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Data Boot Camp and Beyond: Boosting Treasury’s Tech Skills

Treasurers must elevate their staff’s data and technology IQ—and figure out the best ways to do that.

The flurry of finance automation initiatives is presenting new challenges for finance leaders. Traditional roles, in cash ops, FX and cash forecasting among others, are being reshaped as manual work is supplanted by automation. Be it a new TMS, a planning solution, cloud ERPs or AI, the tech and data skill requirements for finance professionals are expanding and not everyone is prepared.

Automation abounds. At the May meeting of NeuGroup for Tech Treasurers, nearly every member reported being engaged in a technology transformation project. Some are implementing a new TMS or replacing existing ones that have become obsolete. Others are in the throes of an SAP S/4HANA implementation. Still others are experimenting with AI and RPA.

Treasurers must elevate their staff’s data and technology IQ—and figure out the best ways to do that.

The flurry of finance automation initiatives is presenting new challenges for finance leaders. Traditional roles, in cash ops, FX and cash forecasting among others, are being reshaped as manual work is supplanted by automation. Be it a new TMS, a planning solution, cloud ERPs or AI, the tech and data skill requirements for finance professionals are expanding and not everyone is prepared.

Automation abounds. At the May meeting of NeuGroup for Tech Treasurers, nearly every member reported being engaged in a technology transformation project. Some are implementing a new TMS or replacing existing ones that have become obsolete. Others are in the throes of an SAP S/4HANA implementation. Still others are experimenting with AI and RPA.

  • But no matter how advanced the technology is, it will not yield expected results if people do not know how to use it. That means upskilling existing staff and/or hiring new employees who are data and technology savvy.
  • One treasurer said he approached his contacts at giant asset manager BlackRock to find out who they are hiring. “They told me they are bringing in people with degrees in data and computer science,” he said. “The question is how can treasury, with more limited resources, hire such talent?”
  • The answer is that treasurers need to think outside the box, e.g., hire people who know more about data than finance and offer them development opportunities.
  • “I brought in a data scientist at the manager level,” one member said. “We’re going to teach him corporate finance and let him manage a small portfolio of cash,” he said.

Building tech savviness. In conjunction, or in lieu of attracting new employees, treasurers are working to enhance the data and technology IQ of existing staff. “Not everyone can make the transition,” one member said. So it behooves treasurers to increase the tech skills of their teams.

  • One large tech company’s treasurer sent staff through an online boot camp to learn how to program in Python. He found the online training, from a company called DataCamp, user-friendly. “We made this a kind of competition for the first three months,” he said. By gamifying the process, he encouraged staff to participate.
  • The experiment is working. “We have been using Python script to replace peripheral systems,” he said. Their first project involved building code for keeping track of and analyzing cash investments. “We are planning to do the same for bank accounts and FX,” the treasurer said.
  • The leap may not be as large as some may imagine. “If you have people who can build macros in Excel or use Power BI, this is one step beyond,” he said.
  • Asked whether he faced any resistance, the treasurer said: “The team loved it.”

Maintaining engagement. Augmenting employee IQ about data and tech is critical in the immediate sense, but it also has long-term benefits. In a tight labor market, treasurers say they are struggling to find qualified candidates.

  • “We are competing with banks and asset managers with much deeper pockets, so maintaining engagement is a constant challenge,” one member said. As tech companies mature, the old stock incentives are no longer as attractive.
  • When growth is slow and turnover low, there are also fewer promotion opportunities. “You need to do other things,” another treasurer said. For example, pay for business school, build new skills, and offer development opportunities to help employees move forward in their careers.

In companies with slower growth or ones that mastered the art of scalability, “you are going to see people leave. You have to expect and accept that,” this treasurer said. “It’s the way things are.”

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Crypto for Corporates: Stablecoins and the Future of ‘DeFi’

A Strategic Finance Lab interview with Custodia Bank’s Caitlin Long and a video featuring Accenture’s Duane Block.

Many finance professionals at multinational corporations remain skeptics about cryptocurrencies, including stablecoins. No wonder: Fraud charges tied to the collapse of FTX as well as two stablecoins losing their dollar pegs—Terra and USDC—have fueled well-founded fears about the world of digital assets in the last year. But that’s not the whole story.

    • There are numerous, sound reasons treasury and finance leaders need to dig deeper and learn more about stablecoins, and how they and cryptocurrencies like bitcoin could offer corporates more payment options as the future of finance becomes the present.

NeuGroup members who share that view spoke about potential applications of stablecoins, from customer-facing uses to potentially purchasing them as an inflation hedge in emerging markets, at a recent session of NeuGroup’s Digital Assets Working Group, which will have its inaugural in-person meeting on May 23-24, sponsored by TaxBit and Fireblocks.

Caitlin Long and Duane Block. To help shed more light on what can seem like an opaque, complicated topic, we offer insights from two esteemed experts on the digital asset landscape: Caitlin Long, founder and CEO of Custodia Bank; and Duane Block, Accenture’s digital currency lead for North America.

  • You can hear Ms. Long’s interview with NeuGroup founder and CEO Joseph Neu in a Strategic Finance Lab podcast by heading to Apple and Spotify. She shares her belief that the worlds of traditional finance and blockchain-based decentralized finance, or DeFi, are at an inflection point—and how a bank like Custodia could serve as a bridge between the two.
  • She and Mr. Neu also discuss stablecoin use cases for corporates, the long-term potential of crypto and blockchain technologies, and Ms. Long’s ongoing face-off with the Federal Reserve around the business model of the Wall Street veteran’s newest venture, Custodia.
  • And in a video clip you can watch by hitting the play button below, Mr. Block explains what actually happened following the collapse of Silicon Valley Bank that caused USDC to lose its peg, and why the token may have actually emerged from the crisis more stable than before. Mr. Block says it’s crucial to look at the assets that back a stablecoin, as some like Tether (USDT) aren’t as transparent as others.

A Strategic Finance Lab interview with Custodia Bank’s Caitlin Long and a video featuring Accenture’s Duane Block.

Many finance professionals at multinational corporations remain skeptics about cryptocurrencies, including stablecoins. No wonder: Fraud charges tied to the collapse of FTX as well as two stablecoins losing their dollar pegs—Terra and USDC—have fueled well-founded fears about the world of digital assets in the last year. But that’s not the whole story.

  • There are numerous, sound reasons treasury and finance leaders need to dig deeper and learn more about stablecoins, and how they and cryptocurrencies like bitcoin could offer corporates more payment options as the future of finance becomes the present.

