Treasury Today Country Profiles in association with Citi

Outside the comfort zone

Goldfish jumping out of one fish bowl to the other

Once a treasurer, always a treasurer? Not necessarily – for some treasury professionals, a strategic move into a bank or consultancy firm can bring exciting challenges and development opportunities. But any career move involves an element of risk and treasurers contemplating such a move should be aware of the obstacles they are likely to encounter.

The assumption that a job is for life is long gone. Rather than an orderly progression up the ranks, a treasurer’s career path may well include stints in different departments within a corporation, strategic moves to different companies – and in today’s globalised world treasurers may well spend periods of time in different countries and regions. For some treasury professionals, a career move may take them outside treasury altogether – in some cases to return a few years later, armed with skills and experiences that they may not have been able to acquire in a more linear treasury career path.

There are a number of options open to treasurers looking to dip their toes outside the world of treasury – whether permanently or as a strategic interlude. For treasury professionals, accustomed to managing bank relationships, one of the most interesting possibilities is to try sitting at the other side of the table – in other words, making the move from corporation to bank.

Why move?

In many cases, treasurers looking to move into a banking role are motivated by the prospect of higher salaries. “You always get people who want to move into the banking industry and that’s partly driven by the fact that it’s generally more lucrative,” says Andrew Ryan, a recruitment consultant for Hays Treasury. “Comparable jobs tend to pay a bit more than in the corporate sector.”

Financial incentives are not the only drivers, however. “You might find that someone just wants a change of direction,” says Mike Tucker, Director, MR Recruitment.

“Corporate environments have been seen as very structured with a clear career path, whereas historically, banking has perhaps offered greater complexity, more roles to go into and more departments to choose from.”

For Bart Ras, whose CV includes a number of years working for Philips Corporate Treasury and who was until recently CFO of Philips Supply, the opportunity to embrace new challenges was a significant motivation for moving into the role of MD, EMEA Head of Supply Chain Finance at Citi in September 2011. “One of the most important reasons for this move was personal,” says Ras. “I like to be challenged. I like to be in a new environment. Using the knowledge I’ve built up over the last few years keeps me sharp – and puts me under stress as well. After a few years in the same role, there is a chance that you can get sloppy and go onto autopilot.”

Ras also has strong professional motives for his recent move. “I believe that trade is becoming more and more important for both banks and corporations,” he says. “As global trade develops, innovative financial solutions to facilitate trade will absolutely be required in the coming decade. As trade is currently not that high on the agenda of treasuries – it’s there but it’s just one of a number of elements – I wanted to move into a role where trade is central. The trade department of a bank was an excellent fit.”

“The trend at many corporate treasuries is that their knowledge of finance, interest rates and FX rates has increased a lot over the past few years.”

Ras believes that having a treasury background can be quite an asset for treasurers looking to move into a banking role. “One of the big advantages is actually understanding what a corporate requires,” says Ras. “When I was at Philips, banks often brought us brilliant solutions – for problems we didn’t have. They weren’t always able to speak the language of treasurers. Many solutions can actually help treasurers a lot, but if you can’t communicate them properly, if you’re using the wrong language or describing things in the wrong sequence, then you won’t come across as understanding how a treasurer thinks and what sort of KPIs he has for the coming year.”

From banker to treasurer

The route from treasurer to banker is not a one-way street and in fact Ras had been on the banking side before. After spending nine years at ING Bank, his final job title being Derivatives and Convertible Bond Trader, Ras was recruited to Philips Corporate Treasury in 2005 to head up the dealing room. Far from being an obstacle, it was Ras’s banking knowledge that helped secure the job: “One of the reasons why Philips was looking to recruit former bankers was that they wanted to avoid being reliant on the knowledge they got via banks,” he explains. “I was able to share some insights they hadn’t been aware of.”

According to Ras, treasurers are far more knowledgeable on these topics today. “The trend at many corporate treasuries is that their knowledge of finance, interest rates and FX rates has increased a lot over the past few years. The days of treasurers relying on their banks for this information are over – they know what they are talking about and they are finance experts as well.”

Jörg Wiemer, CEO of Treasury Intelligence Solutions, agrees that banking experience can be an asset for the corporate treasurer. Wiemer began his career at Deutsche Bank where he worked as an account manager for four years before deciding to move into a corporate role as Head of Finance and Investor Relations at Douglas Holdings. “I was looking for a new learning curve and I just wanted to see the other side of the table,” says Wiemer. “It’s good to sell banking products – but it’s also a lot of fun to be in a position where you can purchase those banking products.” After four years at Douglas, Wiemer joined SAP as Head of Treasury Finance and after two years was appointed to the role of Head of Global Treasury – a role which he held for six years.

Making the move from bank to corporation may not be straightforward – as Wiemer points out, there is a huge difference between selling banking products and overseeing a corporate treasury. Nevertheless, Wiemer believes that his banking background was a positive advantage in his subsequent corporate role. “It’s very good to know the products and margins well and have insights from the banking world,” he explains. “I received a lot of very positive feedback in my years at Douglas because I was able to leverage this knowledge for the corporation.”

Banking vs treasury

Moving to a different company can be daunting at the best of times. Even if the new role is broadly similar to the old one, different companies can vary considerably in terms of their culture, size, values, objectives, business model and geographical footprint. Any job move is a leap of faith – and when that leap is into a different discipline, the risks are that much greater.

So how much of a gulf can treasurers expect to encounter if they are planning to make a move into banking? Even if they are moving into a treasury role within a bank, the differences may be significant. “I often hear the term ‘treasury is treasury’ – but I don’t believe that; it glosses over a whole raft of intricacies,” says Ryan. “While it is possible to make the move into the banking sector, people need to be aware that treasury is two different animals in the banking and the private sector and the demands on individuals are quite different. I see it as my duty to tell candidates what those differences are.”

