasons why a corporate treasurer should pay attention to market data:

  • “Using old market data is like betting on a horse after the race is run”. Buying currencies and commodities without up-to-date market knowledge is burning money;
  • Accurate market data is essential in proper bookkeeping, especially in the current regulatory framework;
  • Information is one of the essential components in the pricing of financial products;
  • Knowing about the various developments influencing markets will help you create a strategy. This applies to hedging, investments but of course for the company as a whole.

With this in mind I entered the event, expecting a very dominant presence of Thomson Reuters, Bloomberg, VDW, Morningstar, Moody’s and similar firms. I did not see them but was offered a fragmented, diversified group of companies and that reminded me of the European Fintech Awards. Bear in mind: the event’s main audience are financial service providers like asset managers. Corporate treasury is for most of the providers a small portion of their client portfolio at best. Especially for the treasury with substantial excess cash, commodity traders and other heavy users going to this event will be inspiring.

For me in many of the parallel sessions, there was most to be learned. These are a few of the eye-openers I would like to share with you. “Market data is in the top 3 cost drivers at financial service providers”, “the margins of providers did not suffer under the crisis and are relatively high”, “Regulatory changes like Mifid2 will have a huge impact on the industry”. The sessions made clear that investing in understanding how markets work before you acquire data is essential. An example that stood out is the impact analyst reports have on markets, regardless the quality of their research.

I want to conclude with two questions. First, tell us about your experience in this field, perhaps the treasuryXL readers deserve more (blogs). Second, experts in this field working in financial services are being trained and certified. I think the full training would be too much but perhaps we can ask partners to develop a tailor made corporate program. As the users know, a data terminal is easily €2,000/month. The type of investments should be managed by knowledgeable staff.

Thank you for your replies,

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

Why does Apple issue a green bond? Spoiler alert: I do not know (yet)

24-7-2017 | Pieter de Kiewit | treasuryXL |

Recently we had an “inner circle meeting” of treasuryXL in which we talk about developments and the direction we want to go. One of the invitees suggested we pay special attention to sustainable financing and related topics. I agree that this topic is quite prominent and this reminded me about a recent article in which a so-called “green bond issue” by Apple is described. This was the second issuance by them and raised $1 billion. Then my corporate treasury laymen’s mind started working and so far it has not stopped about this topic.

At the start of this year Apple was in the news because of the huge pile of cash in their books. The amounts are staggering and most likely not accurate. Repatriating this cash to the US would be suboptimal from a fiscal perspective but that is a topic for another blog. The funds raised with the green bond will be used to start projects around renewable energy and buying of safe raw materials.

The puzzle for me is: if you have all this cash, why would you do a bond issue? It is a lot of hassle, why not leverage the money you have? If you think this is a smart investment, why not invest yourself?

One of my colleagues suggested they do this from a marketing perspective. I don’t know about you, but I will not buy an Apple instead of a Samsung because of a green bond. So this is not the reason I expect. Perhaps it is a risk mitigation strategy in a project Apple will invest in anyway. My question to the corporate treasury and banking community: Do you know why?

Thank you for your answer and I will try to focus on other blog topics around sustainability and corporate treasury. I am convinced more obvious are available.

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

Another interesting article about funding:

Business case – Funding strategy: how Fastned uses Nxchange

Banking license Klarna & Adyen: The end of their competitive advantage?

| 5-7-2017 | Pieter de Kiewit |

Last weeks the payment service providers (PSPs) Adyen and Klarna received banking licenses. The gap between Fintech and traditional banks is being closed with the new kid on the block entering the traditional market. I can see the parallel to Amazon taking over Wholefoods and entering traditional retail. Markets are reshaped over and over. The question I ask myself is: will these new kids be able to change how traditional retail and banking is done and make a real difference?

Compliance

As to compliance in the banking sector this might be a challenge. The regulators think that by imposing new legislation on banks they will prevent all that went wrong in the past. I think this is an illusion. The effect is an increasing demand for experts who can take care of compliance. As a treasury recruiter I know bankers, also the ones with the proper expertise are fleeing the bank because compliance is demotivating a lot of them. This results in an increase in recruitment assignments and salary levels. This is not an issue relevant for Amazon.

The upside for the PSPs in comparison to Amazon is that they will be able to work with state of the art technology and challenge traditional banks who have to work with legacy systems. As far as I know, Amazon is not planning to close traditional outlets. And retail always has had a quite modern infrastructure. I cannot see yet how they would be able play the technology trump as hard as the PSPs can.