NeuGroup members who share that view spoke about potential applications of stablecoins, from customer-facing uses to potentially purchasing them as an inflation hedge in emerging markets, at a recent session of NeuGroup’s Digital Assets Working Group, which will have its inaugural in-person meeting on May 23-24, sponsored by TaxBit and Fireblocks.

Caitlin Long and Duane Block. To help shed more light on what can seem like an opaque, complicated topic, we offer insights from two esteemed experts on the digital asset landscape: Caitlin Long, founder and CEO of Custodia Bank; and Duane Block, Accenture’s digital currency lead for North America.

  • You can hear Ms. Long’s interview with NeuGroup founder and CEO Joseph Neu in a Strategic Finance Lab podcast by heading to Apple and Spotify. She shares her belief that the worlds of traditional finance and blockchain-based decentralized finance, or DeFi, are at an inflection point—and how a bank like Custodia could serve as a bridge between the two.
  • She and Mr. Neu also discuss stablecoin use cases for corporates, the long-term potential of crypto and blockchain technologies, and Ms. Long’s ongoing face-off with the Federal Reserve around the business model of the Wall Street veteran’s newest venture, Custodia.
  • And in a video clip you can watch by hitting the play button below, Mr. Block explains what actually happened following the collapse of Silicon Valley Bank that caused USDC to lose its peg, and why the token may have actually emerged from the crisis more stable than before. Mr. Block says it’s crucial to look at the assets that back a stablecoin, as some like Tether (USDT) aren’t as transparent as others.

Embracing stablecoins. Some corporates have expressed increased interest in stablecoins since the collapse of Silicon Valley Bank, in part because the company that issues USDC expanded its partnership with BNY Mellon—a subject addressed by Mr. Block.

  • A member of NeuGroup’s digital assets group who works at a crypto-native company that has only used bitcoin said that her team is now exploring uses for USDC, which the company plans to onboard as its next digital currency.
  • A different member said the payments company where they work recently started accepting some stablecoins and then converts them immediately to fiat currency.
  • A third person at the session laid out her long-term hope for stablecoins in the form of a question: “Do they have potential applications to reduce FX volatility in countries with hard currencies?”
    • The member who works at a crypto-native company said it is the “dream of stablecoin, and one of the main use cases going forward,” which the company is in the “very early days” of exploring. “It’s something all of us would like to see,” she said.
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Driving Payments Innovation: Treasury’s Collaborative Approach

How one member’s forward-thinking team within treasury fuels payments innovation and business success.

Finance organizations reaching their full potential can play a critical role as companies explore new products, services and business models. That’s happening at one NeuGroup member company where a dedicated treasury team partners with products and payments groups to lead innovative banking and payments infrastructure initiatives that better support business requirements.

  • At the inaugural session of the NeuGroup for Payment Strategy working group, representatives from sponsor Citi co-presented with a member of the corporate’s dedicated treasury team on the keys to a payment project’s success.

How one member’s forward-thinking team within treasury fuels payments innovation and business success.

Finance organizations reaching their full potential can play a critical role as companies explore new products, services and business models. That’s happening at one NeuGroup member company where a dedicated treasury team partners with products and payments groups to lead innovative banking and payments infrastructure initiatives that better support business requirements.

  • At the inaugural session of the NeuGroup for Payment Strategy working group, representatives from sponsor Citi co-presented with a member of the corporate’s dedicated treasury team on the keys to a payment project’s success.
  • Following the session, NeuGroup founder and CEO Joseph Neu said all finance orgs should have individuals or a team within treasury to serve this role, a point embraced by members.

A dollar’s journey. The company’s dedicated treasury team focuses on designing end-to-end efficient money flows, starting the moment funds leave a customer’s account—“the journey of the dollar,” as the member called it.

  • To improve the payments infrastructure, the team collaborates with all stakeholders along the way, including business lines, cash management, corporate finance, accounts, payments and product engineering.
  • The team’s projects include enabling payments in specific regions, eliminating inefficiencies in money flow and enabling faster payment rails from collection to disbursement.
    • “The projects vary, but anything that touches money flow or bank accounts is something we get involved with and help structure a solution,” the member said.
  • The team also gets involved if the company wants to introduce a new form of payment, meaning treasury will need to solve for risks—a cross-functional issue.
    • “First of all, identify what you’re trying to achieve, and then work with the stakeholders,” the member said. “Structures like these would have several other stakeholders like tax and legal. Other teams would get involved who could define parameters around business needs and regulatory requirements.”

The need for payments innovation. A payment executive at Citi said the increasing digitization of businesses and the rise of direct-to-consumer models reflect the need for treasury teams to be involved early in the process of payments innovation.

  • He highlighted the importance of managing counterparty risk, establishing strong relationships with payment providers, acquirers, and banks and having the right payment infrastructure in place—tasks that may not get done properly if treasury isn’t involved early in the process.
  • “One best practice we’ve seen in the organization is to at least have a digital lead sitting in treasury who understands the entire ecommerce landscape and the considerations the payments teams are looking at,” he said.
  • A member of Citi’s treasury and trade services group, emphasized the need for proper budgeting for corporates looking to support this role. “It can’t just be a side job, otherwise it doesn’t get the focus it requires,” he said.

Agile planning. Having clear objectives at the start is crucial, but the member also stressed the importance of flexibility to adapt to changing business requirements.

  • “Identify the guardrails within which you are operating and then identify what you’re trying to solve for,” he said. “It may not be possible to solve for everything, and that’s okay.”
  • If flexibility is built into the project from the start, it can evolve not only to accommodate unforeseen challenges, but also to change as technology improves—which is crucial in the rapidly shifting technological landscape.
    • “You can always make changes if your infrastructure is scalable, resilient and flexible,” he said.

After the session, Mr. Neu added that payments is just one area where treasury needs to play a key role as companies adapt to change. Corporates may benefit from a policy where finance is informed about every new product, service and business model, as is the case with new legal entities and accounts.

  • “But whether the business benefits depends entirely on what treasury does when so informed,” he said. “Are they helping the business succeed with the go-to-market strategy and ensure it can scale, with enterprise level controls being layered on as it does? Or do they just say no? The former defines success, the latter makes the business sorry treasury got involved.”
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Flexing Front Office Tech Muscle to Aggregate and Analyze Data

Using Tableau to collect and aggregate data, a Salesforce treasury manager sidesteps IT to build a cash dashboard.

Having a dashboard showing where all a corporate’s cash is invested, how much yield it’s generating and the company’s exposure to numerous counterparties—on a daily basis—is not just a dream for one member of NeuGroup for Cash InvestmentsCam Bowen, senior treasury manager at Salesforce, impressed peers at the group’s first-half meeting sponsored by DWS last week by presenting a dashboard he built himself that does all that and more.

