The big themes at EuroFinance’s 17th annual conference on International Cash, Treasury and Risk Management were the state of the global and US economy, how treasury can participate in and contribute to their companies’ business growth and the principal risks facing business today and in the near future. The conference “streams” were dedicated to familiar topics like risk management, cash and liquidity, technology, and Latin America.
Official lead sponsor RBS kicked off the conference with its chief US economist Omair Sharif telling the crowd that the underlying US fundamentals were growing stronger each quarter, citing growth in household formation as one of the positives, while noting that “the odds of an upside breakout in growth are limited, in the face of fiscal consolidation, higher taxes, and increased regulation,” which, not coincidentally, mirrored the conference agenda closely.
Armed with that positive outlook, albeit with caveats, it was not surprising that in EuroFinance’s Treasury Verdict polls, in response to questions about audience sentiment this year compared to last year, more than two thirds of respondents said they felt similarly or more confident about the global economic prospects in the next year, and more than four out of five felt similarly or more confident in their own companies’ business prospects.
Speaking of the Treasury Verdict, another non-shocker in the poll was that 59 percent were unsatisfied with their level of cash visibility. On the bank relationship side, only 17 percent said they were planning to increase their number of bank relationships, while 39 percent said they planned to decrease it. Another 28 percent said the number would remain the same but the composition would change. Consider yourselves on alert, bankers.
Dealing with economic growth…
Growth and treasury’s role in it was the theme of the plenary sessions on the second day, but in a first-day taster, Dutch paint giant Akzo Nobel’s Peter van Rood, Corporate Director of Treasury, previewed the growth agenda with a presentation on “building a culture of growth.” Akzo Nobel’s far flung markets demand a presence globally, as well as increasingly in emerging markets, which is always a challenge both from a treasury and management perspective. The key takeaway from Mr. van Rood’s remarks was that, in those remote places, treasury needs to have motivated individuals who have regular and significant engagement with a strong center at headquarters. Standardization and automation enables processes like STP which in turn frees up human resources to do higher-value tasks. As a result of such improvements, the company has been able to upgrade, diversify and empower its treasury staff over the last few years and build a culture of growth. This is a trend many treasuries in the NeuGroup network of member companies have been pursuing for some time.
In a first-day stream seemingly dedicated to treasury transformation and success stories, Omnicom Capital’s assistant treasurer Peter Tan and director of treasury ops John Voorhis picked up on the Akzo Nobel thread about empowerment in their presentation about organizing for constant change. In a “center of expertise” approach (similar to the Center of Excellence path taken by Dell, among other NeuGroup member companies), Omnicom’s treasury centers are at equal standing with one another and specialist functions are not replicated in other centers. Technology plays a big part both in information sharing and communications (cloud, teleconferencing) as well as automation of standardized processes. Other factors that aid in creating a collaborative team that can deal with the constant stream of changes affecting treasury are a no-hierarchy organization with an open floor plan, a diverse staff that move around between locations, an emphasis on communications, cross-training, empowerment and recognition of effort, ideas and success.
…And growing risks.
Highlighting the changing nature of risks facing companies today, the plenary sessions on the last day took on hacking, sovereign risk and regulatory overload. Infamous hacker turned risk consultant Kevin Mitnick showed off his hacking prowess to illustrate some very real threats to businesses and noted that the human element (yes, we are picking on operators and receptionists) is a weak link in allowing access to restricted areas and data, and which requires oversight and education. Following Mr. Mitnick, returning presenter Alyson Warhurst of Maplecroft, a consultancy, updated the audience on the risks associated with the most exciting growth markets in Asia and Africa, for example: civil war, poor governance, social unrest, climate related challenges, and more.
The Miami event this year covered a lot of ground in the growth and risk areas, and elevated the discussion to go beyond just treasury challenges to a more comprehensive view of the environment in which companies must continue to operate to be successful. As we look forward to the next event, we expect that the NeuGroups will continue to tackle these issues on a more granular level and share their approaches with their peers.