Leading treasurers discuss the risks and opportunity of navigating the digital transformation
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Technology has the power to transform businesses and their treasuries, but embarking on a major project involves many complexities. Treasury Today gathered some of the brightest minds in treasury at J.P. Morgan Payments’ UK headquarters in London to discuss what their priorities are when it comes to leveraging the latest technology, how they advocate for digital transformation, and the advice they have for others.
Since the dawn of the industrial revolution, technology and innovation have always been the keys to transforming industries, businesses and the efficiency of how money flows. Today, no group is more impacted by digitisation and transformation than treasurers, so to understand more about what this means for them, Treasury Today invited treasurers from several organisations to participate in a Powering Change Taskforce hosted at J.P. Morgan Payments’ offices in London. The conversation was wide-ranging and covered their approach to digitalisation and leveraging the latest technologies to improve the processes in the Treasury function.
A key focus for the group was how best to apply artificial intelligence (AI) tools and automate their processes effectively. Each participant had their own nuance. For example, Malcolm Grant, Head of Treasury for the International Organisation for Migration (IOM) – the United Nation’s migration agency – has different drivers compared to his counterparts working for commercial multinational corporations. IOM operates in 170 countries, and its treasury is prioritising effective cash flow forecasting – an area that Malcolm believes artificial intelligence is going to help address.
‘Transformation’ can end up being a buzzword.
Malcolm Grant, Head of Treasury, International Organisation for Migration (IOM)
Organisational complexity is something that Alex Ashby, Group Treasurer at WPP, a communications, advertising and public relations company, experiences. The company is very active in M&A and continues to acquire numerous agencies which all have their own unique offerings and systems. In addition, the treasury team is accountable for 110 countries of operation and a complex landscape of many enterprise resource planning (ERP) systems. As with Malcolm at IOM, a key goal with leveraging the latest technology is to improve the visibility of data and to automate treasury processes.
For others, the focus has been on major implementation projects that introduce a new treasury management system (TMS) to their organisations. Some participants, including Vandana Vajir, Head of Finance, Treasury Systems and Process Transformation at Heathrow Airport, and Louise Woodroffe, Assistant Group Treasurer at retailer Marks and Spencer, have recently been involved in implementing such systems.
Defining digital transformation
The Taskforce discussion started with defining a digital treasury. Generative AI – in the form of Microsoft’s Copilot – was on hand to assist. The AI-generated definition was that digital treasury is about real-time transparency of cash flow information, seamless integrations of systems reporting, superior data management, the reduction of operating costs and the use of machine learning. This generative AI definition was on point with what the treasurers believed digital transformation to be. Alex added that a digital treasury for him is about dashboards that provide real-time information to the operating units streamlining decisions and operations. Malcolm added that ‘transformation’ can end up being a buzzword.
It is important to have the space and the capacity in your leadership team to have a five-year plan, and to review that plan at least annually – that can really help.
Jyoti Jiwani, Treasury Consultant
These days, the buzz is around generative AI and many of the Taskforce panellists noted how they use it in their professional lives to record meetings and produce minutes, for example. They all acknowledged that such tools save time, but there is still the need for a human to sense check the output – AI doesn’t always get it right.
The technology wish list
The many applications of AI have the power to address some of the most pressing challenges that treasurers face, particularly with greater visibility and analysis of cash management cycles, for example.
“The digital treasury dream is to make forecasting more reliable; a more immediate wish is for real-time FX [foreign exchange] and cash management,” says Peter Tallboys, Treasury Manager, Asahi Europe International. For Vandana, “The digital treasury dream is to have access to real-time information.”
The digital treasury dream is to make forecasting more reliable; a more immediate wish is for real-time FX [foreign exchange] and cash management.
Peter Tallboys, Treasury Manager, Asahi Europe International
The participants also had other items on their wish lists: these included increased data analysis, rather than just number crunching; visibility on the currency risk that is embedded in commercial contracts; the use of data for more forward-looking analysis; and the opportunity to be proactive rather than reactive.
Putting such a wish list into action, however, requires plenty of planning. This is something that Jyoti Jiwani, in her years as a treasury consultant – most recently at mining company Anglo American – has plenty of experience doing. When it comes to achieving true treasury transformation, she says, “It is important to have the space and the capacity in your leadership team to have a five-year plan, and to review that plan at least annually – that can really help.”