  • His accomplishment validates the idea that technology developed by front office finance professionals who take matters into their own hands rather than wait for internal IT departments to come to their aid can help finance teams report valuable analytics to senior executives and the C-Suite faster and more efficiently.

Using Tableau to collect and aggregate data, a Salesforce treasury manager sidesteps IT to build a cash dashboard.

Having a dashboard showing where all a corporate’s cash is invested, how much yield it’s generating and the company’s exposure to numerous counterparties—on a daily basis—is not just a dream for one member of NeuGroup for Cash InvestmentsCam Bowen, senior treasury manager at Salesforce, impressed peers at the group’s first-half meeting sponsored by DWS last week by presenting a dashboard he built himself that does all that and more.

  • His accomplishment validates the idea that technology developed by front office finance professionals who take matters into their own hands rather than wait for internal IT departments to come to their aid can help finance teams report valuable analytics to senior executives and the C-Suite faster and more efficiently.
  • Carlos Fernandez, a DWS coverage support specialist for Corporates & Insurance, praised the company: “By adopting cloud infrastructure and DaaS (data-as-a-service), Salesforce is moving forward with diminishing lines between technology and the front office to quickly create views and dashboards without dependency or need for time-consuming and costly IT projects.”
  • One of the members wowed by the presentation added, “The project highlighted that treasury orgs don’t need a large, dedicated team of data scientists to unlock insights from their own data.”
  • Mr. Bowen said, “We built this all, front office. If we had waited for the IT team to build some of this, we’d still be waiting.”

Self-built, self-serve and mobile. To build the global cash dashboard, Mr. Bowen taught himself how to use Tableau, the data visualization tool owned by Salesforce. “I used Tableau Prep to aggregate our data,” he explained. The so-called ETL (extract, transform, load) tool allows the company to refresh its data, daily, in less than two minutes.

  • Daily dashboard updates let Salesforce group cash across regions and obtain better summarized information about the location of its funds, overall allocations and how much it has with each counterparty.
  • Also, “all of the dashboard views filter the other views, so I can see, for example, how much a region has in money market funds,” he said. (This function of toggling data and diving deeper into a specific area is called drilling down.)
  • “I would describe this dashboard as self-serve,” he added. “Users can go in and answer any question they may have about our cash.” See the charts below for some of the views offered by the dashboard.
  • “If you go into an entity, you can see what cash it has, what it’s yielding, what currency it’s in, etc.—all at the click of a button,” he said. “When the SVB crisis hit, our AT knew within minutes how much cash we had. She didn’t need to go to us first before going to the CFO.”
    • That ability, said one peer, shows the dashboards “provide near real-time visibility into cash balances, counterparty exposures and earned interest rates”—something many corporates do not have.
  • A mobile app means the Salesforce cash dashboard is available on a smartphone, a feature the peer described in glowing terms: “The ability to access and analyze this mission-critical data on one’s mobile phone from anywhere, anytime (i.e. the tarmac while waiting for one’s airplane to take off) is a game-changer.”

How it works. Mr. Bowen provided NeuGroup Insights with this synopsis of how the system he created operates:

  • “Our TMS on a daily basis sends out an email with the cash balances, and these are downloaded daily to our shared drive.
  • “Monthly Excel yields per account are kept and are updated on a monthly basis.
  • “Tableau Prep adds yields to each account and adds a group counterparty field based on an ‘if contains’ logic because the report out of the TMS sends local branch bank names.
  • “FX rates are piped into our TMS; but if not, that would be easy enough to use a Bloomberg pull in Excel to build into the workflow.
  • “Once the Tableau hyper file is updated, we post the Tableau workbook with the dashboard up to our Tableau server.”

Peer perspective, self-enablement. One member of the group who found the dashboard presentation extremely compelling offered several takeaways, including:

  • “By leveraging Tableau Prep, Salesforce was able to combine, shape and clean its bank data, which saves countless hours of manual work typically performed in Excel or other spreadsheet solutions.
  • “The Salesforce team was able to use JOIN clauses and other low-code Tableau scripts to combine bank data from dozens of disparate sources and present that financial information in an elegant series of robust data visualizations.
  • “By leveraging their existing TMS and creating a daily balances report, Salesforce reduced the friction involved in logging into individual bank portals in order to obtain the latest financial information.”

Mr. Fernandez of DWS summed up the big picture significance of Mr. Bowen’s technology feat: “As treasury and cash management professionals, an ability to pivot and adjust to a heightened demand for transparent reporting is key in today’s environment. The Salesforce cash dashboard is an excellent example of how leading organizations are empowering self-enablement.”

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Model Partners: FP&A Helps the Business Plan Through Modeling

In tough times, FP&A is transitioning to a forward-looking stance to support smart business choices.

Inflation, anemic growth, market volatility and belt-tightening are top of mind for FP&A leaders. In a recent survey of NeuGroup for Heads of FP&A, members revealed they are putting great emphasis on collaborating with the business.

  • Specifically, they are using modeling and scenario planning to help operational leadership make informed decisions on how to plan for a difficult environment by reducing costs and/or grabbing potential growth opportunities. As the chart below shows, 94% of respondents have either adopted these practices or plan to in the next 12-18 months.

In tough times, FP&A is transitioning to a forward-looking stance to support smart business choices.

Inflation, anemic growth, market volatility and belt-tightening are top of mind for FP&A leaders. In a recent survey of NeuGroup for Heads of FP&A, members revealed they are putting great emphasis on collaborating with the business.

  • Specifically, they are using modeling and scenario planning to help operational leadership make informed decisions on how to plan for a difficult environment by reducing costs and/or grabbing potential growth opportunities. As the chart below shows, 94% of respondents have either adopted these practices or plan to in the next 12-18 months.

Time to look forward. The combination of these data points tells an important story about the critical role FP&A plays in helping companies withstand economic instability while improving results through better decision support.

  • Scenario planning and modeling enables meaningful conversations with business partners seeking to eke out savings and make savvy investments in continued growth.
  • To this end, 75% of those surveyed plan to adopt advanced analytics solutions, and half are looking to implement machine learning tools.

With the help of these new technologies, FP&A teams will be able to offer better advice to their business partners. That trend is reflected in members’ plans to embrace a more forward-looking approach to planning and forecasting.

  • Sixty-seven percent of respondents expect to adopt predictive analytics this year; the same number also intends to transition to rolling forecasting.

The bottom line: The business challenges ahead are elevating the role of FP&A as a strategic advisor to the business. So this is an opportunity for FP&A teams to build credibility by producing actionable, forward-looking insight and leveraging new technologies to improve modeling and analytics.

