Insight & Analysis

The path to automation

Published: Feb 2021

François Masquelier, Chairman of the Luxembourg Corporate Treasury Association (ATEL), Vice-Chairman of the European Association of Corporate Treasurers (EACT) and CEO of Simply Treasury, shares his thoughts on home working, automating FX management, and the evolving treasury skillset.

A flight of stairs on the outside of a building

One year on from the beginning of the pandemic, what is top of mind for treasurers?

As in many professions, home working has impacted treasurers a lot – and we know that home working will continue in some form in the future.

I see two risks as a result of this shift. One is the risk of having a siloed operation. The area of FX management is a good example – if you don’t have robust tools and solutions, there is a risk that you don’t know who is working on what at any one time. As a result, people might duplicate or miss actions – or there could be a time delay between identifying a risk and hedging it, which can be problematic when intraday volatility is high.

The second is that you risk losing your team spirit, which is quite important in treasury. When you have a team, you can think about processes and things you can improve. But if people are only in the office one week out of two, for example, you don’t see your colleagues and you may lose the creativity that your team can offer.

In reality, I don’t see anyone really satisfied by home working. A lot of people are desperate to come back to the office – I’ve had treasurers telling me they are missing the canteen and the coffee machine!

How important is it to address manual processes in areas like FX management?

FX is certainly an area where more automation is needed, as the process is often still highly manual. A lot of people think that if you use a platform that integrates with the treasury management system, the process is fully automated. But in reality, treasury management systems often lack the ability to create complex reports – which is why people end up using Excel or a dedicated tool to produce the missing pieces.

What are the barriers to further automation?

Sometimes budgets can be a hurdle – in some cases companies have had IT projects put on hold as a result of cost cutting. The other thing is human reluctance and resistance to change. Many treasurers have had the same TMS in place for years and don’t want to change it – they interface it with piece after piece, but they don’t want to issue an RFP.

But I also get the impression that some TMS providers are doing quite well, with a lot of projects in the pipeline – so maybe some people are considering a new system.

What else will treasurers be focusing on in the coming months?

With the focus on liquidity, treasurers have had a lot of pressure from the C-level to provide more reports and more simulations, which has kept treasurers busy over the last few months, especially because some do not have the systems needed to produce this kind of report.

I think working capital will become a key focus again, as well as capital structure and debt optimisation. As in every crisis, there’s an opportunity to reposition corporate treasury within the finance department – so I hope some of us are smart enough to take the lead and demonstrate the importance of treasury. Another topic we’ve been talking about a lot is treasury on demand and real-time treasury.

Do you think treasury teams will place more emphasis on IT skills going forward?

I’m always surprised when I see treasury jobs being advertised that don’t seem to put an emphasis on IT skills. If you have someone who understands treasury and is also a systems specialist, they can translate your needs and carry out development, without the need to go to your IT department or an external consultant. But of course, if you only have four or five people in your treasury department, this may not be feasible.

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