Here at CTMfile, we thought it would be a useful exercise to reflect upon the most read stories on CTMfile.com throughout the year. The top 10 most read stories reflect the sort of year it has been for treasury, with some classic themes rubbing shoulders with more cutting edge innovations. Without further ado, here's the top 10 most read stories on CTMfile in 2019:
- Instant Payments de-mystified - part 1
- HSBC reveals more detail on 'Project Iceberg'
- Nestlé and Carrefour employ blockchain to track product
- Mastercard and Global Cyber Alliance partner on cybersecurity toolkit for SMEs
- Demystifying virtual accounts - WEBchat
- 2019 Cash Forecasting Survey - 5 key insights
- KYC solutions market is horrendous: Bloomberg exit
- Kyriba acquired by Bridgepoint in $1.2bn deal
- Make your working capital work harder
- New opportunities in cash management
Getting to grips with real-time treasury
Our most read story of 2019, written by Deutsche Bank's Christof Hofmann, is the first in a series of articles from DB on instant payments and the implications for corporate treasurers. Starting by looking at how payments systems have developed over the past 120 years or so, Hofmann then dives into the world of instant payments, how they work, and what benefits they hold for both corporates and individuals. He writes that instant payments "have the potential to revolutionise the payments world by successfully meeting the demands of both private consumers and corporates. Addressing the “always on” demand, Instant Payments can be executed by individuals with ease, and around the clock, via online banking applications. Moreover, by providing merchants with information on incoming payments in real-time, they can in turn release ordered goods or services instantly – decreasing the time between an order and its delivery."
For corporates in particular, instant payments can be integrated deeper into processing and value chains, enabling businesses to react instantly to client behaviour.
"With further advances – such as request to pay, push payments, instant direct debits and point of sale solutions – Instant Payments may well revolutionise business processes as we know them today and become the most favoured payments method for both corporates and private consumers," Hoffman writes.
Further entries in this series explored what we can learn from UPI in India, a look at how instant payments set up an interactive customer experience, and how SEPA Instant is ready for corporates.
Keeping up with partner developments
Two of the biggest news stories on CTMfile this year concerned developments at a bank and a TMS provider, two essential external partners for corporate treasurers. Our second most read story of 2019 is from back in March, when HSBC revealed more details about the stand-alone digital bank it was in the process of setting up. At the time known as 'Project Iceberg', details were shared by Andy Maguire, HSBC’s group managing director and group chief operating officer at the Money 20/20 Asia conference in Singapore.
Maguire, who has stressed on previous occasions that HSBC is “not in the business of inventing technology”, said that the group has partnered with more than 100 fintech start-ups to ensure the new venture offers innovative and efficient services.
“We use them because they work in every country that we work in,” he added. “We do have pride in what we do, but we are not an invention business and we want people who have answers.”
He went on to explain that while the group has experienced success in the retail market, establishing the new business banking neobank aligned to who HSBC aimed to serve from day one. While customer experience is a priority, it plans to “deliver the best of both worlds and use existing backend structures without hindering the front end.”
Cut to the end of the year, and the Iceberg has had a sensible rebrand, and the project is now known as HSBC Kinetic. Last month the business banking app launched its beta testing phase, and the bank is encouraging SMEs to sign up as early adopters.
On the TMS side, the big news of the year was the acquisition of Kyriba by private equity firm Bridgeport in a US$1.2bn deal. Acquisitions in the TMS space are always big news for corporates, as a treasury system is usually one of the biggest budget items at play in the function, so anything that could possibly affect that relationship is watched anxiously. Since the acquisition, Kyriba has gone on to link with JP Morgan on real-time payments, having partnered with Citi in a similar way earlier in the year. The year ended on a high for the vendor when it announced it had doubled its APAC clients in 12 months.
It is not all smooth sailing in the TMS world, however, as Deloitte's 2019 Global Corporate Treasury Survey showed back in November. The survey found that almost half (47%) of treasurers report that inadequate treasury systems is their biggest challenge, up significantly from 30% in 2017.
In terms of implementing exponential technologies in treasury, the Deloitte survey found that some technologies are viewed as critical to treasury, but adoption is lagging. Approximately 70% of treasurers agree that visual analytics and robotics are important, if not critical, to treasury - and these are the two most applied technologies so far. However, the cost of ownership and the perceived complexity of implementation and maintenance of treasury systems remain a barrier to adoption of the technology. Treasurers reported that their main drivers for applying new technologies are mitigating risk (68% critical and very important driver), process automation (72%), and extensive data analysis and insights (51%).
Peer developments are always interesting for treasurers to keep up to date with, to see who is pushing processes forward and where the new benchmarks are being set. This is evident in our third most read story of the year, which reported how Nestlé and Carrefour were using blockchain to track product. The two firms used IBM’s blockchain technology to track the supply chain of Mousline, a popular brand of instant mashed potato in France. Who knew decentralised technology could be so tasty!
Treasury management essentials still crucial
With plenty of buzzwords flying around regarding the increasingly strategic nature of treasury and the new technologies that will support this, it could be easy to lose sight of some of the more traditional treasury tasks of cash and working capital management. This was not the case for CTMfile readers in 2019 though, as four of our top 10 most viewed pieces of content fit into these categories.
