Treasury Today Country Profiles in association with Citi

Translating treasury overseas

Different languages signpost

Enhanced international communication skills can boost revenue, profits and market share for ambitious firms, as accessing and capitalising on overseas markets is recognised as playing a large part in the corporate growth agenda.

The world is changing. The ‘old’ industrial countries, especially those in Europe, are losing ground to the increasingly stronger competitors – and potential collaborators – from Asia and other emerging markets (EMs). Understanding regulatory requirements and standard operating procedures (SOPs) in international locations is essential for corporates expanding into overseas markets. But equally as important is the understanding of the critical role language and culture play in doing business with these new regions.

According to a 2012 survey by the Economist Intelligence Unit, 64% of businesses believe that language differences constrain their international expansion plans. Does this recognition mean that corporates are giving their time and resources to up-skilling their workforce in this respect? And, are the remaining third of those surveyed under the impression that language poses any sort of issue at all?

Speak no evil

Whether in the business or personal field, language is everything, according to Juan Pablo Cuevas, Head of Global Transaction Services (GTS) for Latin America and the Caribbean at Bank of America Merrill Lynch (BofA Merrill). In Latin America, Portuguese is the predominant language, while Spanish is spoken in more countries (but with less people). A third language, French, is spoken in certain Caribbean countries. But even in the Spanish speaking countries, the meaning of certain words can be completely different in different countries, says Cuevas. “The word ‘giro’ (‘withdraw’ in English) means something completely different in Chile, versus Peru, Colombia or Mexico.” Effective communication is not just about learning the language – it’s about understanding the wider cultural context and being aware of possible misunderstandings.

Jacqueline Martin, Treasury and Credit Manager at Johnson Electric, agrees that – aside from the obvious linguistic differences – cultural variances can act as huge obstacles in communication, creating barriers that inhibit efficient workload management. “In my role, I deal with Asian, European and North American employees and business partners. As a Canadian, I tend to become informal very quickly, even upon meeting someone for the first time, but not everyone thinks that is appropriate behaviour.”

Martin observes a much more rigid structure when consulting with the company’s subsidiary in Hong Kong, for example, and even reports a certain amount of formality in European hubs, particularly in certain industries. “In France, for example, there is a sort of hierarchy as regards in-house working relationships – it would be inappropriate to be overly familiar or informal with someone on a different ‘level’. Many in the automotive sector prefer business dealings to be conducted in a specific, formal way.”

But the communication stumbling blocks concerned with establishing a treasury hub overseas or relocating an employee to another part of the world to share expertise or skill up may not only stem from within the office. In fact, more issues can arise when the working day ends.

Brazilian native João Paulo Faria, CFO at Microsoft, Chile, jumped at the opportunity to live in the US for a couple of years working for the company. As an American company, English is the standard language within Microsoft and Faria envisioned no issues as he felt comfortable conversing with native English-speaking colleagues on any business topic. “We all follow the same processes and regulations that are unique to Microsoft so the rituals, expressions, phrases and analyses are familiar with everyone, regardless of their mother tongue.

“However, when I was living in the US, even with the same colleagues I easily interacted with in-house, I faced problems when it came to communicating outside the office. There was no more familiar business lingo and it was the cultural aspects that caused the most problems. I spoke the same language but outside the office the cultural themes varied wildly – even when taking a trip to the shopping mall.”

Problem solved?

One of the key themes highlighted – and lingered upon – at World Trade Day, held in Denver in May this year, is the concept that being social in business operations is best practice rather than a passing fad. In that vein, the issue of conquering communication barriers was also discussed.

However, interestingly Cuevas doesn’t necessarily consider language a barrier in the corporate treasury world. “A derivative is a derivative no matter where you are in the world,” he says. “If you are trying to raise money in the capital markets, it is essentially the same thing in every country – the difference resides in effectively explaining in a local language what your objectives are so that you can achieve the desired results.”

