When Julia Fordham started her career as a banker at Barclays in the early 90s, moving into treasury was not even on her mind – let alone the thought of spending the next 23 years in the profession. But with her many years of experience, it’s no surprise that Small World Financial Services invited her to become its first Group Head of Treasury.
Small World Financial Services is a regulated global money transfer company with the sole aim of making the world a smaller place for its 15 million customers. It has over 250,000 cash pick-up locations in over 90 countries, across Asia, Africa, Europe and the Americas, working with some high profile partners to enable its clients to send and receive money online, via mobile app or mobile wallet or at one of its affiliated agent locations. In Asia, for example, it leverages a host of banking partners including Yes Bank in India, BNI in Indonesia, Hang Seng in Hong Kong, and Maybank in Malaysia, to name just a few.
With such a wide financial remit, the responsibility for keeping the company’s treasury operations running as smoothly as possible rests on the shoulders of Julia Fordham, who was appointed as Small World’s first Group Head of Treasury in February last year. Based in central London, Fordham is in charge of Small World’s two treasury teams – one in Europe (Madrid and London), and one in New York.
“When I was appointed at Small World the company wanted to ensure that the treasury model was fit-for-purpose, as the business has grown quickly through acquisition and organic growth,” she says. “My primary focus has been looking at the treasury operations, ensuring they are scalable as volumes grow, making sure we are doing the best we possibly can for our customers.”
So how did Fordham get to where she is now? “Do you want the long or the short answer?” she jokes. “I started life as a banker back in the early 1990s, following my early training as a graduate entrant at Barclays on its management development programme.” In her seven-year tenure, she undertook several managerial positions, her last being in a team covering the securities and broker dealer industry.
“I was in the team that covered Barclays’ relationships with US and Japanese securities houses when I was approached by Morgan Stanley (a client) asking if I would consider moving into treasury,” she recalls. “I said I wasn’t interested because at that time I was thinking of moving out of banking for something completely different, possibly in marketing or publishing. They assured me that the role was not ‘more of the same’, but it was in the corporate treasury function, and they wanted me to come and check it out.”
Fordham liked what she saw and took Morgan Stanley up on its offer. She immediately had no regrets, liking the switch from being on the sell-side of the desk to the buy-side. “Having been a lending banker really did equip me with the knowledge of how to evaluate bank services – I started out in the bank relations team, then sat my ACT exams, broadening out into different roles, making the most of it as a career opportunity.”
Fordham says that in her 14 years at Morgan Stanley, no two days were ever the same, taking up different jobs every couple of years. “I started out heading the bank relations team in the days before the euro, so we had to maintain lots of different bank relationships in order to fund many different currencies – same day deutschmark, same day guilder, same day French franc, so it was a really interesting change for me,” she recalls.
Most treasurers are in a constant fight to get budget, not only for headcount but also the systems to start implementing and leveraging new opportunities.
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”.
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.”
Even if there is no global recession, companies are definitely cautious.
The World Economic Forum predicts that in 2020, in purchasing power parity terms, Asian economies will become larger than the rest of the world combined for the first time since the 19th century. With the IMF suggesting a weak European economy, and with US productivity on the slide, how does this mixed bag affect a global operation like Small World? Fordham is quite bullish: “In the long term, people will always need to send money home to friends and family, and I don’t see the global trend towards a more mobile workforce changing anytime soon.”
An important aspect of working in treasury for Fordham is the need to switch off – quite literally. ‘Presenteeism’ is a global issue, affecting many professions. In 2018, South Korea introduced an initiative forcing employees to leave work on time in an effort to halt the harmful effects of working over-long hours. “I do feel quite strongly about the right to switch off – France, for example, has enshrined it in law that employees have the right to disconnect after work,” she says. “I try really hard not to read emails in the evening and at weekends, and that’s particularly hard in the job that I do currently because we are in a payment services environment where the world never sleeps!”
She continues: “If there is a legitimate reason for being connected, that’s a different thing – I have a team in New York and it’s important that I’m available to them. But I must say that I really don’t miss the ‘face time’ culture that was prevalent in banking a few years ago.”
Fordham is also a firm supporter of allowing staff to take proper breaks. “You have to accept that people have the right to disappear for two weeks, firstly for reasons of personal welfare, but also because it’s good risk management practice,” she explains. “An interesting study a few years ago showed that all the big rogue trader incidents over the past 20 plus years have had certain common factors – one of which is that the people involved never took holidays, or if they did they could always access the company’s systems. The scandals all happened within a corporate atmosphere where the attitude of ‘nobody else knows how to do this but person X’ was commonplace.”
So what does she do to switch off? “I’m a musician and love to play the saxophone, having started learning in 2010. Now I play in two or three bands in my home city of Cambridge,” she says. “Sometimes it feels a bit much, as I’ve got three children aged 20, 18 and 14 – they now have very busy and active lives of their own, so when I’m not performing they take up a lot of my time.”
Being a working parent, Fordham naturally has strong views about women in the workplace. “I think the role of women in treasury has changed over time, and I am glad to be able to say that,” she says. “I used to work part-time when my children were small. It was really tough for me, both culturally and financially, but collectively I think the industry has come together and learned that we needed to challenge that.”
Initiatives such as Treasury Today Asia’s Women in Treasury provide essential platforms for professional women to communicate, learn from and network with one another, but Fordham argues that there is still a long way to go, especially with regard to gender pay disparity. But when all is said and done – and given her chosen pastime – one thing is clear for Fordham: if treasury can define its existence and prove its worth to senior management in this ever-changing, volatile, digitising world, it will be music to her ears.