A Technology Transformation in the Middle East
In the last edition of TMI (edition 244), we featured an edited transcript of the first part of a roundtable held in Dubai in April 2016, kindly hosted by D+H, chaired by Jags KothandaPani, Citi, which focused on the changing challenges, priorities and role of corporate treasurers in the Middle East (click here to read the article). In the second part of the same roundtable, the panel discuss the role of technology in facilitating corporate treasurers’ objectives in more detail. Edited by Helen Sanders.
With the conference season approaching, most notably Sibos (September), EuroFinance and the AFP Annual Conference (both in October) this topic is particularly timely. In particular, banks, technology vendors and infrastructure providers are considering areas in which emerging technologies, such as blockchain, and solution offerings from the fintech community, can deliver value to corporate treasurers. This is far less straightforward than glossy brochures and slick presentations would appear. Treasurers are already highly technology-literate in many cases, and are quick to see potential value of tools that solve existing problems or create new opportunities. However, they also recognise that introducing new technology brings costs and risks, which may outweigh the benefit. Furthermore, prioritising these projects can be difficult, particularly with stretched IT departments, and during periods of volatility and change.
In the Middle East, the focus of treasury technology projects, whether supported by banks and/ or vendors, is less on smaller, tactical tools than implementing stable, robust platforms that support efficient, integrated cash and treasury processes, provide greater security and control, and offer transparency and richness of data to facilitate decision-making and automation.
Jags KothandaPani, Citi
One of the points we touched on in the first part of this discussion was treasury technology. While some companies are investing in treasury management systems (TMS), we still receive manual instructions. In what areas do you still see technology playing a role and improving efficiency and automation?
Adam Boukadida, Etihad Airways
We aim to automate our end-to-end treasury lifecycle as far as possible, from financial market execution that’s done electronically through to transaction management and confirmations and payment via SWIFT. From an operational point of view therefore, we are only managing exceptions. Some countries in which we operate are not SWIFT- enabled, so we have to use manual payment methods, but we try and avoid this wherever possible. We have also integrated our treasury management system (TMS) with our ERP, and last year implemented an automated supply chain finance programme with both a regional and international bank. So for us, technology is an enabler, and helps with controls and segregation of duties. In addition to reducing operational risk, automation enables us to free up people to plan and deliver on our 36-month treasury roadmap.
James Adams, Chalhoub Group
We use a TMS integrated with an online dealing platform; we are also looking to enhance integration with our ERP. One area of focus from a technology and process standpoint is payments. As each company in our Group grew in a decentralised way, payment systems had become quite fragmented. We are therefore considering an electronic payments process, potentially via a central shared service centre. This level of change takes time though, particularly in a family-owned business.
I understand you’ve also implemented an in-house bank: how have you managed the organisational impact, people change management etc.?