Both modern challengers do have an obvious competitive advantage. Especially for the PSPs I wonder if the extra burden of compliance will outweigh this advantage. Both client perception and cost levels will have to be monitored closely. The interesting thing of this all is that, by the time we might be able to know, the market situation might have been flipped twice again. It are interesting times, not?

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

More to read from this author: 

Interesting transfer Joop Wijn from ABN to Adyen

 

 

“Systems om je bank buitenspel te zetten” – Verslag van mijn Financial Systems presentatie

| 23-5-2017 | Pieter de Kiewit |

Dit is een verslag en korte samenvatting van mijn presentatie die ik mocht houden op het Financial Systems evenement. Afgezien van een gênante vertraging door mijn gebrekkige Powerpoint skills was het een prettige sessie afgerond met een pittige discussie tussen experts in de zaal. Eerst een korte samenvatting:

Als Feyenoord fan ben ik dit jaar gelukkig en weet veel van voetbal, ook al speel ik het niet. Daarin ligt een parallel in mijn werk als treasury recruiter. Maandelijks krijg ik van circa 100 experts persoonlijk college en zie een veelvoud aan cv’s. Ik denk dat ik hierdoor inzicht heb in systemen die worden gebruikt om treasury processen te managen en ik zie de afgelopen decennia interessante ontwikkelingen die de laatste jaren in een versnelling zijn geraakt.

Zonder namen te noemen van leveranciers, ik doe geen software sales, heb ik een lijst gemaakt van diensten en producten die de gereedschapskist van de treasurer kunnen vergroten en afhankelijkheid van zijn bank verkleinen. Toen ik deze lijst opstelde, viel me op dat er tussen de vakgebieden cash & werkkapitaal management enerzijds en funding anderzijds interessante ontwikkelingen zijn zoals bankonafhankelijke betaalplatforms, crowdfunding en het bankkosten inzichtelijk maken. In het managen van risk zie je bijvoorbeeld trade finance in blockchain en partijen die FX transacties tegen ongebruikelijk lage marges bieden.

Banken daadwerkelijk buitenspel wordt lastig en is volgens mij ook niet het streven. Banken bashen vind ik een zeer onsympathieke hobby. Daarbij is de Fintech wereld ook nog niet volwassen met alle bijbehorende consequenties. Voor de drukbezette treasurer, voor de DGA en CFO die maar incidenteel te maken hebben met het vakgebied kunnen deze ontwikkelingen nogal onoverzichtelijk zijn. Helaas is er geen oplossing die snel inzicht verschaft. Wel denk ik dat er mooie kansen liggen voor degene die vooraan wil meelopen in ontwikkelingen.

De discussie die zich ontspon tussen financiële lijnmanagers en treasury experts ging, onder andere, over de vraag of bankkosten daadwerkelijk inzichtelijk zijn en wat de toekomstige rol van de banken zal zijn. De Powerpoint presentatie is onder dit artikel opgenomen. Ik verheug me op verdere events waar discussie rond dit thema kan worden verder gevoerd.

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

Klik hier als je de presentatie van de sessie wilt bekijken.

 

 

 

 

Review Dutch Fintech Awards: I’ll be back next year!

| 28-4-2017 |  Pieter de Kiewit |

Last Friday I had the pleasure of visiting the Dutch Fintech Awards. Diversity, technology, marketing and entrepreneurship are the key words that in my opinion describe the event best. Both contenders as well as audience were mainly Dutch. Although the language used was English, the communication style, also due to the moderator, was very “Dutch direct”. This kept the program entertaining during the pitches of companies of less relevance for me.

Dutch Fintech Awards

The event was not about parallel sessions or handing out brochures between presentations. One large, very representative room at the headquarter of Rabobank, a moderator who used interactive technology (on my smartphone!), a number of categories where three contenders pitched, an expert giving his opinion and a jury. At the end of the day the winners got awards and one of them won the event over all.

Pitches with various approaches

In comparison to previous versions of the event, I liked that there were no parallel sessions. There was plenty of time to network, people did not feel the need to skip presentations. One could notice that the pitches had various approaches: some of them were purely focused on the product or solutions as if to land extra clients. Others pitched as if to land extra funding. That made the task for jurors harder. Perhaps by coincidence, the less professional pitches were in the same categories.