Ras points out that one key difference between banks and corporations is that a bank is generally P&L driven, whereas treasury is a cost centre focusing on key performance indicators (KPIs). “Another difference is that if you are the treasurer of a corporation you are a unique animal – you have banking knowledge which the rest of the corporation doesn’t necessarily have,” says Ras. “In a bank this is not the case. So you are going from an environment where you are quite unique in your knowledge to an environment where a lot of people are on the same page.”

Nevertheless, the breadth of knowledge required in the two roles can be quite different. “Other than the largest corporations, the size of a treasury function tends to be between four and eight people,” observes Tucker. “Because of that, people’s roles are fairly broad. In contrast, bank treasury functions tend to be a lot more siloed and more specialist. They are also much bigger and because of that, people’s roles become more specific. It can be difficult for a bank treasurer to make the move to a corporation because there often isn’t a need for such a specific skillset. It is more common to see a corporate treasurer moving into a bank, but taking on the more specialist focus required in a bank may be quite a challenge.”

In order to make a career move from a corporate treasury to a bank, Ras argues, you need to be a risk taker – which may go against the grain for some treasury professionals. “Without wishing to put everyone in the same box, generally the treasurer’s disposition is to eliminate risks, reduce volatility and smooth things out,” he observes. “If you move out of your current role into a new one – particularly a very different one – you add a lot of uncertainty and risk to your own life.”

Other options

A move into banking is not the only option for treasurers looking for a challenge outside corporate treasury. In August 2011, Wiemer left SAP to take on the role of CEO of technology company Treasury Intelligence Solutions (TIS). A company founded in collaboration with SAP, TIS is a provider of cloud-based payment solutions.

Wiemer’s most recent career move was again motivated by the desire for a new learning curve, as well as a belief in TIS and its business model. Wiemer says that both his treasury and banking experience are assets in his current role: “This is a good opportunity to leverage skills from treasury and banking. TIS connects corporate ERP systems to banks using a multi-bank solution so we are effectively an intermediary between the two. With my knowledge of both the treasury world and the banking world I understand the customers’ needs and their pain points.”

“A stint in a consultancy firm can boost a treasurer’s knowledge and skillset by bringing exposure to a range of different companies and practices while developing sales and consulting skills.”

Another career move which is arguably less dramatic for treasurers than moving to a bank is joining a consultancy firm. “In the last ten years, more treasury professionals have moved into the advisory space,” says Tucker. With their hands-on experience of the issues affecting corporations, treasurers can be a valuable asset in the consultancy world – although Tucker points out that with some exceptions, they are less likely to be appointed to the most senior positions and in many cases they will choose to move back into a corporate treasury role further down the line.

“People often make the move for three to five years,” says Tucker. “They might work their way through a number of functions and the knowledge they gather becomes a very valuable asset. This makes them more attractive to future employers and it enables them to make better informed decisions regarding the suitability of roles and functions.”

Indeed, it is not uncommon for treasury professionals who have moved into a consultancy role to be headhunted by one of the firm’s corporate clients at some point during their career – and vice versa. While in theory such moves may be guarded against by the consultancy firm’s terms and conditions, in practice the consultancy firm and the corporate client will often come to a mutually acceptable arrangement in order to preserve their working relationship.

“It is nowadays easier to move between a corporation and a consultancy firm than from a bank to a corporation,” comments Bas Rebel, Executive Consultant at Zanders Treasury & Finance solutions. “Crossovers from consultancy to corporate treasury tend to be done earlier rather than later in a professional’s career; the other way around typically later in one’s career.”

A stint in a consultancy firm can boost a treasurer’s knowledge and skillset by bringing exposure to a range of different companies and practices while developing sales and consulting skills. However, treasury professionals may also have opportunities to broaden their horizons without changing company at all – particularly if the corporate culture actively supports this. Aside from straightforward internal promotions, some companies have formal programmes in place allowing staff to rotate through different roles within the business. In other cases, the onus is on individuals to drive their own career development forward by mapping out their goals and developing the skills, knowledge and experience necessary to achieve these.

“Treasury is very exciting – if you don’t just stay in the corner,” says Wiemer. “A lot of treasurers stay in their comfort zone, but on the other hand I see a lot moving on to become CFO or into a different role – such as a risk management, financial reporting or controlling role. Treasury is certainly not a one-way street. You can use your position as head of treasury to expand your network, get exposure with your CFO and CEO – this is a great platform to leverage.”

Even without a change in job title, it may be possible to push the boundaries of what a particular role involves. “The role of the treasurer changes over time,” adds Wiemer. “My ambition at SAP was to position treasury not just as a transaction partner but as a business partner. If you are prepared to grow in your role as treasurer and expand your reach you can become someone who drives the strategy of the company.”

Recruitment trends are something of a moving target and the prospects for professionals looking to move between banks and corporations in either direction change over time. In the 1990s, for example, a number of corporations hired bankers when the concept of the profit centre treasury was in vogue. Other dynamics can lead to an increase in the number of bankers moving into a corporate role, and vice versa.

“I think that in the future, corporate treasurers will have smaller teams,” says Ras. “I believe that increasingly most basic cash management operations will be outsourced to service centres. Treasurers will manage smaller teams but will do more sophisticated work, focusing increasingly on external finance, corporate finance and internal finance. Companies will increasingly need people with trade experience to boost the procurement and sales teams. This could lead to a new hiring round with companies looking to recruit former bankers with a good understanding of the trade finance business.”

For the time being, the number of treasury professionals moving over to the banking side remains low – but for those willing to step outside of their comfort zone, the benefits can be considerable.