But after Morgan Stanley was rescued during the financial crisis in 2008, Fordham believed it was time to move on. She joined the group treasury function of pan-African financial services group, Old Mutual plc, in late 2009, taking the role of Head of Funding & Risk.
This new role was vastly different from what she had been doing, Old Mutual being regulated in the UK by the PRA as an insurance company and so subject to Solvency II regulations. The treasury department at holding company level was therefore somewhat more ‘corporate’ in focus. Being based in its London head office, for the first time she was involved in bond issuance and liability management creating “a real intellectual challenge”. She was also in charge of the middle office function, monitoring daily treasury activities from a risk perspective. This offered her “more opportunity to put my knowledge into practice, and develop new expertise”.
Power of tech
As testament to her willingness to engage with the new, Fordham is an advocate of treasury technology. She has witnessed it shift up a gear in recent years, especially with the rise of artificial intelligence (AI), robotics and machine learning. But there is an edge to her view on the matter. “The sheer fact of life for most treasurers is they are in a constant fight to get budget, not only to get headcount but also the systems to start implementing and leveraging those new opportunities,” she states.
One key challenge for many treasurers is having to continually show senior management the benefits of a treasury management system (TMS). Fordham raises a salient point which is often discussed in many boardrooms, from Asia to the Americas: “Everyone thinks that they want a TMS and thinks they want straight through processing, but when it comes to the cost, which can add up to six figures in the first year of implementation, treasury systems can still end up taking a back seat compared with other initiatives.”
The pace of change in the treasury technology market is as much of a challenge as an opportunity, not least because of the risk of ending up with solutions which quickly become out of date. The key, Fordham believes, is to keep listening, and to stay connected to your treasury network because the market, particularly in payments and cash management, is moving so quickly it is hard to stay abreast of developments.
Making these sorts of decisions in a technology environment that may be completely different in six months’ time is a genuine pain-point for treasury, especially when most treasury teams are already fully engaged in managing ‘business as usual’: “I think that’s why you see so many companies go to consultancies.”
Notwithstanding the challenges of keeping pace, given the nature of Small World’s role as a global money transfer business, Fordham is acutely aware that the world of payments technology continues to evolve, especially at the consumer end of the spectrum. Here, Asia is leading the customer shift to mobile payments, with the world’s top ten mobile payments adopters located in eight Asian markets including Indonesia, Singapore, and the Philippines, according to PwC’s Global Consumer Insights Survey 2019.
But Fordham believes that banks, to some extent, have been slow to provide real-time payment solutions. She explains why: “By definition, ultimately real-time payments would mean the mechanisms of value transfer being available 24 hours a day, seven days a week, 365 days a year. If there is a reluctance by banks to implement this availability, then maybe it’s because they struggle with the same sort of issues that everyone else is dealing with – round-the-clock availability of staff and, crucially, of liquidity and collateral.”
Could digital currencies solve this problem? “I don’t think so, because although they facilitate connections, where’s the liquidity?” she says. “If you have information that say, somebody in the US paid someone in the Philippines, you can get that information through within seconds, but you still have to connect the dots of the clearing systems that need to speak to each other to get that real value transfer.”
Fordham is not much of a fan of cryptocurrencies, and struggles to comprehend why any currency would still want to be known by that moniker. “It seriously baffles me because, by its very definition, ‘crypto’ means ‘hidden or secret’, so what has it got to hide?” she muses. However, she recognises that fully digital currencies are here to stay, and believes they will end up being regulated.
“Either that means that central banks will create their own digital currencies, or some of the more successful recent digital currencies will allow themselves to be regulated, because they have people on board who understand what it means,” she says. “So, in my mind, there’s currently a race to become so big that nobody can ignore you.”
She continues: “By doing so, a digital currency will become the ideal partner of a central bank that does not want to spend its resources creating its own version, or it will look attractive to a well-established banking organisation. Or the currency will finally embrace the fact that it needs to address issues such as liquidity and regulatory compliance on its own. However, I strongly believe that once there is a big central bank player in that space, all the other smaller digital players will look totally irrelevant.”
Ultimately, Fordham is in no doubt that current cryptocurrencies are going to look very old fashioned within a few years. “I know that’s not a popular view, but I just think there will soon be a big regulated player that will finally come along and sweep them all under the carpet.”
Technology may be one pain point for treasury, but what about the current economic landscape? “I think we are in for a bit of a difficult time economically – but even if there is no global recession, companies are definitely cautious,” Fordham says. “If this sentiment continues in the long term then to me it only heightens the need to get treasury better understood and ‘out there’ as a profession.”
She believes that lots of things happen in economic good times, such as the promotion of flexible working and other staff retention initiatives, as well as a willingness to invest in new technology such as AI, machine learning or a TMS. “However, in cautious times, sadly investment can get pushed to the back burner, whether that is people or systems. A recession would put many companies into survival mode.”