Working in the Treasury Industry - Why You Should Seriously Consider Joining The “Dark” Side, And It’s Not Just About The Money
“So, what do you do for a living?” This is a very simple question that I get during off-work events and casual gatherings.
And being a polite person, I usually give a short answer. “Oh Hi, I am working in the Treasury Industry.”
Unless, I happened to be speaking to one of the few hundred professionals in the Treasury Industry in Singapore, my simple answer usually elicit a “What the ???” look from the other person/s. And if I so desire to end the unpleasant conversation/encounter with the person this reply usually works well. Of course, like my Treasury peers who usually are jovial and sociable, I offer my short explanation about the Treasury Industry and its important contribution to the world and society.
So, what is the Treasury Industry?
Merriam-Webster’s defines treasury /ˈtrɛʒəri/ as,
1 : the place where the money of a government, club, etc., is kept
2 : a place in a church, castle, palace, etc., where money and valuable objects are kept
3 : a group of valuable things that are related in some way
These days, when you can mine virtual currencies by solving complex algorithms online, Webster’s definition of Treasury is kind of antiquated. Delete the image of a well-dressed executive working in a vault-like environment surrounded by piles of cash and tons of precious metals. Working environment in a typical Treasury industry setup can be quite normal, it looks like most other offices albeit a little more screens and sometimes a little more temper. In fact, in my decade long career in the industry (from banks to corporates), I have never seen more physical cash than the new notes delivered by the HR department for the yearly ang pao money exchange service which is meant to be a staff benefit. And that money cart is roughly about SGD 50,000 in a variety of $2, $10 and $50 notes wheeled around by the HR staff armed with his/her pen. No shotgun toting guards.
In general, the Treasury Industry offers Treasury Management or Operations solutions to Governments, Banks, Corporates, Private or Public Institutions. And usually, Treasury departments are found in large setups like Government offices, Banks, MNCs and large corporations, but it can be found in smaller corporates or setups. In the U.S.A, their Department of Treasury is the equivalent of a Ministry of Finance in other countries. And so, yes, Treasury is important!
Buy vs Sell side, welcome to the dark side.
It is common to hear the industry jargon of classifying the Treasury Industry as the “Buy” or “Sell” side. Banks, Vendors and any setups that try to sells their Treasury Management products and services can be grouped as the Sell side. The Buy side is the one who pays for the products and services and these can be corporations, private or public institutions and even Banks who pays other Banks for certain services and products.
Normally, in comparison to the Buy side, the level of sophistication is higher in the Sell side and their Treasury setups are usually larger, with some offering employment to hundreds of people supporting the Treasury businesses. In a typical global Bank’s Treasury Department setup, you can find the Global Markets Desks offering access and products in Foreign Exchange (FX), Fixed Income (FI), Money Market (MM), Commodities and Equities; Structured Solutions Desks offering complex financial structures to standard trade solutions or Cash Management Desks offering Cashpooling setups and advisory to their clients. The level of sophistication and range of products a Bank can offer is often correlated to its presence and its market share in the particular country. i.e global banks like Citi tend to be well staffed, offer a wider range of products and offers more coverage across different countries than regional banks like CIMB.
The Treasury setups in the Buy side are usually much smaller than the Sell side and are usually very focused in their mandates and operations. There are some setups that can rival a Bank, like those in some Sovereign Wealth Funds (SWF), top global Multi-National Corporations (MNCs) and other institutions, but most Buy side setups are lean. And in Singapore, due to our financial hub status and EDB’s initiatives, many MNCs setup satellite offices here and with their main Treasury offices located in their Head Office. In Singapore, there are about roughly more than 100 Treasury Centres setup by corporations and they can be a 3 men team to a setup of 100 people. Normally, these Treasury setups focus on managing the FX risks, Cash Management, Treasury Risks Control, Compliance and Back Office operations. There are some that cover more niche areas like Merger & Acquisitions, Funding, Debt Capital Markets and Commodities Trading that are typically found in the Sell side.
Why work in the Treasury Industry?
According to the Ministry of Manpower 2014 data, the Median Monthly Gross Wage of a Treasury Manager (depending on its industry) ranges from SGD 8,008 to 9,292 which is a pretty comfortable salary bracket. The higher than average compensation brings along a job scope that can be demanding and stressful which might not suit all people. The typical educational background of a Treasury Manager is a University Graduate in Finance, Accounting, Business and Economics, although there are some well-known senior Treasurers with degrees in Philosophy or Engineering.
Gaining entry into the Treasury Industry is not easy, there are many applicants for an opening and for fresh graduates - the competition is even larger. That said there are other ways of finding your way into the Treasury Industry, for example Banks, SWFs and Big MNCs offer Management Trainees positions. These positions usually allow successful applicants to be rotated in the different functions and departments within the organization. And the Treasury Department is usually one of the different job functions that such Management Trainee can be assigned to or rotated to thereafter.
Working life in the Treasury Industry is not known to be slow and routine. The pace largely depends on the individual setup; usually life can be hectic in a large Bank setup compared to a small Treasury satellite office of a MNC and the particular function that one is responsible for; a FX dealer will be required to watch the markets closely than a Cash Manager who is responsible for the operations cashflow and bank account setup. Lately, the role of the Treasury Department are getting more attention from the Senior Management and are more involved in strategic planning and important decision making process. Usually, the Treasury Department offers a much wider and rounder scope than just Finance or Accounting alone, normally issues are multi-faceted and multi-disciplinary. Life is never boring in the Treasury Industry!
With this short write-up, I hope you have a better idea of what is the Treasury Industry and if you ever come across a guy who tells you that “I work in the Treasury Industry”, feel free to tell him that you have read my article and that his little party trick to end the conversation is not going to work.