navigating the landscape of treasury technology › wp-content › uploads ›...
TRANSCRIPT
![Page 1: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/1.jpg)
© 2010 Treasury Strategies, Inc. All rights reserved.
Navigating the Landscapeof Treasury Technology
PRESENTED BY:Laurie McCulley, Principal
May 13, 2010
![Page 2: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/2.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 2
Three Key Objectives
1. What is treasury technology and why does it matter?
2. Integrating treasury best practices with technology
3. How your organization will benefit
![Page 3: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/3.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 3
Agenda
1. Why Treasury Technology Matters
2. Introduction to Treasury Technology
3. Best Practices using Treasury Technology
4. Benefits of Treasury Technology
5. Next Steps
![Page 4: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/4.jpg)
Why Treasury Technology Matters
![Page 5: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/5.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 5
Recent market disruptions have increased the visibility of and demands on
corporate Treasury departments.
Key challenges include:• Changing role of Treasury
• Globalization
• Liquidity management
• Risk control
• Technology
• Industry competition
Industry Issues
![Page 6: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/6.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 6
CFO’s Mandate for Treasury
1. Optimal liquidity management
2. Risk management (operational and financial)
3. Funding & credit
4. Efficiency
5. Advisory role
![Page 7: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/7.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 7
Evolution of Treasury Management - 3.0
Treasury 1.0
Valu
e an
d Vi
sibi
lity
of T
reas
ury
Treasury Management Evolution
Operational &clerical
Management of bankaccounts and fundsmovement
Analytical andproactive
Management andprotection of liquidity in aworld of fluctuatingcurrencies and interestrates
Advisory & Strategic: NerveCenter
Insightful, integrated &comprehensive
Payment, liquidity & risk advisor
Providing business intelligence &decision-support
Treasury 2.0 Treasury 3.0
![Page 8: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/8.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 8
Evolution of Technology - 1.0FX
Bank accounttracking
Bank reporting with multiplebanks
Accounting Manual payment entriesinto several bank
platforms
Financial transactionsanalysis
Remotesubsidiaries
Financialtransactionexecution
Reconciliation
Businessunits
Bank managedFX
Reconciliation Reconciliation
Accounting
![Page 9: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/9.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 9
Bank managedIntercompany
Netting and FX
Bank accountadministration
Cash pooling
Bank reporting with multiplebanks
Accounting andreconciliation Manual payment entries
into several bankplatforms
Financial transactionsanalysis
Subsidiaries /Business Units
Financialtransactionexecution
Evolution of Technology - 2.0
![Page 10: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/10.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 10
Analysis &Pricing
Bank AccountAdministration
PaymentFactory
BankConnectivity via
SWIFT
Financial TransactionExecution
Accounting &Reconciliation
Web Access forSubsidiaries
Dashboards
In-houseBanking
Evolution of Technology - 3.0Intercompany
Loans
Netting
Rules & Automated Workflows
AccountsReceivable
CashForecasting
Links to theIPA
AccountsPayable
Market Research &Data
Scenarios &Simulations
Rating Information
![Page 11: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/11.jpg)
What is Treasury Technology?
![Page 12: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/12.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 12
Full Spectrum of Technology Solutions
Bank-offered treasurymanagement systems
Enterprise Resource Planning(ERP) treasury module
Third-party (best-of-breed)treasury management systems
Fully Integrated Treasury Management Systems
Specialized (single purpose) Treasury Systems
Bank fee analysisMultilateral nettingFX exposure management
Bank account administrationRisk analyticsBank-to-book reconciliation
Transaction matching &confirmation systems
Credit information & market rateprovidersValuation & hedge accounting
Online trading portals(FX and investments)
SWIFT Corporate ConnectivityBank online systems(reporting & payments)
Other
![Page 13: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/13.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 13
Treasury Management System
A Treasury Management System (TMS) or Treasury Workstation (TWS) is atool to:
• View bank data
• Create cash positions and forecasts
• Reconcile bank transactions with internal activity
• Execute payments
• Track financial transactions
• Calculate mark-to-market values
• Monitor and manage financial risk
• Create general ledger journal entries
• Report on all treasury activity
![Page 14: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/14.jpg)
Best Practices Using Treasury Technology
![Page 15: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/15.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 15
A more strategic and effective treasury is founded on 3 key pillars
The 3 Pillars of Treasury Best Practices
Robust riskmanagement
Global cashvisibility & optimal
liquidity
Effective treasuryoperations
![Page 16: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/16.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 16
Gain (real-time and direct) access to all balances and transactions onworldwide basis
• Optimize idle cash balances
• Control bank accounts
• Execute FX more efficiently
• Improve debt management
• Enhance day-to-day cash flow predictions
• Monitor counterparty risk
Global Visibility & Optimal Liquidity
![Page 17: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/17.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 17
Visibility & Control of Cash -Simplifying Bank Connectivity
![Page 18: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/18.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 18
SWIFT for Corporates
Leverage a single, standardized pipeline for bank communication
SWIFT
Information Reporting Payments Transaction Matching& Confirmations
Trade (LC)Processing
![Page 19: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/19.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 19
SWIFT for Corporates – Before
Corporate
e-banking Y
host to host X
e-banking Z
VAN
Internet
Leased line
Multiple Channels
1. Multiple transfer systems, platforms,interfaces, solutions and channels
2. Bank-driven solution
3. Inflexible design
4. Potentially unreliable channels
5. High internal and external cost
TMS
![Page 20: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/20.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 20
Corporate
SWIFTNet
Standardizedgateway
Corporate
e-banking Y
host to host X
e-banking Z
VAN
Internet
Leased line
Multiple Channels One Channel
1. Multiple transfer systems, platforms,interfaces, solutions and channels
2. Bank-driven solution
3. Inflexible design
4. Potentially unreliable channels
5. High internal and external cost
1. One: transfer system, platform, interface,solution and channel
2. Connectivity neutral
3. Highest level of security, reliability andresilience
4. Platform for growth
5. Cost effective
TMS
TMS
SWIFT for Corporates – After
![Page 21: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/21.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 21
1. Focus on operational risk management (fraud, errors, dependence on staff,
non-standardized activities, over-dependence on single bank, unknown
activities, etc.)