Mikko Sopanen, Director, Global Finance and Treasury at LiteOnmobile, too, maintains that it is not entirely necessary for corporate treasury professionals to be exceptional English speakers. “Many successful international companies understand, recognise and fully accept that their official corporate language is ‘bad English’. The most professional person in finance and treasury might not be the best English speaker, but that shouldn’t be a big issue.”

Nonetheless, Cuevas does recognise the limitations of some companies which may not have a multilingual person at the HQ corporate treasury centre to speak to each relevant local bank to discern and make sense of the financial anomalies. BofA Merrill, for example, provides a shared service centre (SSC) in Miami that acts as a one-stop shop for the entire region. Cuevas explains: “If I have a client headquartered in Paris without a Portuguese-speaking person that can take care of operations in Brazil, the treasurer can call our SSC in Miami. The client can speak directly to our multilingual staff who will take care of all the required communications on behalf of the client.”

Another method of bypassing varying linguistic blocks globally is to embrace a certain company language as Microsoft has done, with its own phraseology and passion for acronyms, according to Faria. But even this method of communication can take some getting used to and it still does not address the cultural, more informal aspects that can help build solid business relationships. In this vein, Faria reports that it is now mandatory that new recruits for Microsoft subsidiaries have fluent written and spoken English. “Even if you don’t have to travel and are just reporting to someone in the same country, you still have to plan for the day that this information may be shared. Many years ago, some people in Microsoft were not fluent in English and they faced issues when they travelled to a worldwide meeting, for example, as they found it difficult to communicate with their industry peers.”

Martin agrees that, issue or not, this is an area that international companies are currently very aware of and which is being addressed. “In our company, we have SOPs on emails and communication in general. This covers how to construct an easy to decipher mail, what is the best way of getting a point across, etc. For smaller queries, rather than send an email, it is advised to just pick up the phone and clarify that the request or memo is received and understood.”

Combating these communication challenges can be very simple once an understanding of other cultures and a certain amount of patience is involved, believes Martin. Some people can get very agitated with certain communications – they might read too much into a certain phrase or the way in which a request is put across, she explains. “It can be quite helpful to know what the quirks and standards are of the countries and regions you will mainly be in contact with. In Hungary, for example, people use exclamation marks and capital letters as a matter of course, as a way of being friendly.”

Sopanen agrees, as he liaises with Chinese people, speaking Mandarin, Cantonese, Hokkien or other Chinese dialects as a mother tongue. “In the beginning I found their emails in English very commanding and written in a superior manner. But when I started studying Mandarin myself, I could understand the structure and the way Chinese is translated into English emails.”

Building bridges, not barriers

Global firms seem to be proactively looking for ways to strengthen their communications with their industry and business partners. Thomas Dippold, CFO at Semikron, is acutely aware of existing cultural and sociological factors in these relationships. “It is very important not to always write emails or forward policies electronically, but to visit the foreign companies and plants and develop personal contact. For example, we try to organise our annual finance meeting so that it doesn’t always take place at the HQ, ensuring each subsidiary feels valued and appreciated.”

On the other hand, an employee that speaks multiple languages will always be a plus, says Cuevas, and this skill is currently promoted in-house with corporate training programmes and externally with government schemes worldwide. “All of corporate America is encouraging not only the ‘cross-sell’, but also the ‘cross-cultural sell’. This means that if I have someone sitting in Iowa who wants to take on a new role in France, why not send them? In the long run, it’s going to greatly improve diversity from a business and managerial point of view.”

“If you are trying to raise money in the capital markets, it is essentially the same thing in every country – the difference resides in effectively explaining in a local language what your objectives are so that you can achieve the desired results.”

