Risk ManagementTechnology
August 27, 2020

Blockchain’s Increasing Popularity Raises Internal Control Issues

Applying the COSO framework addresses risks but raises some new ones. Despite its mysterious origins, distributed ledger technology (DLT) is increasingly viewed by companies as vital to remain competitive. From an internal control (IC) standpoint, the technology has significant potential to reduce risk and improve efficiency but also introduces new risks, prompting a recently published report on how to apply the leading IC framework when adopting DLT, also referred to as blockchain. “We wanted to put this guidance out there…
BankingCapital MarketsInvestment Management
August 27, 2020

Ripple Effects: Will Institutional MMFs Start Waiving Fees to Stay Above Water?

Rock-bottom rates have pushed retail money funds to waive fees, and institutional funds may be next.The Wall Street Journal this week gave prominent play to a story headlined “Money Funds Waive Charges to Keep Yields From Falling Below Zero.” That piqued our interest. Money market funds (MMFs) are a staple of many treasury investment managers and an important product for many of the banks that help corporates manage short-term cash.MMF yields have plummeted. Seven-day net yields for the average money…
BankingLibor SOFR
August 25, 2020

Leaving Libor in the Dust: Look for SOFR Loans in Early 2021

Banks could price corporate loans using SOFR sooner than ARRC best practices suggest. The Alternative Reference Rates Committee (ARRC) guiding the US transition for cash products is pushing for Libor pricing to cease for certain types of debt by the end of this year, and other types of debt may soon follow. Floating-rate notes, for example, should be priced by year-end using an alternative benchmark, according to best practices published in late May by the ARRC, which comprises mostly large banks…
TaxTechnology
August 25, 2020

Saving Time in Brazil: Automating Tax Payments Speeds Product Delivery

A fintech helps a corporate cut hours on tax payments, allowing faster delivery and freeing up staff.  The first thing a treasury professional learns about business realities in Brazil is that there are a lot of taxes and they take many hours to process. The space is ripe for disruption, and a fintech called Dootax is doing just that.   At a recent meeting of NeuGroup’s LatAm Treasury Peer Group, a member from a megacap multinational shared the progress of…
BankingTreasury Management
August 25, 2020

Waiting Game: Fed’s Update on Dividend Regs Reflects Increased Back-and-Forth With Banks

Earnings hold the key to whether a bank qualifies for “expedited consultation” with regulators. Recent clarification by the Federal Reserve about the timing of regulatory reviews of dividends paid by banks has raised a few questions and concerns for members of NeuGroup’s Bank Treasurers’ Peer Group.  Even before the guidance, banks have delayed or considered delaying their dividend declaration dates to provide more time for back-and-forth with regulators over the payout. Experience suggests that approaching the Fed with a concrete plan…
Cash & Working CapitalTechnology
August 20, 2020

Smart Move: Deploying Artificial Intelligence to Manage Cash as Inventory

A member’s quest to improve cash visibility begins to bear fruit just as the crisis hits. “When there is a crisis, treasury becomes very important,” a member of the European Treasury Peer Group said at a recent meeting where he and a colleague shared their progress on a project to improve cash forecasting, in part by viewing cash as inventory to be optimized. Cash forecasting, a critical concern for treasury teams at all times, is especially important amid the extreme…
Cash & Working CapitalRisk Management
August 20, 2020

Balancing Act: The Realities of Working Capital Management

NeuGroup members and C2FO discuss the Fed, credit risk and negative cash conversion cycles. Working capital management has taken on increased significance during the pandemic, and two members of NeuGroup’s Tech20 Treasurers’ Peer Group discussed the subject with an executive from C2FO at a NeuGroup Virtual Interactive Session this week. Here are some takeaways from the session by NeuGroup founder and CEO Joseph Neu. The growing importance of data. C2FO’s platform is a great way to use working capital efficiently…
Cash & Working CapitalCOVID-19Treasury Management
August 20, 2020

Finance Teams Kept More Hands on Deck in Q2 to Navigate Rough Waters

The pandemic is taking a toll on working capital, leading to more rationing of cash, an FEI survey says. Far fewer finance teams planned on cutting headcount in the second quarter of 2020 than in the first, according to a survey released this week by Financial Executives International in collaboration with Deloitte. Meanwhile, the percentage of companies reporting a drop in working capital balances in Q2 rose by a third as the pandemic took hold. The survey of 170 of FEI’s…