2. Identify contingency strategies (“what-if” planning for both financial and
operational risk mitigation)
3. Measure financial risk holistically and in real-time
4. Automate the exposure gathering process from the
business units - ensure a full view of all financial risks
Risk Management
![Page 22: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/22.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 22
Cash in globalbank accounts- visibility to allglobal accounts;converted tocommonreportingcurrency
Investments -time deposits,direct CP,money marketfunds
Derivatives - FX,interest rate andcommoditiescontracts -notional andmark-to-marketvalues (adjustedfor FAS 157)
Credit facilities -un-utilized
Credit facilitiesdrawn (revolvers,letters of credit,etc.)
Cash at risk Potential risk
Historical view of counterparty risk
Strategies for Effective Risk Management
![Page 23: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/23.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 23
Cash in globalbank accounts- visibility to allglobal accounts;converted tocommonreportingcurrency
Investments -time deposits,direct CP,money marketfunds
Derivatives - FX,interest rate andcommoditiescontracts -notional andmark-to-marketvalues (adjustedfor FAS 157)
Credit facilities -un-utilized
Credit facilitiesdrawn (revolvers,letters of credit,etc.)
Cash at risk Potential risk
Broader view of counterparty risk management.
Strategies for Effective Risk Management
![Page 24: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/24.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 24
Enhance all cash management functions by implementing stronger controlsand automated processes
• Reduce manual rekeying errors through automation of cash positioningprocess
• Automatically update cash position for projected cash flows related totrades and wires
• Minimize effort required to reconcile transactions on a daily basis
• Automate the booking of all journal entries within TMS
• Use TMS as repository for all static data including bank accountinformation
• Consolidate online bank platform functions and administrators within TMS
Treasury Operations Management
![Page 25: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/25.jpg)
Benefits
![Page 26: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/26.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 26
Cost Savings• Optimised liquidity• Minimized bank accounts• Early entry to markets• Accurate forecasting
Productivity Improvements• Straight-Through-Processing• Access to one central database• Real-time access to information• Reduced errors• Elimination of data re-keying
Strengthened Controls• Central visibility of all activity• Segregation of duties• Strong security measures• Assists with audit compliance
Benefits of Automation
![Page 27: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/27.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 27
Risk Mitigation• Hedge activities• Counterparty risk• Improved reporting & decision-making• Reduced reliance on people• Disaster recovery
Value Creation• Confidence in decisions• Analytic and strategic role of treasury• Cross training and new employee training• Integration with entire organisation
Benefits of Automation
![Page 28: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/28.jpg)
Next Steps
![Page 29: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/29.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 29
Consolidate
• Implement a best-in-class, robust globaltreasury managementsystem
• Fully–integrated,completely automatedstraight throughprocessing
Com
bine Existing Systems
Bank AdministrationInvestment Portal
(Money Market Funds)
Netting System E-banking Systems
ERPBloomberg or Reuters(Market data, such as
FX rates, Interest rates)
Current TMS Treasury Portal
Multi-bank FX platform Excel Spreadsheets
STAND ALONE SYSTEMS
![Page 30: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/30.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 30
The Future of Treasury
![Page 31: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/31.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 31
Laurie McCulleyPrincipalLaurie_McCulley@TreasuryStrategies.com407.644.6202
Join our LinkedIn Groups• Treasury Technology and
www.linkedin.com/e/vgh/50328
• SWIFT Connectivitywww.linkedin.com/e/vgh/50293
Questions?
![Page 32: Navigating the Landscape of Treasury Technology › wp-content › uploads › Navigating...Navigating the Landscape of Treasury Technology PRESENTED BY: Laurie McCulley, Principal](https://reader030.vdocument.in/reader030/viewer/2022013021/5f1167cac7555a2ac7791568/html5/thumbnails/32.jpg)
w w w . T r e a s u r y S t r a t e g i e s . c o m 32
About Treasury Strategies, Inc.Who We AreTreasury Strategies, Inc. is the leading treasury consulting firm working with corporations andfinancial services providers. Our experience and thought leadership in treasury management,working capital management, liquidity and payments, combined with our comprehensive view of themarket, rewards you with a unique perspective, unparalleled insights and actionable solutions.
@TreasuryStrat
http://www.linkedin.com/companies/200120
Accreditations
Connect With Us
What We DoCorporationsWe help you maximize worldwide treasury performance and navigateregulatory and payment system changes through a focus on bestpractices, technology, liquidity and controls.
Treasury TechnologyWe provide guidance through every step of the technology process.Our expert approach will uncover opportunities to optimize the valueof your treasury through fully integrated technology solutions.
Financial ServicesOur experience, analytic approach and benchmarks provide uniqueconsulting solutions to help you strengthen and grow your business.