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Talking Shop: Retailers Read Credit Card Tea Leaves

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected].


Context: How much consumers spend and how they pay for what they buy are critical topics for members of NeuGroup for Retail Treasury trying to manage risk and run forecasts amid fears of recession and abundant economic uncertainty.

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected].


Context: How much consumers spend and how they pay for what they buy are critical topics for members of NeuGroup for Retail Treasury trying to manage risk and run forecasts amid fears of recession and abundant economic uncertainty.

Member question: “Has anyone else here seen a large uptick of credit card usage among your customers this year so far? We’ve seen historically high levels of credit card use at our stores and I was wondering if others are experiencing the same and what they’re attributing to this trend.

  • “We’ve heard that inflation might be a key factor but wanted to sense check with this group.”

Peer answer 1: “Overall card usage is stable for us this year, but there is a shift from debit to credit as stimulus has dried up and consumer finances generally tighten.

  • “When you start seeing articles like the one on Bloomberg about consumers using buy now/pay later for groceries, you can be pretty sure the squeeze is on. Between inflation, lower tax refunds, job losses, it doesn’t seem too surprising that credit usage is up.”

Peer answer 2: “We are heavy on debit acceptance and since Covid we did experience a shift to credit. Our credit penetration grew 3% to 4% from pre-pandemic levels. The rate of increase has stabilized over the last few months.

  • “The shift to credit has been most noticeable in the rewards categories, which as you know, increases your cost of acceptance.”

Member response: “It sounds like for most our peers, credit usage has rebounded to pre-pandemic levels but for the off-price and discount segments, there has been a larger increase in credit usage that can be attributable to inflation, exhaustion of government stimulus, and job losses in certain regions/sectors.

  • “It’ll be interesting to see how long our customers can sustain this until they reach their credit limits. We’ll also keep talking to our card issuing banks and card brands on this topic.”
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Wringing Every Drop From a Tight Treasury Technology Budget

Maximizing the potential of existing tools and current employees depends on detailed plans and open communication.

Technology budgets for treasury teams have always been tight, and high inflation and low corporate earnings are making it even harder to get new funding. At a recent meeting of Women in NeuGroup, members shared tips on maximizing resources for tech solutions. Two messages came through clearly: treasury teams should make sure they’re using every functionality in existing systems, and a system is only as effective as the staff’s ability to use it.

  • Peer group leader Julie Zawacki-Lucci, who led the session sponsored by TIS, summarized the point that a number of members agreed upon: “Treasury teams have to look at different initiatives through a global lens, and then toggle down to the details of managing talent and effective communication to affect change.”

Maximizing the potential of existing tools and current employees depends on detailed plans and open communication.

Technology budgets for treasury teams have always been tight, and high inflation and low corporate earnings are making it even harder to get new funding. At a recent meeting of Women in NeuGroup, members shared tips on maximizing resources for tech solutions. Two messages came through clearly: treasury teams should make sure they’re using every functionality in existing systems, and a system is only as effective as the staff’s ability to use it.

  • Peer group leader Julie Zawacki-Lucci, who led the session sponsored by TIS, summarized the point that a number of members agreed upon: “Treasury teams have to look at different initiatives through a global lens, and then toggle down to the details of managing talent and effective communication to affect change.”

Process mapping for efficient use of existing tools. When one global director of treasury stepped into the role, she quickly sat down with the treasury’s IT engineering team and mapped out the flows of funds. “We looked at where money flows from treasury and into banks, and from banks into treasury,” she said.

  • “I looked at what we were doing, and said, ‘Oh no, we have to automate confirmations and payments, and we have to have straight-through processing,” she said. “I asked around, I gathered everyone’s pain points at a high level, and saw that our treasury management system was highly underutilized.”
  • Without needing to get approval to purchase a new solution, she was able to streamline processes simply by fully employing tools the team already had.
  • This process, the member said, can also help to eliminate redundant technologies so resources can be diverted to more useful efforts. “You never want to have a solution in search of a problem,” she said.

Deploying all tools. Another member shared a similar story—her team was using only Excel in its cash forecasting process, but saw that the FP&A team used Hyperion, a planning, forecasting and analytics solution from Oracle that she described as “Excel on steroids.”

  • Because Hyperion is similar to Excel, it was an easy tool to learn and didn’t cost a dollar, as treasury only needed to work with the FP&A team to gain access to the tool.
  • It wasn’t smooth sailing for long, though, as FP&A switched to a different tool three years later, forcing treasury to learn an entirely new system. The transition was a laborious two-year process; treasury eventually hit the eject button and went back to Excel.

Marketing change. The fact that staff were not able to come up the learning curve for the new FP&A tool fast enough speaks to another of the session’s lessons: the need for effective change management to help employees learn new skills faster. “Change management is just about effective communication, and understanding how you’re affecting the person on the other side of whatever it is that’s being changed,” one member said.

  • The first step in a change management process, she said, is to listen to employees’ needs before implementing any new tool. “It’s just common sense that technology teams should not be telling the users what they need—it should be a partnership,” she said. “It’s always a ‘we,’ never an ‘I.’”
  • A creative approach one member took when transitioning to a new TMS was to start a bimonthly newsletter for the team. “It was just two pages; the first page gave everyone an idea of what we were working on and what they should focus on,” she said. “And the second had this section called the Education Corner, so I could reiterate things like what is netting, cash pooling and bank account management, and how to do them in the TMS. It really helped with acceptance and utilization.”

Technology advocates. Successful adoption isn’t possible without a team that has the right skills, another member said. She added that effective technology skill sets require “independent study among employees, or prior experience in the tools.”

  • One technique she’s employed is to find “super users” at the company, employees who have bought into the solutions, know how to use them effectively and use them frequently.
  • These individuals don’t only help justify the tech solutions’ budget, but can also be deployed to “upskill” coworkers who may not yet understand how to get the best from them.
  • “I was very successful with upskilling treasury employees with no technology background,” she said. “We had people volunteer to learn these tools, and some of them even became super users themselves.”
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Finding Career Success: Embrace Change, Understand Yourself

PwC principal Kristen Michaud discusses her career path from biology to finance, and what she’s learned along the way.

In the latest episode of NeuGroup’s Strategic Finance Lab podcast, Kristen Michaud, a principal in PwC’s Finance Transformation group, joins NeuGroup’s Julie Zawacki-Lucci to discuss what they’ve learned from decades in finance—and advice they wish they’d received earlier in their journeys.

  • In the podcast, which you can listen to now on Apple and Spotify, Ms. Michaud discusses her career path, beginning with a biology degree and possible plans for medical school—until her fascination with finance and technology took her to IBM, GE Capital and now PwC.

