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What is Treasury? By Marco Lassche
10-10-2019 | Marco Lassche | Kendra Keydeniers
What is treasury?
Have you ever asked yourself the question, “what is Treasury?”. Many people will think about pirates and big see ships that sank deep into the bottom of the ocean including their ‘treasure’. A mystery treasure map will lead the finder to a treasure worth a lot of money. In some way Treasury and Treasure have definitely similarities, it is about money and other valuables.
Find out what Treasury is……
Treasury
Treasury or Treasury Management is the task to manage the firm’s liquidity and mitigate its financial and operational risk, with the goal to safeguard an organizations’ holdings. Let’s make this more specific. In each organization treasury tasks exist, regardless if the organization is big/small, profit/non-profit, nationally operating/ multinational. Although entrepreneurship is always bearing risk, this should be limited to a certain extent in order not to jeopardize the survival of the company. For each company this is different. For a company like Apple with a net profit margin > 20% losing 4% on its FX exposure has a much smaller impact on profitability, than for a WallMart with a net profit margin of 2-3%. In small organizations treasury is mostly done by the CFO or finance department. Bigger organizations have their own treasury departments, controlled by the CFO. In general, the bigger and more international the organization operates, the bigger and more complicated the tasks of treasury get.
3 main Treasury Categories of Tasks
Treasury management, can be divided in 3 main task categories.
a. This is mostly the day-to-day operations. Make sure that payments that are due are being paid in time to the correct account.
b. Manage your bank accounts in an effective and efficient way
Although the basic tasks for treasury remain the same over time, the content of the tasks evolves over time. Due to external factors like technology, regulations or new financial products, some tasks are less time consuming nowadays then they were in the past.
The future treasurer
A treasurer is someone who manages and oversees the treasury side of financial management of an organization. Tasks like bank selection, reconciling bank statements and managing cash flow are typical for a treasurer.
Payments these days can be automatized to a high extent, a TMS (treasury management system) can help the treasurer. However risks in cyber fraud are increasing. Also increased regulations by banks and/or government take more time of the treasurer. In the past a treasurer only went to his own bank for financing, these days there are many other options for financing or reducing financial risks. It is the task fort the treasurer to keep up-to-date with developments, and to be the consultant for the organization on treasury related subjects.
TreasuryXL.com will help you with this by following the latest trends on all aspects of treasury.
Marco Lassche
Founder and Owner of at Bedrijfskostenexpert
Treasurer and Project Manager at Van Caem Klerks Group
treasuryXL Ambassador
Our banks are not like theirs (if they even have one)
| 08-10-2019 | by Pieter de Kiewit |
Recently Bloomberg reported about the authorities in Indonesia closing down 826 Fintech startups. My first assumption was this has to do with tax evasion and a very controlling government. Indonesia is most definitely not my field of expertise. Reading the article it struck me that my mindset concerning banking is quite limited and restricted to western standards. And over time I have noticed that I am not the only one. Reason to browse the internet, tell you about my findings and issues this concerning.
Even European banks are not all the same
In The Netherlands the retail banking standard was: banking services are for free and you get a decent percentage on your savings. Furthermore cheques were left in the previous millennium and even my grandmother uses on-line banking. Italian retail banking already came with an invoice long ago and cheques were and still are a standard in Germany. As many Europeans have no regular access to the (mobile) internet, banking on their computer or phone is not an option. One can also take this from the average number of banking offices to be seen in the streets of Amsterdam versus the ones in Bucharest.
Banking differences in the rest of the world
I did not do a comprehensive study but do know that for many of us Europeans a personal credit rating does not very sound familiar. When I lived in Canada I learned that you need a personal credit to get a cheque book. You get your credit rating by having an account where a regular income lands and improve it by leasing a car and pay your credit card bills in time. Without a credit rating no mortgage, a better credit rating results in a lower interest rate.
In some African countries telephone landlines were never installed and the first regular telephone was a cell phone. In parallel, bank accounts were skipped and cash is replaced by credit on this same cell phone. I think all these systems are doing a more or less proper job. Only if you want to cross the border you will need to help.