Managing business continuity
Implementing new technology often involves many other teams and departments, and communicating the compelling reason to do it can be challenging for some. It can be hard to convince others that a digital transformation is necessary, the participants said, but sometimes a change in circumstances can force a decision. This is precisely what happened with the COVID-19 pandemic, highlighting the need for digital tools – as well as effective business continuity planning.
Where previously there may have been resistance to implementing a new technology, it can suddenly – because of the change in circumstance – become a necessity. Louise commented that it is important for organisations to have contingency plans in place and ensure that teams are ready to be mobilised no matter the scenario.
It is important for organisations to have contingency plans in place and ensure that teams are ready to be mobilised no matter the scenario.
Louise Woodroffe, Assistant Group Treasurer, Marks and Spencer
Communication and influencing skills
Mobilising various teams in an organisation, however, relies on strong communication and influencing skills. These also come into play when persuading stakeholders of the need to allocate budget to implement a new treasury technology. This is a challenge particularly when treasury is a cost centre, and not a revenue driver for its organisation.
The participants discussed the tips and tricks they use for persuading stakeholders that a digital transformation is necessary. These included highlighting the cost-savings that could be garnered, and how implementing a TMS, for example, could enable the organisation to take on more business. Another motivator is reducing risk, and this can be a persuasive argument to use, especially when losses due to financial crime – such as fraud and cyber-attacks – can be quantified. There is also the reputational risk to consider – and the associated impact to share price and credit ratings – which is a consequence that organisations do not want to ignore. Vandana commented that the argument never centres on reducing headcount – treasury teams are often lean anyway – but rather about the reduction of risk.
Many finance directors started their career in treasury, and they understand the risks and opportunities that are being conveyed to them.
With other teams, however, there may be the need to adapt the communication style, such as with procurement, legal and compliance, IT and so on. There may also be a need to demystify treasury and build alliances with other teams across an organisation. “Speaking their language has really helped me move the dial with treasury projects,” Peter says.
Communication skills can come to the fore when managing digital transformation or implementing a new technology. Vandana says when communicating with the various stakeholders in an organisation, “You have to explain the same topic in a different way to different audiences.” On a practical note, one participant recommended a vocational course in storytelling to help with developing compelling narratives and improving their presentation and influencing skills.
This makes the need for treasurers to closely partner with their communications teams critical to their success – because persuasion and influencing requires storytelling.
Digital treasury is about dashboards that provide real-time information to the operating units streamlining decisions and operations.
Alex Ashby, Group Treasurer, WPP
Managing people
Once a transformation project has been approved, the success of the implementation is not just down to the technology itself – people are just as important. There can be resistance to new ways of doing things, and this prompted the question about whether to approach transformation all at once, or to tackle it in smaller steps. If change is incremental, for example, it could be easier to achieve. Peter says it really depends on whether transformation is happening just within treasury or in other departments as well. “Small changes are more likely to face less resistance,” he notes.
Louise comments that the all-at-once approach can be high risk, but sometimes, even when a risk-averse approach is being taken, “every so often you need to take a big step forward in order to truly realise the benefits. The focus should be on how to do that in a controlled way, and also to take people on the journey with you.” Part of the challenge can come from people not understanding where they’re trying to get to, and sometimes fear can take hold and halt progress when people don’t understand the goal.
Advice for the future
Technology is also changing rapidly, and the skillsets of the workforce will need to evolve in the future. Vandana continues: “Roles will change in treasury, and soon, we will need people with a different skill set; we need to invest in people and continuous learning.”
Many treasurers will have to consider how to future proof their careers and keep their skills up to date. When asked what advice they would give to more junior treasurers who are starting out in their careers, many suggestions were offered.
Roles will change in treasury, and soon, we will need people with a different skill set; we need to invest in people and continuous learning.
Vandana Vajir, Head of Finance, Treasury Systems and Process Transformation, Heathrow Airport
Peter says that it is important for people to develop their own unique selling point so that they become invaluable to their team, as well as build relationships across the organisation. “Work with your banking partners and other departments in your business. From the CFO [chief financial officer] down, connect and engage with everyone you interact with throughout your career.”
Malcolm also pointed to the power of education, which isn’t only technical learning, but also professional development through industry events and learning from peers.
In order to add value to an organisation, it is necessary to understand what the business goals are so that treasury can effectively support its needs, be a valuable strategic partner, and leverage technology to make progress. Peter says in his advice to others: “Make sure you understand what your company’s goals and objectives are, and align with what they’re doing – and vice versa.”
Powering Change
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A hub for collaboration, exploration, and learning, designed to highlight the strategic role of the Treasurer and spark educational, cross-discipline conversations around growth and innovation.
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