Building Bridges to the Data Prize
By Eleanor Hill, Editor
The world over, treasurers are seeking improved visibility and control over their data. After all, data is the lifeblood that drives corporate treasury success. Martin Bellin, Founder and CEO, BELLIN, believes that having a tool capable of aggregating that data “has exponential utility”. Is he right, and more to the point, does it really exist? In this executive interview, he explains his treasury worldview, talking freely of bridging the gap between corporations and the services they need.
Eleanor Hill, Editor, TMI (EH): Do you agree that treasurers are now truly ‘strategic players’ and, if so, how does that translate in today’s operating environment?
Martin Bellin (MB): Treasury’s role is undoubtedly becoming more significant as twin forces work together: liquidity management is rising in importance as markets become increasingly volatile; and at the same time, corporates are seeking to become more bank-agnostic. Over the past years, CFOs have learnt that there is a function within their organisations that can deliver on these demands – and more: treasury. As the collector and controller of financial information about the future of the company, even M&As and carve-outs, treasury’s promotion into the strategic heart of the finance department was perhaps inevitable.
Technology is part of that story and is playing a pivotal role in shaping the overall finance function. Routine accounting work can, and will, be automated. And while there are repetitive aspects of treasury that machines will perform more and more, treasury will always require strategic thinkers to anticipate the future. Being a great treasurer requires intuition and opinion as part of a wise decision-making process.
Of course, well-informed decisions also require the assimilation of vast pools of information. This is why, compared with other finance functions such as accounting, treasury is increasingly visible. In fact, treasury is a data gold mine.
EH: Given the potential of technology to aid treasury – not just in mining data for insights – where do you think most departments are in their journey, realistically speaking?
MB: Talking to treasurers at conferences about the latest ‘buzzword’ innovations – notably blockchain and AI – it seems most have an opinion and many ask how these ideas may be applied to treasury. But the vast majority of treasurers who are at the coalface every day are still tackling fundamental challenges. They have neither full visibility nor transparency over their cash and accounts; having that is still state-of-the art for them.
As a provider, BELLIN not only helps sophisticated treasury functions to realise their ambitions through delivering the cutting-edge technologies, we also help departments which are not as far along in their journeys, to raise them out of their sub-optimal reality.
EH: With so many innovative technologies on offer, how can treasurers choose between them to enable the construction of a cohesive treasury landscape? And should they have to choose between them, or should there be a one-stop-shop?
MB: At the risk of sounding like a salesman, BELLIN’S role as a technology platform provider is to take away the client’s complexity, enabling them to choose whatever they need in their particular business environment, and have it conveniently accessible in one place. We become the conduit between all the market offerings and the corporate.
As an example, a few years ago, SWIFT was seen by many corporates as too expensive, complex and cumbersome; it was for the largest firms only. We presented the possibility of including it in our application. Now, when we offer payments ability to clients, we have no need even to mention that SWIFT is behind it. It no longer matters to clients what technology is facilitating their payments, as long as they can set up an instruction as they wish, push the button and send it securely, reliably and transparently from any location to any bank in the world.
If a corporate is looking to deploy a number of systems side-by-side, the most common error is to establish the wrong ‘entry point’ for all of these systems – by setting them up separately – and not looking for a one-stop-shop alternative. Treasury ecosystems subject to this basic mistake can become over-wrought, and this is something we see even in treasury functions that are considered to be relatively sophisticated.
It is typical for a corporate to maintain about 30 bank relationships worldwide. Most will have a central operation maintaining, say, eight core banks. A well-organised treasury will have implemented a single solution – the entry point – to connect to those eight. The remaining banks, used by de-centralised operations, however, still need to be connected via web-based platforms, each with their own tokens and user-interfaces. These are not part of the treasurer’s single-view. The number of systems required to support this complexity rises accordingly, as does the risk.
But current technology can remove that complexity; currently-available solutions can easily and quickly remove up to 80% of a corporate’s applications. So, technology that is available to use today can achieve many of the goals that treasurers are still thinking will be reachable only in nine or ten years’ time. It really is that simple.
EH: Playing devil’s advocate though, does having such a concentrated exposure to one system increase cyber risk? How do you ensure the highest levels of single-platform security?
MB: IT security is no more in the scope of the expertise of corporate treasuries than treasury technology is of internal IT. But both are core parts of our business; we cannot afford to let clients down. As a demonstration of our capability, we look after the treasury needs of a data centre provider using our platform, not theirs. Even though the client has its own secure cloud environment, by outsourcing its entire treasury platform, processes, and security, the client is mitigating concerns of internal fraud. This also removes the risk of running up against a lack of treasury system expertise in its in-house IT function, and indeed the intense resource-pressure that this function commonly faces.
The internal IT point matters because if something happens, treasury’s strategic importance means that it needs real-time action. At BELLIN, we have a dedicated specialist team available 24/7 to ensure our clients’ system availability. We now even have a mobile security app to enable treasurers to identify and authenticate themselves when logging into the platform; the same two-factor security measures could, for example, be used to sign payments. Each time a payment needs approval, the system could send a notification to the user’s mobile phone requesting verification that it is truly them taking the action. As sensible as this sounds, the misguided belief that mobile phones are not secure, prevents many corporates from using their company or personal devices as part of their security regime, which is a shame.
EH: On the topic of payments, are SWIFT gpi and Ripple still jockeying for position? And are they making a tangible difference for treasurers yet?
MB: For treasurers seeking to remove complexity, decisions will be based around whether these products make their life easier. The core issues for them are speed and cost of payment. If a product ticks both boxes and operates faultlessly, then few will have a preference as to which system is facilitating that payment. Ripple is good for SWIFT – and thus treasurers – in that its creativity and competitive spirit is forcing market responsiveness.
That said, for corporates, there is a huge amount of internal headroom available, without looking at all these new solutions. If they intelligently leverage what options are available like BELLIN tm5, they could free up a lot of money. I’m concerned that the hype around innovations is driving out possibilities that are at hand right now – whether that be clever ways to process international payments as domestic payments instead, or solutions such as multilateral netting. So, I would personally encourage a ‘back-to-basics’ approach before jumping on the innovation bandwagon.