PwC principal Kristen Michaud discusses her career path from biology to finance, and what she’s learned along the way.

In the latest episode of NeuGroup’s Strategic Finance Lab podcast, Kristen Michaud, a principal in PwC’s Finance Transformation group, joins NeuGroup’s Julie Zawacki-Lucci to discuss what they’ve learned from decades in finance—and advice they wish they’d received earlier in their journeys.

  • In the podcast, which you can listen to now on Apple and Spotify, Ms. Michaud discusses her career path, beginning with a biology degree and possible plans for medical school—until her fascination with finance and technology took her to IBM, GE Capital and now PwC.
  • Ms. Zawacki-Lucci compares notes with Ms. Michaud and shares her insights from a decade and a half working in treasury at CVS and Hasbro. And she talks about the benefits for some working mothers—including herself—of remote and hybrid work models.

Kristen Michaud
Principal, PwC

The conversation, which was recorded during Women’s History Month, also gets into the challenges of balancing a family and personal life, especially for women with children or who plan to have them.

  • “I knew at some point I wanted to have children, so I thought I should probably get my MBA done before I wanted to have kids, right?” Ms. Michaud says. “And so that was probably one of the harder decisions: Do you have enough work experience to go get your masters or do you wait?
  • “Early career, I used to worry about always having a plan. What I’ve realized now that I’m older is that, I look back, and those things kind of naturally happen and they happen at the right time.”
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The Big Picture Beyond Banks: A Holistic View of Counterparty Risk

A good risk management system requires a list of all exposures, according to CFO.University’s Steve Rosvold.

The Silicon Valley Bank crisis raised concerns for many corporates around bank counterparty risk—but counterparty risk goes beyond just banks, as companies are also exposed to the actions of customers, vendors and investors. In order to effectively manage these risks, it is essential for a finance team to adopt a holistic approach that tracks all sources of exposure.

  • That’s one takeaway from an upcoming episode of NeuGroup’s Strategic Finance Lab featuring Steve Rosvold, founder and chief learning officer of CFO.University, a professional community of business leaders, companies and advisors that trains and develops future CFOs.
  • Mr. Rosvold’s career includes nearly two decades in finance at Cargill, before he became CFO of ConAgra Malt.

A broader look at risk. Interest rate hikes and bank failures have sparked what Mr. Rosvold calls a “rude awakening in risk management in general,” as cash has become more expensive and financial institutions less reliable.

  • In a video you can watch by hitting the play button below, he stresses the need for finance organizations to analyze the exposure of “everyone you’re doing business with,” and encourages companies to establish a risk charter.

A good risk management system requires a list of all exposures, according to CFO.University’s Steve Rosvold.

The Silicon Valley Bank crisis raised concerns for many corporates around bank counterparty risk—but counterparty risk goes beyond just banks, as companies are also exposed to the actions of customers, vendors and investors. In order to effectively manage these risks, it is essential for a finance team to adopt a holistic approach that tracks all sources of exposure.

  • That’s one takeaway from an upcoming episode of NeuGroup’s Strategic Finance Lab featuring Steve Rosvold, founder and chief learning officer of CFO.University, a professional community of business leaders, companies and advisors that trains and develops future CFOs.
  • Mr. Rosvold’s career includes nearly two decades in finance at Cargill, before he became CFO of ConAgra Malt.

A broader look at risk. Interest rate hikes and bank failures have sparked what Mr. Rosvold calls a “rude awakening in risk management in general,” as cash has become more expensive and financial institutions less reliable.

  • In a video you can watch by hitting the play button below, he stresses the need for finance organizations to analyze the exposure of “everyone you’re doing business with,” and encourages companies to establish a risk charter.

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Talking Shop: Bank Counterparty Risk: Does the Branch Matter?

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected].


Context: The crisis of confidence ignited by the flameout of Silicon Valley Bank prompted finance organizations at multinational corporations to ask a plethora of probing questions about bank counterparty risk and the safety of corporate cash. Though some questions have been answered and appropriate actions taken, ongoing fears around midsized regional banks like First Republic are causing treasury teams to continue to seek guidance from peers and subject matter experts about the way forward.

  • Those experts include several former bankers who now offer their insights to NeuGroup members, including Jerry Olivo, former head of intraday liquidity at Citi treasury, who provided the first answer to the member question below.

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected].


Context: The crisis of confidence ignited by the flameout of Silicon Valley Bank prompted finance organizations at multinational corporations to ask a plethora of probing questions about bank counterparty risk and the safety of corporate cash. Though some questions have been answered and appropriate actions taken, ongoing fears around midsized regional banks like First Republic are causing treasury teams to continue to seek guidance from peers and subject matter experts about the way forward.

  • Those experts include several former bankers who now offer their insights to NeuGroup members, including Jerry Olivo, former head of intraday liquidity at Citi treasury, who provided the first answer to the member question below.

Member question: “When assessing counterparty risk, do you analyze at the level of the bank group or at the level of the individual branch where the cash deposits are held?

  • “We are preparing a counterparty risk analysis report and our treasurer asked whether we should be looking at the bank level or at the individual branch level, where we actually have our deposits. Curious to learn how others look at this.”

Jerry Olivo, NeuGroup Senior Executive Advisor: “Your counterparty risk should usually be at the bank legal entity level rather than at the branch level. If the branch is outside of the US, you should review account terms and conditions to determine if there are conditions that would limit recourse to the US bank entity of which it is a part. I believe that’s rare, but I have seen it.”

Peer Answer 1: “Unless the branch falls under a banking subsidiary under a different name but the same holding parent bank and there is corporate separateness, in my opinion, there is not much benefit to looking at it at the branch level.

  • “We developed a counterparty risk dashboard for each banking partner that tracks deposits and pulls five-year CDS market spreads and bank-specific credit ratios. If you have an investment portfolio and invest in bank CDs or CP or short-term bonds, I recommend you go a level deeper and look at your [financial] investment security exposure with any of the banks as well.”

Peer answer 2: “Ditto as the responses above—you do not need to go down to the branch level, because an individual branch will not default. For high risk countries, we do look at it on a country basis, because it’s possible that a bank could declare default in a specific country (but rare, and that would likely only be if the whole country was in crisis and the bank was being forced to default there, e.g., a Venezuela type situation).”

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Automation Pumps New Life Into a FX Trade Life Cycle

Automating trade operations lets treasury focus on strategy and understanding economic drivers of FX exposures.

“Automate the operations, unlock the strategy.” That concise phrase encapsulates the transformational and holistic approach to consolidating and managing data, including exposures, at high velocity within the FX trade life cycle adopted by one NeuGroup member company. And the phrase served as a subheading for a presentation made by a manager in the company’s global treasury FX risk management group at the fall meeting of NeuGroup for Foreign Exchange 1.

