Finding space to reflect and refresh

Jonas Falk, Managing Director at SKF Treasury Centre Asia & Pacific, looks back on an eventful career, considers the challenges and opportunities ahead for the treasury profession and explains why he believes it is so important to never allow one’s innate curiosity to fade with time.

As the genial, thoughtful managing director of SKF’s APAC treasury in Singapore, Jonas Falk is evidently as passionate about his leisure interests as he is serious in helping to ensure the responsible and effective stewardship of the Swedish ball bearing manufacturing giant’s finances.

In choosing to commit time in pursuing his interests, philosophy and photography in particular, Falk is adhering to advice he would readily offer to others, young and old: “Always try to stay curious and learn new things outside your profession – it’s one way of getting a perspective on things. It’s so easy nowadays to do so as well, there are many wonderful things available online that can provide support for learning, and much of it is free.”

On the philosophy front, he has been very taken by Justice, a free, online introductory course in moral and political philosophy offered by Harvard University. Recently he began exploring Philosophize This!, an entertaining podcast series focused on the works of the world’s greatest philosophers and hosted by 28-year old Stephen West.

So what drew Falk to philosophy? “I am very much a beginner but it appeals because many of the skills and abilities you pick up are transferable to other areas. It touches on so many subjects and I think it makes me a better thinker. It uses logic and reason to analyse the ways in which we humans see the world. It is about critical thinking and logical analysis but also communication skills, critical reasoning skills, and problem-solving skills in general.”

“Another value of learning philosophy is that it helps one frame hypotheses, do research, define problems. It helps you to develop the ability to be convincing, build and defend your own views, but it also asks you to understand other perspectives. These capacities are highly valuable to have in any walk of life, especially in your interaction with people of different political, ethnical and cultural backgrounds.

“René Descartes defined philosophy as ‘the use of reason in understanding such things as the nature of the real world and existence, the use and limits of knowledge, and the principles of moral judgment’. I like that.”

Falk is even more passionate about photography – he is an accomplished lens-eyed observer of animals such as deer, snakes and all types of winged creatures but his main interest is landscapes. “When I want to really relax, refresh my mind, I just go out to take pictures. It’s my biggest hobby. Most people do something creative – painting, writing, singing, or just play golf or exercise. For me its photography, I find it totally absorbing.”

Adding value

As head of SKF’s treasury in Singapore, Falk’s responsibilities cover the company’s operations across APAC. His department’s work compliments that of SKF’s Europe and Americas focused treasury at group headquarters in Gothenburg. Key responsibilities for his team include funding, collection of surplus cash, FX management, hedging and making sure an effective cash management structure is in place.

The department is only four strong, which Falk says is the “bare minimum we can do with to keep things running”. He adds: “We always look to take on challenges, question everything. We try to keep adding value for the group – that is very important. And that means staying sharp and aware of external events that can impact us and figuring out how we can handle them.”

External factors that are constantly on his team’s radar screen include macroeconomic developments, geopolitical issues; global financial factors, industry trends and regulation. “We need to be aware of everything that can potentially affect our cash flows. We are not future proof but we do try not to lock ourselves into a certain way of being or managing, and that helps us to be prepared for the uncertainties of tomorrow.”

With treasury functions cutting through other parts of the SKF business, Falk says it is vital his department liaises effectively across the group. While it’s not always the case other SKF departments will know exactly what they are looking when they turn to treasury for help, his team stands ready to provide ideas backed up by its access to an array of information including market intelligence, market outlook, detailed data on listed SKF suppliers and peers: “There is a lot we can leverage to help devise solutions.”

Payments is one area Falk is especially keen to stay ahead of the curve: “In the future customers may come and say, for example, they want to pay using PayPal or crypto… we are not there yet but who knows? Payment rails wise, it’s a very fast evolving environment, especially across Asia. There is a lot of virtual banking coming up as well so we have to be on our toes on that front too.”

Buy and sell

An economics graduate of Gothenburg University, Falk joined SKF in 2000 and focused on risk control but from the outset his eye was on front office and FX trading. In 2003 the company offered him to trade for a couple months out of the Singapore office. A few months later he was offered relocation to Singapore for his first international assignment: “It was a very big thing for me back then. I moved there with my girlfriend, Jenny – we are now married – and stayed for two years. It was a very good experience, not just because of the work but because of the impact it had on me as an individual and a person. You learn a lot about yourself when you are posted overseas at an early age, especially about living and working in a different country with a different culture. You have to appreciate and respect cultural differences, which is very important in understanding how the world works.”

The couple moved back to Sweden in 2006, a year after their first son, Jack, was born. Falk left SKF a little later that year and joined Ekman & Co AB, one of the world’s oldest trading houses – it was founded in 1802 and, remarkably, is still in the hands of the Ekman family. The company today trades in pulp, paper, packaging, recovered materials and bioenergy and Falk’s role when he joined the firm was to head up the derivatives unit that traded wood pulp with futures on NYBOT with physical delivery of the contract. “It was all pit traded for one hour a day. I sat in an office in Gothenburg and used a broker firm in New York, sent all my bids and offers on excel sheets and watched the trades via Reuters, calling New York to tweak my prices…it all seems so incredibly ancient now but it was really good fun, exciting.”

