Technology-enabled treasury

Debdatta Banerjee, Head of Treasury Operations at NVIDIA, discusses her career path, the challenges brought by geopolitical disruption, and the importance of integrating new acquisitions effectively. She also explains why fintech is becoming increasingly key to the treasurer’s role.

“The cornerstone for success in treasury is built on having a good understanding of the wider business,” says Debdatta Banerjee, Head of Treasury Operations at NVIDIA. “And treasury itself is not just about cash or designing the optimum cash structure. It’s about the end-to-end.”

As Head of Treasury Operations at technology company NVIDIA – a role that she has held since September 2020 – Banerjee is well placed to understand the evolving role of treasury within the organisation. At the beginning of her career, however, treasury was not on her radar, and after graduating from Delhi University with a BA in Commerce, Banerjee had not yet developed a clear idea of the direction of her future career. “At that stage, I had no idea what I wanted to do with my life,” she reflects. “Should I do an MBA? Or become a chartered accountant?”

Embarking on an MBA in Finance and International Business proved pivotal in deciding the direction of travel for Banerjee’s subsequent career. During her studies, she became intrigued by the world of derivatives and valuations, not least because of its sheer complexity. And so, shortly after gaining her MBA, Banerjee began her career as a valuation analyst at the hedge fund D. E. Shaw Group, operating out of New York and India.

“They had the most complicated long/short equity investment strategies,” she remembers. “It was at the time of 2000-2007, when there were a lot of valuation crises due to the non-bank financial companies and collateralised debt obligations. Because of that, there was a lot of demand for people who could value those instruments based on inputs not available easily in a liquid market.”

Treasury in Silicon Valley

After a year at D. E. Shaw, Banerjee was offered the role of Treasury Analyst at Microsoft, where she was responsible for the valuation of assets and cash flows. In some respects, this was a continuation of her work at the investment group.

“When I started it was easy for me to see parallels between Microsoft and a hedge fund, because although with a corporate treasury the risk appetite is limited, the managers were able to engage in so many fascinating strategies,” she explains. From here, she moved into treasury operations, working with all of the groups in treasury, including Investments, FX, Commodities and Strategic and other investments.

Moving to the heart of treasury operations at Microsoft brought her into contact with a high level of technology and automated procedures. “With that level of cash, good visibility is impossible without proper investment in technology,” says Banerjee. Finding herself drawn to the world of technology, she learned its importance in increasing efficiency, speeding up processes and reducing error rates. “My career became shaped by fintech,” she reflects.

Moving to eBay seemed like part of a natural process for Banerjee, not least because she had collaborated with the company during her time at Microsoft: “eBay had reached out to me as part of a benchmarking exercise because we had implemented a FX option matching system that helped us move away from the Neolithic process of paper confirmations,” she explains. So, when a position became available, eBay got in contact to see if Banerjee was interested.

“Yes, I was interested!” says Banerjee. “It was a very organic move.” Managing the treasury controllership team was also a role that brought Banerjee a greater understanding of complex accounting, and the impact of stock-based compensation on earnings per share. “It was a very different world for me,” she observes.

In this exciting – and challenging – environment, Banerjee was able to expand the team, carry out an RFP for a custodian, and set up an end-to-end automated confirmation system. During this time, PayPal, which had been acquired in 2002, split from eBay – a move that ultimately propelled Banerjee and her team into the world of payments. “It was fabulous, just understanding the architecture of how payments work,” she recalls. “The challenge of doing cross-border payments and using different currencies, while at the same time reducing friction and keeping costs low, making the process more fluid and creating value.”

Intelligent design

In September 2020, Banerjee was offered the position of Head of Treasury Operations at the technology giant NVIDIA. Given her background in technology, the prospect of working for a company generally acknowledged to be at the cutting edge of graphics processing units and artificial intelligence was extremely appealing.

“Having had a number of roles in treasury, the appeal for me lay in what the company actually does,” says Banerjee. “Through their AI expertise, they have been able to achieve many things like the genome sequencing for Coronavirus, and they are also involved in long-term weather forecasting and plotting the effect of climate change on crops.”

At NVIDIA, Banerjee leads the team responsible for treasury operations and cash management worldwide, working with the tax and legal departments around the area of legal entity structuring, improving processes with the use of cutting-edge technology as well as managing global bank relationships. In fact, keeping an eye on the cash and making sure that it can be utilised for all the company’s activities, is of primary importance.

“What is cash management? It’s being able to go into the system and make sure that there is enough cash for the company’s needs, including investment activities, strategic acquisitions and stock buybacks,” says Banerjee. “We have to make sure that cash is not building up in any region where we can’t invest it or bring it back to our main region. With certain countries, it can be difficult to get trapped cash out, so we need to give a lot of thought to that.”

Despite having a comparatively small treasury team, NVIDIA manages more than US$20bn in cash, harnessing technology to achieve continual oversight of cash as well as current exposures and risks. “We are a small – but mighty – team here in treasury at NVIDIA, with Treasury Operations, Investments, FX and Collections all rolling into the Treasurer,” says Banerjee.

With regional teams spanning many different locations around the globe, the first challenge of the day is to catch up with events in the rest of the world. “When we wake up, we’re already 12 hours behind what’s happened in Europe or the Middle East,” she says. “So our first priority is to figure out what has been happening in the world.” Without the luxury of dedicated treasury professionals in these locations, Banerjee uses technology to monitor events and automate processes, and her team has also worked hard to build up strong relationships with the company’s regional teams.