  • “It has been a tremendous help to automate it,” the member said of the FX trading process. “Because most of our operations are automated, we can focus on strategy, understanding the current macroeconomic environment, and managing the P&L.”

Automating trade operations lets treasury focus on strategy and understanding economic drivers of FX exposures.

“Automate the operations, unlock the strategy.” That concise phrase encapsulates the transformational and holistic approach to consolidating and managing data, including exposures, at high velocity within the FX trade life cycle adopted by one NeuGroup member company. And the phrase served as a subheading for a presentation made by a manager in the company’s global treasury FX risk management group at the fall meeting of NeuGroup for Foreign Exchange 1.

  • “It has been a tremendous help to automate it,” the member said of the FX trading process. “Because most of our operations are automated, we can focus on strategy, understanding the current macroeconomic environment, and managing the P&L.”

Exposure forecast model (EFM). The risk management team has an exposure forecast model designed by two full-time software developers that makes use of IBM’s Planning Analytics system (TM1/PA) to transform its “global supply chain data and business planning infrastructure into a foreign currency perspective so that the global treasury team can manage the consolidated FX risk” for the corporation, according to the member’s presentation.

  • The EFM consists of three parts shown in the presentation: input, analysis and output. The output phase consists of:
    • Sourcing exposures
    • Trading company exposures
    • Inventory exposures
  • The data is then migrated into the company’s hedge position model (HPM) in the IBM system.

The trade life cycle. As the infographic below shows, there is a purposeful, circular relationship between the EFM, HPM, booking system, and live market data. For this example, the company executes new trades using the Bloomberg Terminal and those trades are automatically processed and confirmed by the trade booking software system. The company’s back office manages FX settlements and collateral issues before the trades are entered into SAP S/4HANA.

  • During the session, the member demonstrated end-to-end, real, live FX trades, using the company’s connected systems.

Less time, more value. In a follow-up interview, the member outlined the benefits of the system. “We have drastically minimized non-value-added work across the global FX team. Things such as (1) exposure consolidation; (2) designating a trade against an exposure; (3) auto-NDF fixing with counterparties; (4) confirming, matching, and settling of FX trades (~80% automated by total outstanding notional volume in USD equivalent); (5) tax reporting on financial derivatives; (6) and lastly, minimizing the amount of manual errors,” he said.

  • “Don’t get me wrong—these steps are critically important, but it has been a tremendous help to automate it, allowing us to focus more on managing the P&L.”
  • He said the biggest benefit is that the “automated systems enable us to ‘compete’ an order filled with multiple counterparties. So instead of negotiating an unfavorable price with a single bank, we deploy the order (privately) to various banks, ‘competing’ the second, more profitable component of the FX deal, the forward points.
  • “The best part is that while the banks are competing against each other, it gives us time to analyze their bids or offers relative to the indicative price. That way, we know exactly how much they are profiting off the deal and, more importantly, how much we saved by competitively dealing away the second part of the order. This could have taken hours of negotiation in the past, but now it takes only a few minutes.”

Deeper dive. The member’s team trades the FX forward components separately: spot rate first, then the forward points. “Some corporates leave orders with a bank to take advantage of market spot volatility (we do this). When a bank fulfills a spot order, we can roll the done spot deal into forwards with that specific bank or compete it with multiple banks,” he said.

  • “Essentially, the bank has won the spot component of the deal, but they must be competitive to win the rest (the forward points). Automation has helped make these conversations/negotiations easier because we can bid forward points to any bank in our credit facility,” he added.
  • “Spot risk has been neutralized via the order fill. The mechanics before automation were messy, but now it’s simplified, expedited and straightforward.”

Words to the wise. “When implementing this across our global FX team, we were careful to automate specific processes in our operations with intentional human intervention,” the member said. “For example, the hedge designation process can only be kicked off when each trade is confirmed and matched. After our back-office reviews this step, our system will retrieve that input and automatically run the hedge designation process.

  • “Not only does this allow our automated operational flows to comply with the requirements of our audit and controlling groups, it also ensures that each trade fulfills the intended risk management strategy,” he added.
  • “As financial risk managers, we aim to minimize FX volatility and protect the P&L,” he said. “Still, we must also identify efficient processes and streamline our systems to support our key objective. Additionally, we must ensure our software developers understand what needs to be done for a successful program. Without their help and continued support, none of this would be possible.”
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Speed, Stablecoins and the Future of Payments with Caitlin Long

A Wall Street veteran and crypto proponent sees stablecoins as an opportunity with real-world uses for corporates.

Stablecoins—along with the entire world of cryptocurrency—have taken some lumps lately. That includes: faltering demand for two prominent players, BUSD and USDCrisk warnings about the digital coins from Fed vice Chair Michael Barr; and growing scrutiny and concern from the SECCongress and the Bank of England.

Does all that mean finance teams at multinational corporations that need to keep up with developments in the payment space should turn their backs on the coins pegged to other assets like the dollar? Absolutely not is the emphatic answer from Caitlin Long, a Wall Street veteran and self-professed “bitcoin evangelist” making a name for herself at the intersection of banking, crypto and the future of payments.

In a video you can watch by clicking the play button below, Ms. Long—the founder and CEO of Custodia Bank—tells the story of a non-crypto company that seized a time-sensitive market opportunity in China and earned $2.6 million by using a stablecoin. That would not have happened if the company had to rely on traditional banking channels, she says.

  • “This is real-world stuff,” Ms. Long says in the video. She believes this kind of opportunity will become more common, especially with stablecoins available for deposits and withdrawals at non-US banks like Xapo. “If you have an opportunity where you need to move money really fast, you’re going to turn to a stablecoin.”

A Wall Street veteran and crypto proponent sees stablecoins as an opportunity with real-world uses for corporates.

Stablecoins—along with the entire world of cryptocurrency—have taken some lumps lately. That includes: faltering demand for two prominent players, BUSD and USDCrisk warnings about the digital coins from Fed vice Chair Michael Barr; and growing scrutiny and concern from the SECCongress and the Bank of England.

Does all that mean finance teams at multinational corporations that need to keep up with developments in the payment space should turn their backs on the coins pegged to other assets like the dollar? Absolutely not is the emphatic answer from Caitlin Long, a Wall Street veteran and self-professed “bitcoin evangelist” making a name for herself at the intersection of banking, crypto and the future of payments.

