Turning up the Heat: Treasury Transformation in Mexico
By Eleanor Hill, Editor
Mexico is now seen as a regional and global fintech hub with high growth potential. As the country embraces digital innovation, especially in the financial sector, treasury management is also poised to make a leap forward.
Mexico now boasts one of the strongest fintech ecosystems in Latin America and is rapidly being recognised as a hotbed of digital innovation. HSBC’s recent Global Liquidity and Cash Management Forum, held in Mexico City, told the story of digital evolution in the country. The event not only highlighted the ways in which the Fourth Industrial Revolution, or Industry 4.0, is driving widespread changes to existing business models, but also how this is leading to a new era in treasury management: Treasury 4.0.
Dr Othon Moreno
Carlos González Fillad
In his introductory remarks, Juan Carlos Perez Rocha, DGA Country Head, Commercial Banking, HSBC, noted how technological innovations have helped improve the performance of corporate treasuries in Mexico. As technology and services have been advancing, data is becoming increasingly important. This is opening up new opportunities for digital-savvy treasurers.
Following Rocha’s introduction, Lance Kawaguchi, Managing Director, Global Head – Corporates, Global Liquidity and Cash Management, HSBC, took to the stage to underline the key elements of Industry 4.0 and what treasurers need to be aware of. As well as exploring the transition from Industry 4.0 to Treasury 4.0, Kawaguchi also noted that the momentum behind Industry 4.0 has the potential to be used as a force for good. Digitisation, for example, opens up huge sustainability opportunities, he said.
The point was made that businesses need to have corporate values that go beyond looking after the interests of shareholders. They must take responsibility for other stakeholders, too: their customers, employees, suppliers and communities. For treasury leaders, part of that means looking after the wellbeing of their teams – freeing them up from repetitive manual tasks and helping them to be more productive and strategic – and technology plays an important role in achieving this.
Redefining the treasury lines
Thomas Halpin, Managing Director, Global Head of Payments Product Management, Global Liquidity and Cash Management, HSBC, then picked up the theme of innovation and what is possible for treasury in the Industry 4.0 world. Halpin spoke about fintech collaborations and the importance of mining data in a new digital world. He then went on to talk about payments innovations – from real-time payments, which are already live in Mexico, to SWIFT’s global payments innovation (gpi) initiative.
“A great advantage of SWIFT gpi is the ability to track cross-border payments end-to-end,” Halpin commented. HSBC is not just investing in industry-wide payments innovations, however. “We are innovating alongside SWIFT gpi, because our vision is not just to deliver payments tracking through our portal but to also have a payments alert capacity for corporates in the future.”
HSBC is also redesigning its payments architecture. Halpin explained how the bank is investing in cloud-based solutions and creating ‘microservice packages’. This infrastructure will enable the bank to innovate more swiftly and provide corporates with a more holistic HSBC experience. When a client purchases a service, the idea is that the customer experience is scalable across multiple markets. These ‘microservices’ can be applied to mobile payments, collections, and accounts receivable, he explained.
Halpin also spoke about how open application programming interfaces (APIs) in financial services are empowering multi-banked corporates to view data via a single portal. Regulations have helped in this regard, he explained, with PSD2 in Europe and Open Banking in the UK frequently cited as examples of this trend. Halpin pointed out that similar regulatory change is also being seen in other parts of the world, such as in Bahrain, Australia, and in some parts of Asia.
Wrapping up his presentation, Halpin emphasised how important it is to apply new technologies to a specific challenge, rather than deploying technology for technology’s sake.
Industry 4.0 Best Practices
Víctor González, Global SSC Finance Director at Kodak Alaris, then shared his corporate perspective on building an optimal treasury structure; and how it takes not only technology but also people.
Kodak Alaris has a centralised finance function that is based in Guadalajara, Mexico, he explained. “This is the headquarters for a number of the company’s financial functions, including accounts payable, travel and entertainment (T&E), treasury, trading, and collections. General ledger and accounting requirements for more than 27 countries, as well as controllership functions, are also handled from Guadalajara – using a single set of standards.”
The Guadalajara office manages financial services for 15 European countries, seven in the Asia-Pacific region and five countries in the Americas. González said that when it comes to hiring, the company looks for people with a global vision. “Of course, we want to hire talented people, but we also want people who will embody the culture of the company and help us to improve the organisation,” he explained.