Managing risk
We all have to make decisions daily. Some entail few risks, while others naturally require more. As Siemens Group Treasurer and a keen mountaineer, Peter Rathgeb understands risk better than most.
Whether driving change in treasury processes or mapping out his next climb, Peter believes thoughtful risk management is essential, and the way risks are assessed are quite similar in both cases. According to Peter, use your intuition, which grows not with age, but with experience.
As a manager, colleague and collaborator, there is another component to risk management as well: making sure your team has everything it needs to succeed – the right tools, knowledge and experience. This sits at the heart of his management philosophy.
Introducing Peter Rathgeb
Away from the mountainside, Peter has occupied the post of Group Treasurer of Siemens AG since 2018. By virtue of this role, he is also CEO of Siemens Treasury GmbH. His career at the German multinational spans over two decades, including a highly successful stint as CFO of Siemens Bank, which he founded in 2010.
Under Peter’s direction, treasury is now entirely product-oriented with six different pillars each focusing on a particular product.
The six pillars
These are cash management, FX, money market, guarantees, pensions and insurance. Peter has propagated a very open culture, promoting interaction and the sharing of best practices, that keeps all six pillars united in developing towards a common goal delivering value for Siemens and for its customers.
Empowering the team, enabling change
This is where Peter’s management philosophy truly comes into its own. It is often the case that the most rewarding mountaineering trails are the ones that entail the most risk. Likewise, in the finance industry, the higher the risk, the higher the expected return should be. Perhaps the most critical way Siemens’ treasury manages the risks involved in its decisions is making sure decisions get made – as taking too long can lead to being overtaken by competitors or exhausting one’s employees.
“Peter gives us the space to innovate, as well as the autonomy to make decisions that meet our goals. This speeds up the many processes involved in, for example, implementing an emerging technology – and is one of the leading reasons that our treasury team is consistently a market frontrunner,” says Heiko Nix, Siemens Cash Management and Payments.
“This award is very important to us because it recognises the incredible achievements of our entire treasury team, not only regarding internal processes and services but also to our effort in developing further business opportunities and to improve the customer experience. We also see it as confirmation of our strategy that aims to simplify our processes and leverage digital tools, automation and data driven insights to optimise our financial operations, enhance risk management and support strategic decision-making within our organisation.”
Peter Rathgeb, Group Treasurer
Failure and speak up culture
What if these decisions do not work out as planned? The message from Peter is simple: “Let’s learn from it”. Siemens’ treasury operates a failure and speak up culture, whereby employees are empowered to learn from unsuccessful endeavours. He believes the more risks the team can take, the more experience they gain and the more they learn.
Five pioneering projects in 2022
Siemens does not shy away from ambitious projects – as Peter frequently reminds his colleagues, “if it were easy to implement, then it wouldn’t be innovation!”
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The next generation of payments via blockchain: blockchain has been discussed in the treasury industry for several years, but a perceived lack of practical use cases means the technology has yet to be widely adopted. Siemens, collaborating closely with J.P. Morgan, has gone some way to realising its potential – developing payment processes using blockchain and programmable money.
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Digital bond: a first for a DAX corporate: in February 2023, Siemens became one of the first German corporates to successfully issue a digital €60m one-year bond using a public blockchain network. Siemens’ treasury succeeded in applying both disruptive technology and a new legal regime – the German Electronic Securities Act.
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Unlocking real-time treasury with virtual bank accounts: for Peter, an innovative organisation is an agile organisation – and complexity can often be the enemy of speed. Siemens has undertaken the virtualisation of a large part of its corporate bank account structure – converting its traditional IBANs with Deutsche Bank into virtual IBANs.
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Trade finance automated guarantees: with operations spanning 200 markets across the world, Siemens has up to 15,000 new guarantees created every year. Naturally, managing such a quantity creates significant operational workload. Siemens’ Trade Finance Advisory team turned to AI to cut through the complexity. It pioneered the TFAI [Trade Finance Artificial Intelligence] tool, which uses artificial intelligence to automate the recognition of guarantee clauses. Employing a machine learning algorithm, it carries out preliminary automated checks of guarantee clauses – reducing operational effort without adding to the risk profile.
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New FX hedging strategy: in the past, Siemens hedged its exposures manually on a case-by-case basis. Siemens has now split its hedging approach into three distinct categories, which are decided by the risk profile of the entities.
Peter represents a new breed of corporate treasurer and is a most deserving winner of our Corporate Treasurer of the Year 2023.
