Corporate Treasury Technology Roadmaps
25-09-2023 | Technology is changing the way many businesses work: with online commerce, many traditionally B2B businesses are moving to B2C
Internal Treasury Relationships
17-07-2023 | “No man is an island”. The phrase comes from the 17th century English poet, John Donne (it has since been used in a popular song….). Nowhere is this truer than in a modern enterprise.
Counterparty Risk – A Reality Check
03-07-2023 | Risk management. Every treasurer includes this as part of their job description, and we are rightly proud of what we do in this area. But, every now and again, we get a reality check. How good are our processes?
AI & Robotics in Corporate Treasury
12-06-2023 | How corporate treasurers are using AI and Robotics – a detailed report produced by ComplexCountries
Approaches to Investing Trapped Cash
23-05-2023 | All international companies put a lot of effort into avoiding having cash trapped in emerging countries.
FX & Currency Hedging Policy Review
10-05-2023 | FX and currency hedging are complex topics, which generate a lot of discussion in most companies. We held this session to see whether members are changing their hedging strategies in response to the recent increase in currency volatility, coming after a period of (relative) stability.
Transacting with Sanctioned Countries
17-04-2023 | At CompleXCountries, it is our mission to provide a forum where treasurers can openly discuss issues and share experiences. We then publish the essence of the discussion, but in a format that respects the need for confidentiality – though it is valuable general information, there is no upside to telling the whole world your specific company has had a problem with Bank A, or that you find country B’s exchange control regulations difficult to handle.
Treasury Policies & Processes for Crypto Transactions
02-02-2023 | treasuryXL | ComplexCountries | LinkedIn |
This call took place five days after FTX filed for bankruptcy. However our discussion did not dwell on crypto as an investment (We haven’t found a treasurer who would). The interest for treasurers is to help their companies understand the business opportunities of the metaverse, and that isn’t going away.
According to Gartner,’ [https://www.gartner.com/en/articles/what-is-a-metaverse] by 2026, 25% of people will spend at least one hour per day in a metaverse for work, shopping, education, social media and/or entertainment’, and…’A metaverse is not device-independent, nor owned by a single vendor. It is an independent virtual economy, enabled by digital currencies and non-fungible tokens (NFTs).’
So it’s no surprise that many companies are developing strategies to capitalise on what could be a massive business opportunity. Participants in this call comprised treasurers representing companies at different stages of this journey, all facing the challenge that the regulatory and financial infrastructure available is at an early stage of evolution.
- About half of the participants are still investigating the use of crypto and exploring how it works in case it does evolve within their businesses, but still not necessarily wanting to accept crypto or handle crypto within treasury operations.
- Risk management to enable safe use in Corporate Treasury remains paramount and it isn’t easy.
- We are seeing continued evolution around the NFT space and using crypto for settlement. But it continues to be quite limited.
- Accounting requirements for how crypto currencies are handled are still not clear and not necessarily sustainable for the future. Regulations are going to evolve.
- It is fascinating to hear, for the first time, crypto working capital is being used to match crypto receivables to payables in certain types of crypto currencies, e.g. Ether.
- In the last 12 months companies have started to buy land in the metaverse in order to understand how it works as a marketing tool.
- Selecting crypto currency platforms is challenging and KYC with some is a (reassuringly) painful experience. The providers discussed in this report include: Etherium, Coinbase, Mt Pelerin, Bit Panda and Anchorage.
- For the most part, banks are watching the space and have yet to come up with solutions for corporates and CBDCs are at an early stage, but one thing we can be sure of is that there is a lot more to come on this topic.
Crypto has clearly not gone away for corporate treasurers and I’m certain we’ll see further uses going forward. There is a huge amount of detail in this report, which is essential reading for any treasurer wishing to understand the challenges or benchmark their processes.
What is possible in Complex Countries for Treasury?
26-01-2023 | treasuryXL | ComplexCountries | LinkedIn |
ComplexCountries reports detail how corporate treasurers approach challenges in complex countries, across associated treasury processes and how they adapt to economic and regulatory changes.
Their reports cover a wide range of topics associated with treasury processes in these countries, and how they are impacted by economic and regulatory changes. This includes how corporate treasurers approach currency risk management, compliance with local regulations, and maintaining cash and liquidity in the face of political and economic instability. The goal is to help treasurers navigate these challenges and protect their company’s financial position.
Find below some of the free reports detailing complex country challenges for treasurers
The Impact of Russian Aggression on Regional Treasury & FX
13-12-2022 | treasuryXL | ComplexCountries | LinkedIn |
This call was held at a point in the conflict where Ukraine had made serious inroads into Russian held territory, and there was a lot of talk about the potential use by Russia of nuclear weapons. So, one of the questions was whether treasurers are expecting a nuclear escalation, a spread of the conflict, and what to do to prepare for it.
None of these concerns were mentioned. For most companies, the business in the countries surrounding Russia and Ukraine is minimal. The bigger concern is, and remains, the impact on the business outlook in the rest of the world, the impact of increasing interest rates, inflation, and logistics issues – though logistics seem to be improving.
Instead, most participants continue to do business in Russia – mostly because they are in industries that benefit from the health and humanitarian exceptions to sanctions. In other cases, the business is essentially local, but uses the corporate brand – this means care must be taken when withdrawing. Having an exception from sanctions still leaves issues:
- Even if your currency transactions are legal, a lot of banks refuse to handle them, because they do not want to take the risk of dealing with the country.
- Many banks withdraw, reducing the choice of service providers. There was a lot of discussion about Citi – most participants use them, but there has been some confusion as to whether they are staying. The message to all participants is that they are.
- Even when cross-border transactions are processed, there can be a lot of delay: the banks’ compliance departments examine everything very closely – but they are overworked.
- The definitions of sanctions exempted products are inconsistent between various sanctioning groups (notably, the US and the EU), and they leave logical inconsistencies
- The sanctions and regulations on both sides are something of a moving target, so compliance can be challenging.
- There was an informal trouble zone in the countries surrounding Russia: Georgia, Kazakhstan, etc. This business is now moving to USD and EUR, which has reduced liquidity.
Despite this, our participants found it is generally possible to make payments into and out of Russia, even if the process can take a long time. Banks are moving to close offshore rouble accounts, especially in London, but they are being flexible over deadlines. Dividends are definitely not allowed, but most other types of payment seem to be possible. While some participants continue to move towards the exit – protecting local employees remains a priority – other are finding that their business in Russia is doing surprisingly well.
In terms of banking, everyone seemed to be using Citi [this discussion took place before Citi announced their withdrawal from Russia – from March 2023], though most were opening accounts with Raiffeisen as a backup. This is a return to the Communist era, when Raiffeisen was the main conduit for payments to and from Russia.
Bottom line: for our treasurers, the main concern is slowing economic growth in the west, increasing energy prices, higher interest rate and inflation. This is impacting their main business, which is typically not in Eastern Europe. As for Russia itself, people continue to move towards the exit – but those who have to stay, for mostly humanitarian reasons, are finding that business is complicated – but it continues.