The overall winner: BUX

The categories catered various target groups. Private persons could learn about financial planning tools & innovative on-line banking, SMEs about expenses management & crowd funding and large corporates about internet fraud & credit rating. I will not go into details about specific company pitches, you can read about them on www.fintech.nl. The only company I want to mention is the winner: Bux. The pitch had flair, a clear target group, a structured & smart approach and success was described in numbers. Both the proposition as well as the business case (funding!) were presented and questions were being answered with confidence.

I left later than planned, inspired, made new connections and met old friends. I will be back next year.

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

More articles of this author:

Fintech recruitment considerations

Consider a treasury intern!

Interesting apples and oranges a.k.a. the Dutch Fintech Awards

|18-4-2017 | Pieter de Kiewit

One of my friends who works in human capital development and is a psychologist, explained me once how we can increase our creative output. One of the elements he mentioned was mixing up the way information comes to you and how you digest it. For example, if you are used to create business plans  sitting behind your desk and writing, a multi-person brainstorm session might tap into your undiscovered creative potential. And the other way around: if you are talker/listener, try writing for a change.

Bearing this in mind, I always try to combine personal meetings, with calls, with reading, events and so on. For the people who know me: I am always behind on my reading. So much to read, so little time! Events and personal meetings get my creative juices flowing. Today I trained MBA students of RSM in their labour market approach, very inspiring. And I look forward to the Dutch Fintech Awards that are organized shortly.

Dutch FinTech Awards

Being a recruiter with a focus on corporate treasury, I have tried to find the Fintech Awards contenders with a relevance for the corporate treasury community. This is not as obvious as it seems, only a few are. I do not envy the jury of this event. Categorizing the contenders is almost impossible, let alone judging them. Comparing blokchain insurance with video financial services sales and a crowdfunding platform with easy on-line payments, is comparing apples with oranges. One thing is clear: some of the potential award winners are very good at attracting social media attention.

Despite their diversity, each of the companies tells a different inspiring story. Some of them are about cutting edge technology, some of them are about understanding potential clients, others are about smart entrepreneurship. One thing I am sure of is that the level of creativity of the entrepreneurs will be extremely high. I am ready to be inspired and will inform you in my review blog afterwards.

On 21 April the Dutch FinTech Awards will take place in Utrecht. A day with many international keynote speakers, provoking master classes and pitches by the Dutch FinTech 50. Make sure you register today and join this unique opportunity to meet 300 International FinTech stakeholders. Via treasuryXL you can get a discount on the regular ticket. More information

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

Banker to corporate treasury transfer – A topic as relevant as ever

| 27-3-2017 | Pieter de Kiewit | treasuryXL

In July 2016 our expert Pieter de Kiewit wrote an article about bankers who want to make a transfer into corporate treasury. With all the news about major banks laying off huge numbers of staff and the recent news that ABN AMRO asks 30 top managers to leave the bank or accept demotion, we believe that this topic is still very relevant and worthwhile to be published. Pieter de Kiewit wrote his blog based upon his observations working as a treasury recruitment consultant having meetings with many of them.

The transfer has been made many times successfully, even more it appeared to be impossible.

You have to ask yourself: “why do I want this?”. If this is your lifelong dream your application strategy will be different from the situation where your employer asked you to leave. Be honest with yourself, you know the answer. I will describe the consequence of both scenarios.

If your dream is working in a corporate treasury, you have acted upon this. Your studies included the right topics, you visited the relevant events and in your communication with clients you showed a sincere interest what their tasks involve. You projected yourself in these tasks and are able to tell why you would be good at it, why you prefer them over your banking tasks. You already knew there will be a pay cut and that is no problem. Your story is sound and the hiring manager will notice. It will be authentic and most likely you will not apply from unemployment.

If you were made redundant and will try to convince the hiring manager you always wanted to be a corporate treasurer, you will fail. Why didn’t you try before? What did you do to prepare for this step? Can one notice you understand their job?

Just tell it like it is: you studied to be a banker, you loved the job and were great at it. Times have changed and regretfully you have to recalibrate. But there is a silver lining: you have a valuable skill set your potential employer might benefit from. But here is where it gets a bit harder: it is your job to find out what the (potential) problem of you future boss is and why you can solve it. He/she will not take the effort to find out. So ask questions, match them to your skill set and do not use banking lingo. Ask your friends if they think you have an old school banking attitude (“you might receive our funding”). If so, ditch it. You do not have to beg for the job but you might mention you look forward to working together and being successful.