This point was underlined in the sixth most read story this year, where Cashforce CEO Nicolas Christiaen revealed the results of a cash forecasting survey the company had initiated with the Financial Executives Consulting Group. Given the opportunity to rank the most important issues over the next 12 months, survey respondents picked out “cash forecasting” (34%).
The Cashforce survey also highlighted how prevalent the use of spreadsheets remains in treasury. More than 9 out of 10 respondents continue to use spreadsheets for collecting/creating cash forecasts and making comparisons to actuals. Indeed, more than 9 out of 10 respondents still use spreadsheets for cash forecasting even if they have a TMS in the treasury function. It appears there will shortly be - perhaps as soon as 2020 - a collision between treasury's spreadsheet reliance and the move to real-time payments. The vendor that can fix that issue will be set up very nicely.
Kelvin Walton, CEO of TreasuryWise, addresses this point in his contribution to the top ten most read stories of 2019, with his piece on new opportunities in cash management. In the piece, Walton explains that connectivity is key.
"Today’s cash management solutions make real-time STP automation efficiency a reality; and if full STP is not required, functions such as cash position updates are available on demand," Walton wrote. "As the connectivity workflows are fully secured and standardised, the maintenance overheads and levels of operational risk are sharply reduced, so the organisation’s technology budget can be cut, perhaps sharply. The outsourced solution manages the complexities of different – perhaps many - file and message formats and of communications and security protocols. A further benefit with open APIs is that flexible workflows can be implemented, providing the opportunity to design and implement effectively customised cash management processes. Additionally, the workflows can be secured according to policy requirements, with the implementation of specific controls, segregation of duties, fraud prevention and risk analysis functions."
Virtual accounts have been an important part of the puzzle of enhancing treasury processes this year, and at number five in our 2019 top 10 is a WEB chat on this subject between Dirk Kronshage, Global Head, Collection Products at Deutsche Bank, and our very own Editor, Jack Large. The entire conversation is still available for you to listen to, where you can hear Dirk and Jack chat about the basic components of virtual accounts, where they fit in to the treasury journey, the new use cases that are emerging and key considerations when thinking of using virtual accounts.
Finally, for this section, is a piece on making working capital work harder, where Jack Large captured the top tips from a McKinsey podcast on the subject. On the podcast, Sean Brown, Strategy and Corporate Finance Practice at McKinsey, and Matt Stone, an associate partner at the firm's London office, discussed their key ideas and tips on how to improve working capital management.
Fraud and ID management ever more critical
The risk of cyber crime seems to grow every year, as new technologies that are meant to make life simpler get corrupted by criminal actors. One industry story that particularly resonated with our readers this year was a partnership between Mastercard and Global Cyber Alliance on a cyber security toolkit specifically for SMEs.
The GCA Cybersecurity Toolkit arms small business owners with basic security controls and guidance, including:
- Operational tools to help them take inventory of their cyber-related assets, create and maintain strong passwords, use multi-factor authentication, perform backups of critical data, prevent phishing and viruses, and more.
- How-to materials, such as template policies and forms, training videos, and other foundational documents they can customise for their organisations.
- Recognised best practices from leading organisations in the industry.
Elsewhere, the topic of know your customer (KYC) was big news for corporates, albeit not always for positive reasons. The CTMfile report from April on Bloomberg withdrawing from the KYC solutions market sits at number seven in our top 10 of the year.
Despite this, some positive KYC news arrived this very week, with the news that SWIFT is finally opening its KYC Registry to corporates. The go-live for corporates follows a successful testing period with 18 leading corporate groups including BMW, Spotify and Unilever which was supported by 16 global banks representing over 7,000 corporate to bank relationships on SWIFT.
Commenting on the KYC challenge and what SWIFT can bring to the table, Kristina Möller, Treasury Director at pilot corporate Spotify said: "KYC is a time-consuming process for us, and it is great that SWIFT has started this initiative which has led to good discussions with other corporates. We are also happy to see that the banking community is supporting this initiative and that we are all working towards the same goal – targeting to reduce the administrative burden of KYC. This is especially interesting for us as we continue to grow and enter complex markets, where KYC can be overwhelming."
This is a positive note on which to end our 2019 review - hopefully some of that positivity can continue into 2020, despite some of the macro economic and technological challenges that treasurers will undoubtably continue to face.
Thank you very much for reading CTMfile this year! If you think a colleague in your company or a peer from elsewhere would benefit from our weekly treasury updates, why not treat them to a (free!) Christmas present and share the sign-up link to the CTMfile newsletter with them: https://ctmfile.com/newsletter
We wish you a very happy holidays, and very best wishes for a successful 2020!
Instant Payments de-mystified – part 1
How the “new normal” in payments is starting to transform corporate treasury
HSBC reveals more detail on ‘Project Iceberg’
Plans for a stand-alone digital bank aimed at SMEs to counter competition from online rivals were first revealed last September.
Nestlé and Carrefour employ blockchain to track product
The Swiss food giant and the French supermarket chain will track the supply chain of popular mashed potato brand Mousline.