By 2007 NYBOT delisted the contract with physical delivery of wood pulp. The CME group launched a cash-settled softwood pulp index futures contract in September 2007. “It was very enjoyable but then of course we had the financial crisis in 2008 and liquidity dried up completely. The market just collapsed. It was an extraordinary time and definitely the worst period of my life.”

As luck would have it, in 2009, with the aftershock from the crisis still reverberating strongly globally, Falk was contacted by a bank he had been trading with, Nordea, which offered him a senior sales manager role in the markets division with a focus on FX. After six years at Nordea he was contacted by SKF, ten years after having left the company. “They had this idea of sending me to Singapore again and being responsible for the same department I worked for as a trader there ten years earlier. I was very interested in doing that because we felt after the previous two year posting we weren’t really done with Singapore. I wasn’t actively looking for opportunities to move back but when this offer came from SKF it was an easy decision to make.”

Leveraging experience

Now, three and half years into his second sojourn in Singapore, Falk is very grateful for the experience gained and lessons learnt over the ten years away from SKF. “Most treasuries want to have people with banking experience but for me, when I joined SKF again, it was also about timeliness. Banking has changed very much during the last ten years so fresh, recent experience of banking helps a lot.”

“I joined Nordea in 2009 and left in 2015 and over those years banking changed dramatically due to things like all the new regulation and the fact that many banks had to repair big holes in their balance sheets, forcing them to review business models and make changes. Coming directly from that environment was very helpful when I arrived back in Singapore, especially in dealing with the bankers here. I think they appreciated my experience as it meant they could be open with me, they knew that I knew how it now works for banks.”

Gaining experience of both the buy and sell side over the ten years without SKF was another big positive: “I guess this goes for all professions but moving from one side to another side of any role can be very instructive and useful. I’ve been on the buy side, then sell side with a bank, and then changed company again and am on the buy side again. You learn so much from doing that. It helps to give you a much broader understanding of roles. That’s especially important in a managing director role where you have to be more generalist. That is my experience at least.”

Always try to stay curious and learn new things outside your profession – it’s one way of getting a perspective on things.

In mulling the challenges ahead for his profession Falk is strongly of the view that treasurers should look to disrupt themselves before they have disruption foisted upon them: “We have to view technology as an opportunity not a threat. Some people worry that, for instance, robot technology will take all our jobs but for treasurers arguably it will mean doing less of the formulaic, routine and predictable and spending more time on strategic matters and analysis to be better prepared for the future.”

Falk certainly sees treasurers increasingly having to learn new skills to help them fully exploit new technologies that are shaping the future of banking and treasury. As well as robotics, he has high hopes for AI, especially for data analysis and forecasting. Indeed, he is of the view that data gathering, sorting and analysis using new technologies will become a critical operation for treasuries of the future: “We don’t have a global payments platform as yet but in the future that may be possible. That would create a lot of data so analysing it, exploiting it will be very important and beneficial not just for treasury but for the group as a whole.”

He adds: “In many ways we are still having to deal with platforms, IT infrastructure that date back to the 70s. Over the next few years that is going to change. It has already started happening; we are seeing a lot of open source, open banking applications, APIs and customised peer-to-peer connectivity with boundless financial functionality such as funding, discounting, payments and settlements, and all of it integrated with existing processes. Banks are launching portals to attract communities; they are opening up now and delivering connectivity. It’s a very exciting time as it seems we are taking some important steps that will inform the future of banking.”

Falk says that in comparison to Europe and the Americas, Asia appears to be moving much faster in developing and adopting novel financial technology and solutions. Singapore is a case in point, with the central bank MAS working closely with other banks, fintechs and financial service players to create an environment that supports the emergence and development of new technologies. Going forwards, he believes one of the big challenges will be getting the regulatory frameworks in place for new technologies, a task that is “especially urgent” in the payments space as it is evolving so rapidly.

Indeed for Falk the pace of change in the payments space is so rapid he believes it is not unreasonable to hope that at some point in the future SKF might end up with just one bank account for functional currencies per country: “Today if you look at the payments landscape we have a lot of different types of payments – domestic, international, clearing, different types of cross border payments and so on. I hope payments in the future will be just like sending an SMS.”

The bigger picture

More broadly, Falk has watched with growing dismay the US-China trade war, the US pull-out from the Trans-Pacific Partnership, tensions in Europe due to Brexit and general global drift away from multilateralism. “These things are never good for global trade or indeed for running of treasuries for cross border payments, collections, setting up loans and deposits. They generate new frictions. We have had decades of globalisation but there has been this shift to protectionism and I think it will get worse before it gets better. In the long run I am positive but right now I am a bit worried.”

With challenges for treasuries multiplying and workloads getting heavier, young, inexperienced treasurers might feel especially under pressure to contribute much more, but Falk urges them not to lose sight of the bigger picture: “My advice to them, and young people in the very early stages of their career generally, is don’t be in too much of a hurry. You don’t have to worry that your colleagues will expect you to know everything about treasury during the first period of your career. Ask a lot of questions, show you are curious, willing to learn and understand how things work. I learnt a lot by asking questions when I was young, there is nothing wrong in doing so.”

He also advises that they seek out a mentor: “Not all companies have a mentor programme but that shouldn’t stop you – try not to have a mentor from your own unit. Rather it should be someone away from it, even from another company. And it doesn’t have to be too formal, you can meet over lunch to discuss topics you have sent in advance. Good mentoring is not appreciated enough I think – it’s very useful and in the future, it will become even more valued.”