The future is now: How ready is treasury?
Left to right: Gurjit Pannu (Uber); Jörg B Berműller (Merck); Robert Novaria (Treasury Alliance Group and session chair); John Ferguson (EIU); Michael Spiegel (Deutsche Bank)
In line with the overall theme for the conference the new annual Economist Intelligence Unit treasury survey supported by Deutsche Bank reported on how ready treasurers are for new technologies and disruptive change, and this was the panel that discussed some of the points in more detail. Delegates were encouraged to download and read the whole report on the Deutsche Bank website here. We heard confirmation that having technology was not enough – it was all about how you use it.
John Ferguson of the Economist Intelligence Unit expressed his surprise that only 55% of the 300 treasurers surveyed said that technology was disrupting the operational part of their business and therefore impacting their role “There is a growing divergence between those treasurers that have the resources to roll out this technology and advance it and those that do not, and this says something about the strategic role of the treasurer,” he added.
The findings, said Michael Spiegel, Deutsche Bank’s Global Head of Cash Management were “a fair reflection of what we see in client responses around the world”. “We look for interesting themes that provide content,” he continued, adding that “the power we will see in open banking and APIs is bigger than that survey showed”. Treasurers cannot experiment with the latest technology – it is too crucial to the business – so he thought there might be a lag in uptake.
Jörg B Műller, Head of Cash and Risk Management at Merck, Germany, said that his treasury colleagues were currently very prepared and “able to manage the future”. However, it is lack of prioritiisation up the line that was holding them back. New technology such as machine learning and AI are simply tools to improve efficiency. The team is a mix of IT specialists and former bankers – “we think in processes – if a subsidiary needs a loan it gets typed in once”. Uber’s Gurjit Pannu, (EMEA Treasury Manager) said they were in the fortunate position of not having legacy systems. “If you wait for the perfect solution and take seven months to implement it, it might be obsolete”. He sees Uber as prepared, being a young company, "but there might be new things coming up we are not prepared for".
“It’s a constant evolution and you can only create planning scenarios – as you cannot predict the future – and keep adjusting from there,” said Spiegel. Treasury silos of B2B and B2C are converging and banks need to be relevant to both. The innovation is that we collaboratively need to work in the ecosystem and find solutions that go through to the end market. “You cannot reverse globalisation” he concluded, “as an industry we are embracing the fintech challenge and a new ecosystem will emerge as a result”.
From left to right: Denis the Menace, David Guppy and Gnasher from Beano Studios Source: EuroFinance and Beano Studios
A heartwarming presentation in Stream 5 was a lovely way to end the day, with CFO David Guppy, clad in his Dennis the Menace striped shirt (see above), explaining how Beano Studios is turning an 80-year-old UK comic legend into a children’s digital multi-media entertainment success story inside just 18 months – headcount at the Beano is now a mere 50, and the finance team comprising three people. For the website Beano.com they create a mix of child-safe, appropriate shorter form digital content that reflects children’s lives to accompany the longer form TV content. Children are not watching as much terrestrial TV as they migrate more and more to content on digital devices. “You have to be aware of the changing landscape and ensure you are aware of the business and consumer needs”. The brand is well known and loved in the UK but they are looking to scale up into the US market and other International markets. Guppy updates the five year plan every six months and does rolling forecasts every month. He admits to using Excel for now, but is looking for better tools. “Finance are at the heart of strategic thinking at Beano Studios and part of the international growth story.” He said it is difficult to work out if a piece of content drives value. They look at the audience and how long they stay. Data and insights is at the heart of everything we do at Beano Studios. The parent company is DC Thompson in Dundee (supporting the refresh and reboot and growth of the brand financially) “We are on a journey with them [the parent] to be more responsive to our needs,” said Guppy. When he asks for new forms of financing and bank accounts for a new production the treasury team are now having to turn it around faster than they are used to. This is a culture change we are working on together, concluded Guppy.
In Open Banking Discovery Lab (Stream 9), there was standing room only – proving that it was the buzzword of this year’s conference – from Deutsche Bank’s Head of Digital Cash, David Watson’s opening conversation with Chris Van Woert, Head of Treasury at Stripe, the internet commerce platform to the end of day panel discussion between Deutsche Bank’s Head of Cross Product Solutions, Benjamin Madjar and IATA’s Javier Orejas – with the animated demo of the Deutsche Bank/IATA push payment solution proving the point that the talk of innovation from last year is now becoming real.
