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Journeys to Treasury 2017- Resilience, Adaptabilityand Innovation

N ow in its second year, industry partners BNP Paribas, SAP, PwC and theEACT are proud to unveil the new edition of the Journeys to Treasuryreport at this year’s EuroFinance Conference. The 2016 edition was

quickly established as an authoritative, thought-provoking and inspiring report inshaping the treasury profession of the future, and the 2017 edition promises asimilar response. Now that the Journeys to Treasury concept has been established,we have been able to engage treasurers more directly in the development of the2017 report compared with 2016. During the EACT Summit held in La Hulpe,Belgium in March 2017, we held an interactive session with event participantswhich has been instrumental in identifying key themes and treasury priorities.

By Jan Dirk van Beusekom,Executive Director, Advisory,Strategic Marketing &Engagement, CashManagement, BNP Paribas

Corporations,technology

vendors, banks,consultancies,governments andregulators need towork together toshare experiencesand best practices… to stay ahead offraudsters andkeep their

organisationssafe.

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Changing prioritiesIn 2016, the major focus areas of Journeysto Treasury were i) continued innovation(including discussions aroundblockchain, fintechs and big data), ii)‘anytime, anywhere’ treasury (includingthe impact of mobile banking and real-time payments on treasury) and iii)cybercrime and fraud. A year later,cybercrime and fraud continues to be apriority for every treasury globally, andtherefore remains a key theme of thisyear’s Journeys to Treasury report, whilethe other priorities have evolved to someextent. While innovation continues to becentral to the evolving treasuryexperience, the focus has shifted. Forexample, blockchain has the potential totransform many activities related to cashand trade, but its impact is likely to be feltin the medium rather than short term.However, there are growingopportunities in big data, artificialintelligence and machine learning and assuch, we have identified data analytics asa key theme for 2017. Finally, treasurersindicated that although flexibility andadaptability was crucial to respond tochanging market conditions, this is just asimportant in order to comply withchanging regulations, particularly in aninternational context.

Journeys to Treasury 2017: Key themes

Data analytics: From data toinformation ‘Big data’ is not yet high on manytreasurers’ agenda, but everyorganisation acquires a huge volume ofdata available on a continuous basis,both directly and through third-partypartners, such as banks, technologyvendors and consultancies. Artificialintelligence (AI) and machine learningare increasingly being used to processand analyse large volumes of data quicklyand objectively, with companies in manyindustries now employing highlysophisticated consumer analytics.

This trend is now emerging in treasury,so the question for treasurers is how toturn ‘big data’ into actionable

information to help inform decision-making and refine processes. This will bemanifested in different ways dependingon an organisation’s treasury challengesand priorities, but there is particularvalue in areas such as cash flowforecasting where timeliness, accuracyand completeness of data continue topose difficulties. Similarly, a growingnumber of treasurers are automatingroutine activities such as FX funding andhedging and daily cash investment.

Regulation, compliance andadapting to changeThe regulatory environment continues tochange, and given their internationalrole, treasurers need to understand andcomply with diverse regulations acrosstheir footprint. Not only is the regulatoryburden increasing, but the financial andreputational consequences of non-compliance continue to grow.

Some of these new regulations arespecific to treasury, with reporting, policyor hedging implications, but others, suchas Base Erosion and Profit Shifting (BEPS)have important ramifications onorganisational structures. Similarly,complying with new rules such as theEU’s General Data Protection Regulation(GDPR) requires considerablecollaboration and alignment with otherparts of the business. A wide variety oftreasury responsibilities will be impactedby GDPR, including:

� Bank account reconciliation:Customer data used for identifyingand reconciling incoming payments;

� Bank account management: Personaldata of authorised signatories;

� Payment factories: Vendorinformation, including addresses,individual and company data andbank account details;

� Payroll: Employee informationincluding identity, salary and bankaccount details.

In these, and other areas, treasurers willneed to consider how this data is held,maintained and transmitted both withinand outside the organisation.

New regulations are not always

The question fortreasurers is howto turn ‘big data’into actionableinformation tohelp inform

decision-makingand refineprocesses.

Three tips on data analytics

1) What data do you have availabletoday, and where are the gaps?

2) What are your key challenges intreasury, and what are your successcriteria in addressing them?

3) How can banks, consultants andtechnology vendors help to extract,manage, present and leverage datato meet these challenges?

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intended to be restrictive, however, andthe second payments services directive(PSD2) which takes effect in January 2018is intended to inspire new methods, andnew players, to make payments andaccess bank services. New technologies,such as open APIs (applicationprogramming interfaces) are likely toemerge, but treasurers need to considerthe scalability, robustness and security ofnew processes and technologies.