In a video you can watch by clicking the play button below, Ms. Long—the founder and CEO of Custodia Bank—tells the story of a non-crypto company that seized a time-sensitive market opportunity in China and earned $2.6 million by using a stablecoin. That would not have happened if the company had to rely on traditional banking channels, she says.

  • “This is real-world stuff,” Ms. Long says in the video. She believes this kind of opportunity will become more common, especially with stablecoins available for deposits and withdrawals at non-US banks like Xapo. “If you have an opportunity where you need to move money really fast, you’re going to turn to a stablecoin.”

The promise of Custodia. Ms. Long’s resume includes 22 years of corporate finance experience, with stints at Salomon Brothers, Credit Suisse and Morgan Stanley. She’s a Wyoming native who founded Custodia in her home state in 2020 to function as a safe bridge between the worlds of traditional finance and blockchain-based decentralized finance.

  • Though not yet operational, the bank plans to function as a non-lending special purpose depository institution, which means it will hold 100% cash reserves. She says that will essentially eliminate any concerns around the counterparty risk of working with a new, small bank.
  • Custodia Bank has received its certificate of authority to operate as a state charter bank, which allows it to offer custody services for bitcoin and ether, which it plans to launch shortly. But getting approval for also banking US dollars is a separate issue.
  • To hear more about Custodia, including Ms. Long’s struggle to get the bank’s business model approved by the Federal Reserve, please be on the lookout for an upcoming episode of the Strategic Finance Lab podcast, featuring an interview by NeuGroup founder and CEO Joseph Neu.
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Russia Pain: OFAC Answers NeuGroup Members’ Sanctions Questions

Compliance officers at the Office of Foreign Assets Control offer insights on bank sanctions and licensing issues.

At a meeting this week of NeuGroup’s Russia-Ukraine Crisis working group, a compliance officer from the Office of Foreign Assets Control acknowledged that the significant reduction in unsanctioned banks available to work with multinational corporations in Russia presents obstacles to companies authorized to do business in the country under US and other sanctions regimes, including firms supplying medicines.

Compliance officers at the Office of Foreign Assets Control offer insights on bank sanctions and licensing issues.

At a meeting this week of NeuGroup’s Russia-Ukraine Crisis working group, a compliance officer from the Office of Foreign Assets Control acknowledged that the significant reduction in unsanctioned banks available to work with multinational corporations in Russia presents obstacles to companies authorized to do business in the country under US and other sanctions regimes, including firms supplying medicines.

The session, moderated by NeuGroup senior executive advisor Paul Dalle Molle, began with introductions of two OFAC officers, information about sanctions objectives and tools and the five key components of an effective corporate sanctions compliance program:

  • Management commitment
  • Risk assessments
  • Internal controls
  • Testing and auditing
  • Training

Bank frustration. One of the main pain points facing multinationals still doing business in Russia is what Mr. Dalle Molle described as “the structural frustration of having business that is allowed under the sanctions but which companies can’t get done because there are no banks available to assist them.” The banking issue affects corporates authorized to export products including medicine, medical devices and agriculture commodities.

  • “That is something that we acknowledge is a difficulty,” the OFAC officer said. “You get a recent action notice that says a bank you’ve been transacting with is suddenly designated and you can’t do business with them. I understand that is very jarring, very impactful.”
  • However, in response to a member who asked, “can OFAC share a sense of the likelihood of having more banks sanctioned/join the [Specially Designated Nationals] list,” the officer said OFAC will not “preview” that it plans to designate an entity, in part because that could allow it to take actions that undermine the purpose of putting the bank on the sanctions list.
  • But he noted that, “in a lot of our designations, of banks in particular, we’ve published general licenses that authorize a gamut of wind-down activities” that may ease the burden on corporates affected by putting a bank on the sanctions list.

General license renewals. Another member asked if OFAC intends to continue to renew General License 13D, which allows transactions, including tax payments, through the Central Bank of Russia that are otherwise prohibited. GL13D is currently in its fourth iteration and expires June 6, 2023. “And if they stop renewing, what advance notification might they expect to give to allow businesses to appropriately wind down or exit from Russia?” the member added.

  • “It isn’t guaranteed that this authorization will be renewed until the end of time,” another OFAC officer at the session said, noting that the agency will consider the full facts and circumstances of the situation at the time of the expiration.
  • The officer encouraged members to write to the agency with their concerns about this issue because feedback from the public is among the factors considered in making decisions like this, they said. If GL13D is not renewed, companies could apply for a specific license, which is issued on a case by case basis, the officer said.
  • The member who posed the question said if the general license is not renewed, it’s “effectively impossible to do business in Russia at that point because you can no longer pay taxes to the central bank.” In advance of OFAC’s decision, the company has to do considerable work to plan for a wind down.
  • “The more runway to get those renewed earlier is helpful to avoid a lot of panic or work internally, even if you can’t give us permanent guidance on it.” The officer said they would take the member’s views back to colleagues at OFAC.

Seek help and guidance. The extra time and cost to obtain a specific license within a sanctions regime makes applying for them a last resort for many companies. One of the OFAC compliance officers said when applying for a specific license companies should consider applying for interpretative guidance as well.

  • “Get our interpretation whether you actually need a license for something, whether it is authorized or if you’re unsure if you’re interpreting the regulations the right way,” they said.
  • The officer encouraged members to make use of OFAC’s email and feedback hotlines to ask questions. “If you’re unsure, please email us.” For a list of ways to contact OFAC, click here.
  • For corporates that do need to apply for a specific license, the officer recommended including as many details as possible about transactions and the parties involved. The more details you provide initially, the less back-and-forth you may have with the OFAC licensing office.

Harmony. In the last question of the session, a member asked, “Does OFAC have any plans to engage with EU counterparts to create a general license for humanitarian transactions to allow for the use of banks under asset freezes in the EU? One of the most challenging issues on the financial transaction side for us is these divergent requirements.”

  • A compliance officer said OFAC has amended numerous general licenses across different sanctions programs to harmonize with changes in the UN’s asset freeze procedures. “The EU, the UK and the US are really trying to harmonize as much as possible,” they said.
    • “We understand that this can create very challenging issues when you’re looking at jurisdictional issues. I hope in the future that you’ll see more of an effort to harmonize things on the humanitarian authorization front.”
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Back to Office Catalyst: Face Time To Boost Odds of Promotion

Leaders are trying subtle, mostly unspoken, ways of conveying that more time in the office is a path to advancement.

Treasury and finance leaders at some companies with hybrid work policies are seeing progress enticing more team members to show up at the office by making it clear, if not saying it explicitly, that coming in and spending time with senior staff improves their chances for career advancement and promotions.

