What’s on International Treasurer’s radar screen this week.
In this week’s editorial meeting we discussed a number of issues, including competing digital identity approaches for bank account management, topics that will be discussed at the upcoming NeuGroup FX Managers’ Peer Groups (FXMPG1 and 2) summit as well as further rethinking treasury centralization.
Identity security approaches
Related to our look into digital identity management, we will take a look at the differing approaches to this issue. We’ll be writing about an IdenTrust offering soon, but will also explore what SWIFT has to offer. Last October, SWIFT launched an identity security product called 3SKey. According to SWIFT, 3SKey secures and consolidates information flows and helps corporate treasurers manage their banking relationships via a single, multi-network personal digital identity framwork.
For its part, IdenTrust, which has been at this far longer, offers a similar service in Trust Prime, which gives treasurers a single “universal identity authentication standard” to manage multiple bank accounts. In practice, though, the SWIFT and IdenTrust approaches differ greatly. We’ll investigate how and weigh the pros and cons of each.
Since digital identity lies at the heart of it, we’ll also take a look at the approaches and costs associated with electronic bank account management, also known as eBAM.
FX Summit topics and questions
The FX Managers’ Peer Groups will be meeting in a few weeks for their biennial summit, where both FXMPG1 and FXMPG2 get together for a day of their two-day meetings. In one of their more comprehensive pre-meeting surveys, the members are seeking results on practices related to option hedging, focused on getting budget to pay higher premiums, and how to more effectively manage commodity risk in a combined view that includes FX exposure.
Treasury centralization
Centralization is a theme that comes and goes but is certainly always a debate. It seems that the pendulum is biased toward swinging in the direction of centralization. Nonetheless, the wisdom of doing everything at HQs continues to be rethought. Advances in technology increasingly enable standardized policies and procedures to be executed with central control by quality professionals closer to the emerging growth markets, where more cash flows are being generated and where such cash flows are at greater risk.
One outcome is that technology is enabling new hybrid models of treasury organizational management. These new structures, eventually utilizing the “cloud,” will take advantage of remote access to information and applications to process and act on that information from virtually anywhere.