“What we have done is build alliances with our regional teams, where we can delegate the lower priority events,” says Banerjee. “The higher priority events – major crises and geopolitical issues, technology or connectivity problems – still land on our plate.”

Challenging environments

With any organisation, disruptions in a particular part of the World can have dramatic consequences. And for a company with a global reach, volatility in any one region can affect the whole organisation. For Banerjee, business continuity plans – BCPs – are extremely important. Designed to help companies continue operating in the event of threats and disruptions, these plans mitigate against potential events that range from minor to catastrophic.

“As a treasury professional, what gives me sleepless nights more than anything else is geopolitical disruption – what am I going to wake up to?” says Banerjee. As she explains, “business continuity planning works at different levels, starting from light green – someone failing to turn up for work, say – to red, a whole country facing disaster. But you still have to make payroll. We need to know how we can keep it ‘business as usual’.”

Another challenge lies in the area of acquisitions. With no two acquisitions being exactly the same, integrating new companies into the business can be challenging. “We’ve tried to create a ‘playbook’ for acquisitions, but there are always variables and surprises that cannot be forecasted, that we need to discover when we go through our due diligence,” she notes.

Part of the process of the acquisition of other companies is to familiarise them with the NVIDIA culture – without negatively impacting the existing culture. “It’s all about working with them to create synergy, to get the best out of both cultures,” says Banerjee. “But at the same time, it’s not just about matching the people, but also matching the technology.”

The latter can be one of the biggest challenges when an acquired company is using different systems and solutions. Because many of the acquisitions bring with them legacy processes, their file formats and messaging can be in different structures, which in turn creates business friction. Removing these barriers using a single format streamlines processes and decreases friction, allowing the movement of money to become virtually seamless. As Banerjee explains, “for a treasury person, the major concern is that money should not be sitting idle. It shouldn’t be hitting negative interest rates, and it shouldn’t be causing an overdraft somewhere.”

Accurate forecasting

Although the forecasting of revenues is handled by the financial planning and analysis (FP&A) team, Banerjee and her team work closely with the accounts payable (AP) and accounts receivable (AR) teams to obtain accurate forecasts. With her team continually working to fine tune these forecasts, finding a system that can ultimately deliver consistently good results has taken significant effort.

“The strength of any cash management process lies in how good the forecasting is,” she says. “But we have found AR forecasting to be incredibly difficult. You would think that it would be seasonal and that after a time you would know what it was going to be, but customer behaviour can be very erratic.” Although NVIDIA has been around for decades, she notes that the continued focus on expanding into new areas means it is still very much a growing company.

The future of treasury

Banerjee sees the evolving role of the treasurer and the continuing advance of technology as being closely interconnected. As such, she believes that treasury has moved beyond its traditional remit to embrace the world of APIs, gpi and other innovations.

With real-time models representing the biggest challenge for treasurers, she explains, “Treasury is no longer just about cash – it’s also about the system.” For example, the CFO could ask at any time how much cash is in a particular country, and how quickly it can be accessed or moved from one location to another.

“In addition, business cycles can vary wildly, and taxation is changing all the time,” says Banerjee. “If you want to align your inflows with your outflows, how do you make sure that there is a steady flow of cash to cover all the expenses that come up? From a treasurer’s point of view, having good visibility, and having good forecasts, is extremely important. It sounds very simple, but it’s very complicated to put into practice.”

For Banerjee, the powerful tools included in treasury workstations mean they are a vital tool for the treasurer. Acknowledging that for most people the attitude is ‘if it isn’t broken, don’t fix it’, she believes it is only when new systems are implemented that people realise their true value. “The problem is that people are scared of changing existing practices,” she adds. “How do you change established thought processes so that the technology is accepted?”

In Banerjee’s view, a thorough understanding of the whole business will become increasingly important in the coming years, with the treasurer being seen as a key stakeholder to be consulted – rather than informed – about important strategic decisions. “I see the role becoming more and more fintech than just traditional finance,” she explains. “I also see treasury as a whole becoming an integral part of the business, rather than operating in an isolated silo.”

Rest and recreation

Outside of work, one hobby that Banerjee loves to pursue is astronomy. With the unveiling of the James Webb space telescope – the largest and most powerful space telescope ever launched – she is particularly thrilled to know that NVIDIA GPUs are playing a key role interpreting data streaming in from the craft.

Closer to Earth, she also enjoys attending yoga and cookery lessons, as well as planning for her next vacation. “I love travelling to different countries,” she says. “Travelling has opened my eyes to different cultures. I think that is so important when your work touches so many countries around the world.”

But for Banerjee, the one outside interest that gives her more happiness than anything else is to help out at animal shelters and to increase the chances of the animals there being rehomed by spreading awareness about their plight.

Final word

Looking back at her time in treasury, Banerjee reflects on the changing nature of the role and the constant stream of new challenges to be addressed.

For a long time, treasury was fairly invisible within the organisation – but today, she argues, treasury is involved in every aspect of the business. “I am so happy to be where I am right now,” she concludes. “I would have thought that after 16 years, each day would be entirely predictable. But I find that there is a new challenge almost every other day.”