Technology and treasury, the perfect combination Steve Bullock, vice president, Kyriba NOHAFP Annual...

Technology and treasury, the perfect combination

Steve Bullock, vice president, KyribaNOHAFP Annual Idea ExchangeSeptember 21, 2015

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Technology? It’s just about process automation, right?

Automation of manual processes is the start of the journey, not the end.

How can technology improve treasury?


Add meaningful value throughout the business

Productivity

Financial controls

Global visibility

Effective financial decisions

Treasury as a strategic partner


Finan-cial Per-

for-mance

Risk Manage

mentOperational Im-provement

Business Continu-

ity

Regula-tory

Com-pliance

Drive improvements throughout the treasury process

Technology-based value drivers

It’s not just about giving you more time, it’s what you do with the time (and information).


Consolidation of positions, forecasts and exposures

Deliver confidence and accuracy for cash and liquidity projections (operational improvement)

Opportunity to optimize returns on excess cash Enables better risk management practiceso Reduced liquidity risko Reduced financial risk (better FX exposure visibility)

Increase global visibilityFinancial Perfor-mance

Risk Man-

agementOperational Improvement


Bank Fee Analysis measures pricing ‘activity’ accuracy In combination with other treasury data, can deliver: o Bank account usage vs. cost – for bank account

optimizationo Total cost of bank relationships, including trading

costs (a.k.a. total revenue banks receive from you)o Spreading around banking business more evenly

Financial Perfor-mance

Operational Im-provement

Streamline banking costs


Treasury is on the frontlineso Data securityo Protect financial assets

Best practices:o Payment controlso Outsource data security (the cloud)o SOC1 and SOC2 Audit Reportingo Monitoring and reconciliations

Opportunity to be an example to rest of the organization

Reduce exposure to cybercrime and fraud

Financial Per-formanceRisk Man-agement

Operational Im-provement

Business Con-tinuity

Regulatory Compliance


Fraud Prevention and Detection

Detection Prevention

Bank account reconciliation Sunset procedures

Application security One-time password, IP filtering

Daily reconciliation Reviewing daily bank transactions Bank fee analysis

Data security Encryption, penetration testing, audit certification

GL reconciliation Monthly true-up of bank to ledger

Bank account management Opening/closing, signatories

Task control center File and task monitoring, approval of workflow

changes

Payments Approvals, limits, automation, authentication

Audit trails Per transaction and system reporting

Financial transactions Controls, limits, settlements


Assessing the impact to the entire business of:o Basel III / LCRo SEC Money Market Fund Reformo FBAR & FATCA

Effect is more than just regulatory compliance What are the opportunities this presents for us? How can we be proactive instead of reactive?

Enhance regulation and compliance


Risk Man-

agementOperational Im-provement



Free Cash Flow often a KPI

Treasury determines liquidity and working capital needs

Creates opportunity to collaborate with other teams to affect payables, receivableso Payables Financing o Receivables financing or saleo Metrics to support inventory management


Risk Man-


Improve working capital


Treasury is key to M&A! Treasurers can help:

o Determine redundancies and cost savings in treasury / banking operations

o Measure impact on credit ratings, borrowing capacity, financial exposures, regulatory compliance

o Assess impact of currency/interest rates on price for and value of acquisition targets

o Advise on ideal capital structure and availability of financing options to finance deal


Risk Man-



Drive M&A process


Treasury can advise how to grow the businesso Treasury team structure – align financial team

structure with global needs to support businesso Market Expansion – identifying friendly markets

for tax treatment and cash movemento Cash and liquidity deployment – collaborating with tax to optimize cash

deployment/distributiono Payment strategies – Local payments, non-banking payment channels,

mobile payments

Business expansion

Financial Per-formance

Risk Man-agementOperational Im-

provementBusiness Con-

tinuity


Real-world example: Delphi Automotive


M&A Cash Management– Identify Cash Needs• Liquidity – Quickly identify and analyze available cash by region and by

currency.• Consolidation – Prepare for cash transactions or stock purchase payments.• FX Risk – Assess and mitigate risk related to payment timing through the

hedge process.• Connectivity – Visibility to new account transactions and balances through

SWIFT and FTP delivery. Improves timing and accuracy of cash position.• Acquisition cash position – Analyze new business units cash needs to

determine funding needs.

Mergers and Acquisitions


M&A Cash Management– Bank and Account Management• Bank Risk – Track and manage bank ratings for acquisition banks. Drive

decisions to maintain or migrate accounts to existing banks.• Signatories – Analyze and track new incoming accounts related to signors.

Central repository for account documentation.• Cost Reduction – Effectively analyze number of accounts and associated

fees.

Mergers and Acquisitions


Unit Sale and Discontinuing Operations– Segregation Activities• Identify Accounts – Account settings and reference tags allow timely identification of

related accounts and balances through reports. Division, Region, Business units etc.• Signatories – Identify and communicate with bank signors for closing and

transferring accounts. • Cash Consolidation – Cash Position reporting help Identify and move account

balances based on the terms of the agreement.• Regulatory Issues –Address challenges associated with moving cash from regions

with governmental restrictions.• FX and Commodity Risk – Analyze and adjust risk strategy for divested entities.

Divestitures


Unit Sale and Discontinuing Operations– Debt and Investment• Financial Instruments – Tracking of financial instruments such as Bank

Guarantees and Letters of credit linked to divesting entities.• Intercompany Loans – Identify and Analyze loans for settlement or transfer.• External Debt – Tracking and central repository for loan documentation.

Divestitures

Technology won’t take away your job.

Technology will take away the bits of your job that you don’t like as much.


Q&A

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Technology and treasury, the perfect combination

Steve Bullock, vice president, KyribaNOHAFP Annual Idea ExchangeSeptember 21, 2015

Technology and treasury, the perfect combination Steve Bullock, vice president, Kyriba NOHAFP Annual...

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