Juan Pablo Cuevas, Head of Global Transaction Services (GTS) for Latin America and the Caribbean at Bank of America Merrill Lynch

Fluently speaking two or three different languages can also be the differentiator for a finance or treasury professional in comparison to their peers when it comes to career growth, according to Faria. But there are, of course, exceptions when technical knowledge will trump the depth of the linguistic skill. Yet, Faria echoes the possibility for in-house training in this scenario. “If you need to hire someone with a very specific ability and you need that person regardless, you will consider investing some money on a rotational programme in order to bring this exceptional, ‘top’ talent up to a certain standard of English.”

Regardless of what rung the individual employee falls on this talent ladder, the importance of global exchanges and assignments even on a short-term basis is a practice that is seen as wholly positive by many forward-looking firms. The importance of understanding the culture in addition to learning the language is widely acknowledged across the board – as the end benefits for the company itself are also recognised, especially across such a rapidly changing landscape. Says Faria: “We have seen our customers and partners moving their people around, so this is a natural movement adding to diversity in the company to be better prepared, more flexible and react in a faster way to the changes we have seen in the world.

“We are moving very quickly in technology today – to the cloud, for example – so we need to constantly undergo business transformation and we need people from different cultures and a range of diversity to accelerate this transformation.”

Universal language of technology

Certain language solutions, and advances in language solutions (such as the new machine translation (MT) capabilities released by SDL earlier this year) can empower organisations to drive global revenue streams on the back of informed business strategy rather than assumptions or, even worse, inaccuracies. With these developments, the world has become a smaller place; social business and its related communications have allowed corporates to operate in a much more scalable and cost-effective manner. For example, electronic trading (e-trading) has decreased the need for very critical phone calls, which could be challenging due to the accent and dialect differences.

Faria reports that Microsoft has wholeheartedly followed this communication technology trend – and that they are not the only ones. “The CIOs of the majority of our global customers are confident that all of this technology, this unified communication including social networking, the cloud and big data, will soon be pervasive in all companies. Not only can embracing these advances save money, eg Skype and video conferences in lieu of travelling, but I can connect immediately with someone in Ireland or France, or even further afield. I can see these people, share information, and interact during conversations and presentations.”

European treasury is expected to be dominated by the Single Euro Payments Area (SEPA) for much of the remainder of 2013, but positive growth opportunities in EMs – especially with the latest liberalisation of the renminbi (RMB) – have meant that expanding corporates are leaning on other forms of standardisations to allow for a seamless transition overseas. Corporate adoption of SWIFT and an increase in host-to-host communication using standardised connection within enterprise resource planning (ERP) systems may help with this migration, effectively removing the barriers language can create. Yet, there are still more helpful tools coming to market.

From a financial support perspective, BofA Merrill – for one – has recognised the importance of working in multiple languages, and Cuevas reports that the bank made significant investments in order to weave languages into its technology, systems and front desk, in order to make life easy for both corporates and itself. “Our proprietary system, CashPro Online, is a global application available in 11 languages – including Chinese characters and Japanese characters,” he explains.

“We try to make the life of the user easier – just like the globally accepted iPhone has done. We are doing the same from a technology perspective. If I put in a system that only operates in English, I am diminishing my capacity of capturing new, more global customers.”

But technology does not solve all communication problems, according to Martin, as exciting and progressive as it may seem. As she gets emails in so many different languages, one of Martin’s own favourite tools is Google translate – but she recognises the drawbacks, not only of Google’s imperfect device, but also of relying on a remote application. “Naturally, it is essential to be very simplistic in the way we express ourselves and communicate through text. Every phrase has to be extremely basic, clear and concise with no idioms or local terms used. It’s by no means ideal but because of the flood of mails I get from all over the globe, this way of operating is essential,” she says.

“Yet if I were embarking on building a new relationship, or wishing to communicate with someone at a more senior level, I would much prefer to meet face-to-face. Text can limit the scope of discussions but if you can see someone in a meeting, the tone and general argument or discussion is still comprehensible, even if the actual words are lost.”

Reader Comments 

Please login or register to submit your own comment