A range of market factors have forced corporates to cut costs and look at alternative sources of funding – and income. As their wider business agenda evolves, treasurers need to adopt appropriate measures to ensure they have consistent timely access to crucial information. Mobile technology may be one such approach.
Government authorities play a large role in regulating the domestic web environment in China, meaning that incorporating mobile technologies in the treasury space can be challenging. Nevertheless, global companies and banks are attempting to bring mobile web services to the emerging Asian market and corporates should take advantage where possible.
Good communication, as well as accurate and secure information, are essential parts of any treasury process. As more and more corporate treasuries look for opportunities to wring cash out of the business and improve visibility, convenient access to the right information at the right time is imperative, according to Ron van Wetzel, Head of Emerging Payments Schemes at Deutsche Bank.
“Advances in mobile technology are beneficial not just in the operational space; there is also a direct impact for the corporate’s profits,” he says.
Being part of a regional treasury centre or multinational company (MNC) means the treasurer may have to travel during working hours. If he/she does not have access to fixed infrastructure in order to authorise critical payments, for example, at any point when in transit, mobile devices can be used to bridge this gap. The web browser on such an instrument is as effective as a PC – anything that is available on the web can, in theory, also be executed on a mobile platform.
Typical treasury services which can be brought to mobile devices are the approval of payments, investment approvals (eg for fund investments) or rebalancing of accounts. Other (non-transactional) activities which profit from this technology are the review and the amendment of cash forecast information, the handling of netting cycles or, simply but crucially, the garnering of up-to-date information on bank relationships before meeting with banking partners.
There may be functions that are not available either on the banking service or on the software web platform. In this scenario, special apps are available designed specifically for mobile devices offered by banks or treasury management software vendors. The way in which the appropriate information is communicated and networked for the user can be very important to create optimum synergies. It is not only important to provide information but also to use the latest communication tools within the relevant system, according to Daniel Andres, Business Development at Entarena.
“By linking directly to the underlying transactional data, communication is elevated to a higher level and tasks such as resolving unsettled transactions, discrepancies in forecasting information, and dispute management can be carried out more quickly and more efficiently. We call this Treasury 2.0.”
Limitations solved by the tablet?
Not only is it beneficial to provide time critical functionality to the mobile devices but it is also essential that the work for the user is convenient to perform. Instruments such as iPhones and Android phones have limited screen size (form factor) and are not designed for entering or viewing large quantities of data. For instance, if the management of a company’s liquidity position was required remotely, the user would need insight into all the accounts globally for consolidation and have access to them and their applicable FX rate at the same time – just one small screen is not likely to be sufficient for this purpose.
However, as mobile hardware has developed and the tablet has been introduced, banks and their vendor partners have produced richer ‘on-the-move’ solutions that have evolved with the development of the nascent device. The rise of the tablet allows a more efficient interface through which to interact with the appropriate systems and networks. Presentation is crucial as user-friendly solutions on both mobile phones and tablets are important to encourage high user acceptance, says Andres.
“Treasury application providers should not only port the application to mobile devices but think carefully about the process, the handling of transactions and the user interface. It is a different thing to develop a treasury application on a PC than to provide a smart interface on mobile devices.”
While the smartphone could offer a lot of virtual control, the scope of the device was hampered by the ‘real estate’ that it was designed with. With the evolution of tablets, suddenly more practical hardware has become available to the treasury expert. The service received from a tablet is much richer in information when operating working capital analytics or cash flow positions, for example.
With touch screen gestures and a larger yet portable frame, the tablet is almost like a mobile dashboard, says Gautam Jain, Global Head of Client Access at Standard Chartered. “Would I expect a treasurer to do working capital analytics on a smartphone? Probably not. But would I expect him to be doing it on a tablet? Absolutely.”
For the business that never sleeps
Mobile treasury is another way of having immediate access to treasury information and enabling the speedy execution of processes. Due to the changing cultural habits of today’s global corporate business environment, users are demanding access to treasury information via their mobile devices – ‘teleworking’. Even if treasurers and CFOs have had to cut back on their global travel, they may have arranged flexible work schedules with home offices. IT departments are therefore expected to make all applications available at anytime and anywhere, with the business smartphone now a standard item in any employment package.
Having the appropriate internet banking and web access to your TMS or ERP can enable continuity by permitting approvals and validations to be made by executives who may not be in the office or allowing employees to operate from home in situations when the office is out of action. There are other convenient functions of mobile solutions that are beneficial to ‘round the clock’ functionality, one of which van Wetzel highlights: “The beauty of the mobile alert function is the ability to reach the treasury manager wherever he is and let him know that something essential is required to be processed/approved/executed immediately.”
