People, Treasury

Challenges of the modern Corporate Treasurer

July 28, 2017

Treasury Today Interview and Podcast

Recently, I was interviewed by Treasury Today about the differences between the role of corporate treasury then and now. The good folks at Treasury Today compiled my inputs together with 2 other Corporate Treasurers, Sonia Clifton-Bligh (Johnson & Johnson) and Jinny Goh (SMRT Corporation).

You can find the write up and podcast here.

For the sake of our readers here, I will share some of the excerpts and add further comments.

Challenges of the modern Corporate Treasurer

What are the required skills of the modern treasury professional?

When we were asked on the required skills of the modern treasury professional, my fellow panel and myself gave a list of skills such as technical proficiency, risk management, financial literacy and key attributes like being analytical, good communicator, flexibility and creativity.

Sonia: Technical proficiency is crucial. This really underpins any treasury professional’s ability to add value to the organisation. On top of this, it is also important to have knowledge around risk management strategies, financial techniques and products and financial analysis.

Seng Ti: We need to be analytical and good with numbers. Increasingly we also need to be creative and willing to experiment with new products. This relates to the need to be adaptable, especially as markets evolve.

Jinny:The modern treasury professional needs to be a good communicator. We need to have a continuous dialogue with the business units to understand their pain points and ensure we support them effectively. This is crucial to ensure that the corporate treasury department stays relevant within the wider organisation.

How have the role of corporate treasury changed over the years?

And when we were probed on the difference between the requirements of a Corporate Treasurer between then and now,  it is interesting to note that all of us agreed that the role has evolved over the years. Most importantly, the role of the Corporate Treasurer has shifted from a relatively operational position to a more strategic one.

Sonia: Ten years ago the role of the treasurer was more operational in nature, responding to the outcomes of business transactions. Most of the work was conducted in the background, ensuring that the bills were paid, collections were banked and that the operations were funded with any excess cash investment securely.

Today the treasury has taken on a more strategic role as a partner to the business. Part of this is a consequence of the global financial crisis, which really required treasury professionals to apply their skills and knowledge to proactively assess and address risks across the breadth of the business.

Jinny: The essential skills have not changed too much, but market events in recent years have made the treasury function more important within the organisation. This has driven a change in how treasury departments are structured, giving rise to consolidation, centralisation and the increased automation of treasury activities.

Seng Ti: Before the financial crisis the treasury was not a key department in many organisations. This has changed, today we have the ear of the C-Suite who have recognised the value we can add. As a result, our views are more valued than they were in the past.

Be Ready to Embrace Technology 

Change is the only constant. We will need to adapt and improve, innovate and create. Technology has changed how things work, improve the processes and drive organisational behaviour. All of us agree and we cannot further emphasise the importance of being Tech savvy.

Sonia: Yes, this evolution is continuing and treasury is becoming a value creator. This is where treasury teams deliver strategies that extend beyond simply preserving the balance sheet and instead craft strategies to optimise it.

Another challenge will come from data. We have access to great volumes of data and filtering what is relevant and converting that data into meaningful information is a challenge. If solved though it can offer the business a competitive advantage.

Jinny: I believe the evolution will continue, but I do not foresee dramatic changes. Treasurers still need to manage the cash, the liquidity, the funding and mitigate financial risk. The question we need to ask is: ‘how do we do it better?’

The use of technology, big data and analytics will be important in answering this question. Indeed, these technologies are already going a long way in helping us be better in our roles. At the same time though, this opens a whole new work of risk that we must manage.

Seng Ti: I think technology, and understanding what it can do for you, is a big challenge that treasurers must tackle. There are a lot of disruption in the market at present and everybody wants to be a part of the fintech wave. As a treasurer, I think that the key is to understand this technology and how we can use it to enhance what we are doing and better support the organisation.

Political winds are also changing and there seems to be an increasing trend towards protectionism. This may manifest itself in more stringent requirements before we can bring funds out or bring funds into certain markets. We have already seen this in countries such as Malaysia when the central bank imposed currency controls overnight. In times like these, treasurers must adapt quickly.

Corporate Treasury is a multi-disciplinary, multi-faceted role today

It feels as if we had a prior discussion and arrived at a set of similar conclusion, all of us think that the only way to prepare oneself for the future role in the Corporate Treasury are; to be open minded, creative, embrace and adopt new technology, stay connected to the corporate treasury community, be multi disciplinary and multi faceted.

Jinny: There is no one answer to this, we all have different aspirations and are at different stages of our careers. But something we can all do is build our skill sets to develop new ways to add value to the organisation.

Joining the treasury community like the ACTS is also useful. It allows you to meet like-minded treasury professionals, stay abreast of the latest trends and learn from each other.

Sonia: Driving innovation is a skill set and part of the role of the treasurer today. We must, therefore, develop and foster innovative behaviour within our departments.

One of the ways we can develop innovative behaviour is by changing the way we think about things. Treasury, as an industry, can sometimes be reductive and dismiss new ideas when they arise. This is something that we really need to change. By doing so we can become expansive thinkers, who keep an open mind, allowing an idea to mature before we decide to dismiss it. Staying curious is a big part of this and being able to see the possibilities and envision a better future.

Seng Ti: Corporate Treasurers might need to be a political scientist to better understand the political headwinds and adapt fast to changing landscapes. It might be useful to think like a fintech startup, learn a little about programming and new technology to understand what it can bring to the table. It is crucial for us to remain open and flexible to new ideas;  adapt to changing ecosystem of banks, clients and financial markets and anticipate changes to political and regulatory landscapes.

Through this interview, i feel good about our mission in creating tfageeks.

It is just an imperative to Ask|Share|Connect. What do you think?

about author

Seng Ti is currently heading FP&A, Treasury, Accounting and HR teams in a MNC and is serving as the President of the Association of Corporate Treasury (Singapore) aka ACTS. He enjoys reading and discussing about current affairs, politics, life, wine and lives a normal life with his wife and 2 young kids.