Problems with inadequate banking services
EY reports that over 200 million SMEs do not have access to banking services putting them in an offside position in the global economy. All this because the regular big banks want to deal with them as if they are a Western company. The Bloomberg article describes a situation where 90% of the Indonesian population has no credit card or access to banking services. Of course this is a facilitator for the black market economy. But also, there are examples where Fintech and loansharking are being combined with all related criminal behaviour and excessive interest rates. And, in a society without banks, what can you do with your savings? I think these are real issues.
Having browsed and learned I don’t think we should aim for a worldwide standard in banking. I hope we can learn from each other and that the banking landscape will be more honest, enabling a fair global economy. With this in mind I think I will have another look at cryptocurrencies introduced by Facebook and other new kids on the block. That is for another blog and by now I think I understand the Indonesian government better.
What are your thoughts and which interesting examples do you see around the world?
Pieter de Kiewit
Owner Treasurer Search
The impact of PSD2 on payment transactions
| 07-10-2019 | TIS |
This September the new EU directive PSD2 (Payment Services Directive 2) came into force. It is an extension of the Payment Services Directive, which was intended to harmonize the rules for payment products and services. Although this amendment affects every consumer who uses online payment services, and although sufficient notice has been given in advance of the amendment, few people know what the new EU Directive is all about. For this reason, it is not uncommon for bank customers to be confronted with an account blockage after the changeover, when logging into their online bank account, which causes a lot of confusion between banks and customers. As a result, several questions arise:
What is PSD2?
PSD2 is intended to regulate payment services and payment service providers in the European Economic Area (EEA) and throughout the European Union (EU). It aims to make cashless payments more secure, customer data better protected and data transmission over the Internet more reliable. In addition to the changes for customers, who are to experience more security through increased authentication, there are also significant changes for banks. From now on, banks will be obliged to provide third party service providers with access to customers’ account information via a standardised interface (PSD2 API) if the customer gives the consent. For banks, this means that they must surrender a large part of their power of disposal. For customers, this means that they can now make all their payment transactions without having to log into their online bank account. This is convincing for the customers, because specialised fintechs are ahead of banks and offer solutions that allow all your financial transactions – even within different bank accounts – to be carried out with only one application. This is nothing new in the world of B2B, where corporates use payment solutions with the exact same purpose for years now.
Is PSD2 safe?
A change in the conditions of payment transactions often raises the question of whether it can actually meet the promised security standards. Especially in this case, where customer information is passed on to a third-party service provider. If lacks in security arise, there is a higher risk to become a target for cybercrime, which automatically puts bank customers’ confidential account information at risk. The European Banking Supervision and BaFin are taking it very seriously. In order to make the customers’ choice for the right third-party service provider easier, they provide a directory of reliable, registered and licensed third-party service providers.
Find out what makes TIS particularly safe!
PSD2 for Treasury?
Consumers demand real-time, round-the-clock payment services and this demand is growing. This brings changes in payment transactions that have an impact on the businesses, especially on corporate treasury which looks after cashflow. Most up-to-date account information becomes more crucial for a treasurer. The new PSD2 API interfaces could help, since it enables more direct communication with the bank and access to real-time account information.
About TIS
TIS (Treasury Intelligence Solutions GmbH) is the leading cloud platform for managing corporate payments, liquidity and bank relationships worldwide. The company delivers SMART PAYMENTS to help customers make BETTER DECISIONS.
TIS enables companies to make more efficient, more secure and more cost-effective payment transactions. In addition, TIS enables customers to make better decisions when analysing financial and operational performance based on real-time payment flows. All mission-critical processes related to payment transactions are integrated into a multibank-capable, audit-proof cloud platform. This is a single point of contact for enterprise customers when managing and analysing their payment flows across the organisation. TIS take care of managing various payment formats, communication channels with banks, and ERP-agnostic integration. Offered as Software as a Service (SaaS), the ISO certified TIS solutions are quickly up and running without the complexity and cost of a long IT project.