Good luck out there!

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

Making the most of excess cash: The optimal balance between safety, availability and profitability

| 9-3-2017 | Pieter de Kiewit | TreasuryXL|

We came across this article from our expert Pieter de Kiewit in co-operation with a candidate on De Kiewit Treasurer Search and thought it interesting enough to share it with you.

To get inflation to its target of close to 2%, the ECB has launched an unprecedented package of measures. It cuts borrowing costs, expanded its QE programme and reduced bank deposit rate into negative territory. Interest rates are expected to remain at present low levels for an extended period of time. Great for those who need to borrow money, but depressing for the return on savings or excess cash.

Many commercial banks effectively already charge a negative interest rate on checkable deposits. They charge fees in excess of interest payments (if any). The new Basel rules may involve certain costs or risks, some banks may choose to pass these to their customers. Regulatory shift will have wide-reaching implications on cash pooling, cash deposits (distinction between operating and excess cash deposits) and Money Market Funds (liquidity fee and redemption gates will be imposed). The Basel Committee postponed the meeting scheduled for Jan. 8 on new capital standards. The good news is that it will take some time (2018/2019) before new regulations become fully operational.

Many companies now hold larger cash balances due to their growing sensitivity to the economic cycle and continued need for operational funding. Excess cash is a luxury and isn’t always a problem. However, keeping it on the book is often not the answer for a company’s long term health. Excessive non-earning cash balances create opportunity costs and decrease the rate of return on equity and the firm’s value.

What are your options after minimizing the cash balance in non-interest-bearing accounts? Each business has its own goals and financial outlook. The best thing to do with excess cash is manage it appropriately in line with strategic objectives and for the best risk-adjusted return possible, without sacrificing liquidity. You can sit on it, use it to buy property or assets, or invest it in commercial paper, money market funds, other mutual funds, bonds or stocks—or some combination of these things. Whatever you may choose, the process of investing excess cash should be integrated in overall cash management, with the same fundamental principles of keeping risk low and having the right amount of cash on hand for short-term and long-term needs.
Companies tend to have very low appetites for risk when it comes to investments. It’s not their business. Their primary objective is capital preservation and maintaining liquidity, and yield is third on the priority list.

Are you looking for investment solutions spanning a range of currencies, risk levels and durations, designed to suit specific operating, reserve and strategic cash management needs? Whatever your investment goals may be, a treasurer might be able to assist you in making the right decision with your excess liquidity. If hiring a treasurer is one step to far for your organisation, you might want to consider a Flex Treasurer. TreasuryXL can bring you in contact with treasury professionas of different disciplines.

Pieter de Kiewit

 

 

Pieter de Kiewit

Owner at Treasurer Search

 

Fintech Recruitment Considerations

| 3-3-2017 | Pieter de Kiewit |

Last week one of my clients started an unscheduled brainstorm session about recruitment for Fintech companies. We ended up having quite an interesting discussion. Within Treasurer Search we see an increase in assignments in this market, both permanent as well as interim. I would like to share the result of the discussion and what our experience taught us so far.

Fintechs are interesting beasts. They are a mixture of innovations in marketing, technology and finance. Very often they are relatively small, flexible and extremely entrepreneurial. Their ownership, funding and organisation structure are non-standard. Finally Fintechs were able to avoid the regulators but do know they cannot escape them forever. The easiest examples of this are the PSD2 introduction and fiscal authorities zooming in on Bitcoin. What will be the exact consequences? Joop Wijn being recruited by Adyen might be a smart response to this.

From a job content perspective, recruitment in Fintech is quite straightforward: we are looking for skills in software, in regulations, new business development and marketing. Where it gets tough is combining skills with a start-up mentality. If you have this mentality, why be an employee and not start your own company? And does the personality of somebody being excellent in a team of five also match when the team is growing much bigger? This often leads to constantly shifting requirements and creative recruitment. I need more personal interviews because the cv is often not the proper predictor of success. All this makes my position more challenging and appealing. Using on-line personality assessments really does add value in processes like these.

I want to wrap up with a remark about bankers making the transfer to Fintech. From a skills perspective they are a good match and often served the proper clients. Hurdles they have to overcome are working within the mentality of a small company, with little support and a very diverse number of tasks. Together with a non-banking remuneration and a non-banking work-life balance the number of hurdles is too high for many of them .

What successful Fintech recruits did you see recently?

 

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search