In addition, with improved service levels and guarantees outlined in the service level agreement (SLA), users are becoming more comfortable uploading and accessing their business data from the cloud. Not due solely to the increasing availability of smartphones and tablets but services such as remote data access, storage and apps has helped to recognise the mobile cloud in the corporate setting. Executives can expect more control and visibility as relevant data is available at any time and important decisions are not dependent on the availability of this information or access to the relevant systems, says Andres.
“An example of this is where a treasurer, upon hearing breaking news concerning a stock, is able to instantaneously make a course correction rather than waiting until they get back to the office or phoning in the instructions to others.”
However, there are those that are wary of possible exploitation when it comes to using mobile devices, with the danger of longer working hours and concerns of determining appropriate remuneration for such toil. Could the arrival of fully functional mobile treasury sound the death knell for the already precarious concept of work-life balance? We have seen some companies (such as Volkswagen in Germany) which has set its BlackBerry servers not to send emails to employees when they are off-shift, with the exception of those in management functions.
Drawing the line between business and private life is a topic which has to be addressed by all companies and by each individual. Jain believes that the benefits and convenience of a mobile treasury far outweigh the efforts required to turn the phone or tablet off – again, a decision that needs to be made by the end-user.
“If there is a critical thing that needs to be done, you can switch the phone on and do it rather than having to drive all the way to the office. That brings with it added convenience and is probably better for work-life balance as you don’t have to drive miles to get to the office to authorise an urgent payment,” he explains.
Would you like that data to go?
Naturally, as mobile technology expands, the avenues for security breaches are multiplied and data can be so much more difficult to track as it is located in the virtual environment. An Ernst & Young report released in November 2011 analysing the security threats of new technologies noted that users accessing sensitive data on mobile devices at Wi-Fi hotspots are more likely to be hacked.
Fear of data loss and security breaches is one reason why the mobile trend remains unattractive to some treasury executives. They are therefore reluctant to embrace the mobile device as an extension of their work function. David Blair, an independent consultant, believes that this anxiety may be somewhat unreasonable given the standard security measures involved.
“Typically, you will have some kind of PIN code to unlock the phone. The e-banking or treasury web will then, in addition, require a user id and password – this level of security is called the 3FA (three factor authentication). The 3FA is specific to each specific e-banking or e-treasury platform.”
What vendors ask of users is to make the mobile device itself as secure as possible: keeping a passcode lock, updating the operating system, and having the ability to remotely wipe your mobile device should it be lost are important guidelines. Jain agrees that the reticence in adopting mobile treasury due to security concerns is unfounded.
“As far as fraud risk is concerned, users simply need to ensure a robust process management as would ordinarily be employed in an office environment.”
But what about ‘insider’ fraud opportunities? Can blurring the lines between personal and business use can be detrimental to the company? Some treasurers are worried about giving staff the ability to make payments while undertaking activities which may have nothing to do with work. Do employees work to a higher standard of security when in an office environment?
For certain functions, especially with phone dealing (as the lines are recorded within the office), it is an agreed good practice that you don’t execute a transaction outside the dealing room. Some companies are perhaps not as comfortable with having transactions processed that are not going through their virtual private network (VPN). However, Blair argues that the likelihood of losses in treasury is actually less probable with the use of mobile technology.
“With mobile devices, people actually have more bandwidth to think about what they are doing rather than just deal with the vagaries of the system. As technology improves, interfaces will allow you to focus more on the underlying business issues – thus actually reducing operational risk.”
One area that Blair does believe might be hindered through advances in mobile technology is teamwork – the soft factor. If everyone is working from home, there may be a risk of losing cohesiveness.
“Things may fall between the gaps. The handling of these situations if people are not in the same place is difficult. Treasurers may not have explored this avenue and are perhaps not that comfortable in doing so (sharing information/issues of confidentiality) but this applies to more than just approving payments. We are talking about deals that require initiation, for example.”
Further issues which an organisation might face with a mobile treasury are availability of networks and high roaming charges which may hinder performance and increase costs on these devices. But examples of this kind are now few and far between as all tablets are mostly wireless enabled and Wi-Fi is virtually ubiquitous, at least in the developed world.
The drive towards Treasury 3.0
Apart from the positive financial impact gained when processing in a timely manner, Andres outlines other, more indirect monetary incentives for the implementation of mobile devices. “First of all, the technology applied is cheaper than traditional infrastructure. Secondly, it can be deployed quickly and efficiently. Thirdly, new developments can be rolled-out immediately on a global basis.”
It is difficult to forecast what the mobile technology space will look like down the line as the pace of expansion has been extraordinary in recent years – particularly in emerging markets. But one thing is certain: the move to mobile shows no sign of stopping.