Cybersecurity and fraud:changing risks in a digital worldSecuring company financial andinformation assets is a responsibility forevery business function, but thisresponsibility is particularly acute intreasury given the size of transactions andsensitivity of data. Furthermore, thefinancial – as well as reputational –implications of fraud are very real.According to PwC’s The Global State ofInformation Security® Survey 2017, 79% ofrespondents suffered direct financiallosses as a result of a breach, of which20% were between $250,000 - $1m and16% of more than €1m.

While cybersecurity threats often havethe highest profile, internally andexternally-initiated fraud often relies onweakness of individuals and processes,rather than hacking into systems.According to PwC’s The Global State ofInformation Security® survey 2017, themain reasons for fraud were inadvertenthuman error, lack of staff awareness ofsecurity risks, failure to follow processesand external attacks specifically targetingan organisation.

Treasurers need to engage closely withthe company’s information securityteams, familiarise themselves withcompany-wide security strategies andensure that training, processes andsystems used in treasury are consistentwith these strategies and reflect thespecific risks in treasury. In many cases,the threat is not an IT problem, but ahuman one, with social engineering orphishing (55%), malware(49%) andhuman error (45%) the most commontypes of breach according to the surveyabove, so training and awareness ofchanging security threats is essential.

As fraudsters become increasinglysophisticated in their approach toinfiltrating systems and organisations,

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Jan Dirk van Beusekom

Executive Director, Advisory, Strategic Marketing &Engagement, Cash Management, BNP Paribas

Jan Dirk has over 25 years’ experience in cash, treasury andrisk management, people management and training. Hestarted his career with Avery Dennison at their EuropeanTreasury Centre as European Cash Manager, followed by aposition as Assistant Treasurer with Hagemeyer N.V. bothin The Netherlands. In 1997, he switched to consultancy andbanking as Financial Consultant with MeesPierson, at the time a boutique merchant bank.

In 2001, he moved with his family to Belgium to start the first eCommerce departmentwithin Fortis Bank. In 2004 Jan Dirk became responsible for the European expansion ofcash management and created and led the European Sales organisation. The followingstep was the creation of the Financial Supply Chain Management team, a combination oftrade, trust, factoring, supply chain finance and cash management.

Currently Jan Dirk is executive director Client Advisory, Strategic Marketing andEngagement of the Cash Management Competence Center, BNP Paribas Group. He has anMSc in Financial Economics from the University of Groningen (NL-1991) and an MBA inTreasury Management from the Free University of Amsterdam (NL-2000).

Cybercrime andfraud continues tobe a priority forevery treasuryglobally… thereare growing

opportunities inbig data, artificialintelligence andmachine learning

Three tips on cybersecurity and fraud

1. Individual employees are anorganisation’s weakest link, somandatory regular training onchanging threats and instilling asecurity culture is essential.

2. Develop and communicate anincident plan and test it regularlywith simulations. This is valuable inhighlighting weaknesses inprocesses and controls and helpingemployees what to look out for andhow to react.

3. Work closely with internalinformation security teams andexternal experts to ensure thatcompany directives and industrybest practices are implemented intreasury.

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through hacking, social engineering andexploiting weaknesses in processes andcontrols, corporations, technologyvendors, banks, consultancies,governments and regulators need to worktogether to share experiences and bestpractices on the controls, processes andsystems that will allow them to stay aheadof fraudsters and keep their organisationssafe. It is also vital to have clear actionplans in case of suspected or detectedbreach in order to minimise the impact.This is often difficult in practice given thatindividuals are often reluctant to exposemistakes, a reluctance which requires ashift in mind-set and culture to overcomeit and act quickly.

Accompanying you on thetreasury journeyJourneys to Treasury is not an isolatedreport, but an ongoing investigation,analysis and vision of the challenges,opportunities and ambitions of treasurers.While regulatory compliance andprotecting the business from fraud isdominating the agenda for manytreasurers in 2017, the role of innovativetechnology and data-driven insights willcontinue to grow, with the potential totransform treasury processes, create newways of engaging with internal andexternal stakeholders and drive betterdecisions. �

DATA ANALYTICS: HOW TO GIVE MEANING TO YOUR BIG DATA?

CYBERSECURITY: HOW TO MANAGE AUGMENTED RISK IN A DIGITAL WORLD?

REGULATION, COMPLIANCE AND GEOPOLITICS: HOW TO STAY AHEAD OF THE GAME?

www.journeystotreasury.com

Striving for the summits of treasury with BNP PARIBAS - EACT - PwC - SAP

JOURNEYS TOTREASURY

To access the full 2017 Journeys to Treasury report and contribute tothe 2018 edition, please visit www.journeystotreasury.com.

Three tips on regulationsand compliance

1) Engage both individually andcollectively to ensure that thecorporate treasury voice is heardin shaping regulations;

2) Maintain current knowledge ofnew and forthcoming regulations,including engaging staff acrossdepartments, includinginformation security, tax andlegal;

3) Review and refine governancestructures and risk policyframeworks regularly to ensureregulatory compliance andflexibility to respond quickly tochanging market conditions.

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