  • A related talent takeaway from conversations at the fall meeting of NeuGroup for Capital Markets sponsored by Chatham Financial and Loop Capital Markets: some companies have found success in pulling employees back to the workplace by setting specific days each week when the leadership team will be in the office.

Leaders are trying subtle, mostly unspoken, ways of conveying that more time in the office is a path to advancement.

Treasury and finance leaders at some companies with hybrid work policies are seeing progress enticing more team members to show up at the office by making it clear, if not saying it explicitly, that coming in and spending time with senior staff improves their chances for career advancement and promotions.

  • A related talent takeaway from conversations at the fall meeting of NeuGroup for Capital Markets sponsored by Chatham Financial and Loop Capital Markets: some companies have found success in pulling employees back to the workplace by setting specific days each week when the leadership team will be in the office.
    • That allows employees who want to advance their careers to get face time with the people who influence and make personnel decisions.

The power of rubbing elbows. During the meeting, someone from Chatham asked the group, “Have you conditioned promotions on people coming back? Or is it more that if somebody is trying to advance and grow in their career, they’re realizing it will be better if they’re more accessible or in the office?”

  • No one at the meeting said they are telling employees outright that they need to be in the office to be promoted. But that message is getting through: One member has an employee who repeatedly pushed to be promoted but wasn’t coming in. The member told him that even if he brought the employee’s name up for promotion it wouldn’t do any good.
    • “You need to have support from others around, and if you’re just at home, you’re not going to get that,” he said. “You’ve got to rub elbows a little bit with the big people.”
  • Another member, whose official company policy is still flexible, also has an employee eager to be promoted. “He sees that everyone else is in the office four times a week,” she said. That has helped him realize that “‘oh, well maybe I shouldn’t be the only one who isn’t coming in all the time.’ He’s even coming in on Fridays now because he knows that I’m there and that the treasurer is there.”
  • A member of NeuGroup for Mega-Cap Treasurers offered this perspective: “I feel the right way to think about it is that when you’re in the office you are more visible and you get to showcase your skills; it’s hard to do that on Zoom.” But he’s not convinced that tying promotions to coming in makes sense.
  • “But I can tell you this,” he added, “Gen Z is hungry, and that will be the biggest working group soon and they want to be in the office. Those people who don’t want to be in the office may lose out on promotion. It is really a generational thing.”

The value of structure and predictability in hybrids. Several members said there are distinct advantages with hybrid work models where employees know the days the leadership team will be in the office. They also say telling team members which two or three days to come in—instead of letting them choose—results in more buy-in from staff, promoting collaboration and helping build a culture.

  • For one member, the difference was staggering when his company transitioned from three floating days (where employees pick which days to come in) to a structured Monday through Wednesday in-office schedule. “At least double the amount of people are in the office on seemingly the same schedule as they were before. But because there’s more accountability to the assigned days, the population in the office has just exploded,” he said.
  • By contrast, companies with loose hybrids policies report less success in holding employees accountable for coming in as often as the company wants. And that can undermine the whole point of having people in the office. As one member observed, “It’s important not to make it too open-ended, then somebody comes in and no one else is there.”

The flexibility conundrum. The problem for some companies that find themselves short-staffed in tight labor markets is that many applicants want or still insist on open-ended, extremely flexible policies. That introduces a powerful cross-current to talent discussions about how to convince more people to go back to the office.

  • Several members have seen a demonstrable increase in applications for positions that are advertised as fully remote. One member observed that “the younger workforce is more concerned about flexibility than they are about money.”
  • That member’s company, like several others in the group, has offered positions that are fully or nearly-fully remote along with a schedule where employees have every Friday off. She questions whether offering extreme flexibility is the best way to hire and keep staff: “I’m not so sure. We’ve had some trouble retaining talent.”
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The Challenge of Building Agility Into Finance

How finance organizations can become more resilient amid disruption and demands to accommodate rapid changes in the business landscape.

By Nilly Essaides

Change, of course, is not new. But its speed and velocity have grown exponentially since the start of the pandemic. And its relentlessness is pressuring finance departments to speed up the delivery of data-driven decision-making support to the C-Suite and business leaders. An uncertain economic environment, a cloudy outlook for interest rates and inexorable technological innovation present CFOs and their teams with challenges—as well as the chance to enable a more agile operating model.

How finance organizations can become more resilient amid disruption and demands to accommodate rapid changes in the business landscape.

By Nilly Essaides

Change, of course, is not new. But its speed and velocity have grown exponentially since the start of the pandemic. And its relentlessness is pressuring finance departments to speed up the delivery of data-driven decision-making support to the C-Suite and business leaders. An uncertain economic environment, a cloudy outlook for interest rates and inexorable technological innovation present CFOs and their teams with challenges—as well as the chance to enable a more agile operating model.

Agility challenges. Greater agility in this finance context means making processes more efficient by shortening the data-to-action cycle. Companies must think forward and prepare for the unexpected by improving data integrity, enhancing analytics capabilities and embracing dynamic planning principles.

  • “Our finance reinvention initiative is focused on increasing organizational agility,” said a member of NeuGroup for Heads of FP&A. “That is particularly challenging for a company with a long history of doing things a certain way.”

A two-pronged approach. Agility can be made tangible in the finance context. Achieving it boils down to two primary strategies:

  1. Process redesign, through standardization and automation, to eliminate redundant activities.
  2. A reconsideration of process placement, i.e., where certain activities should take place.

Automation everywhere. Process optimization and standardization are essential to realizing a positive ROI on automation and reducing the time it takes to produce actionable insight. When technology merely automates legacy processes, it will perpetuate inefficiencies. Plus, incongruent processes often use inconsistent data and analytics approaches that lead to inconsistent decisions, inevitably impairing the ability of companies to change course quickly.

  • “I am focused on streamlining and standardizing the capital allocation process,” one member of the FP&A group said. “Having looked at this from the outside and now the inside, I was surprised to find so many low-hanging fruits,” she said. “Whatever I can do to introduce consistency to capex and opex planning, the more efficient and cohesive we become.”

What goes where? An integral aspect of process design is figuring out who will execute it and where; what matters most is ensuring the right activities are performed at the right part of the organization to optimize efficiency and eliminate redundancies. Increasingly, the agile finance operating model includes shifting work to shared services centers (SSCs) and/or centers of excellence (COEs).

  • The migration of certain activities to entities outside of HQ finance (even if they are owned by finance) must go hand in hand with the redesign of the process itself. In some cases, finance organizations have chosen to “lift and shift,” i.e., take an existing way of doing things and transfer it to an SSC or COE. However, to realize cost and effectiveness benefits, it is often better to optimize the process first, before dropping it somewhere new.
  • There remains a debate about the scope of SSCs versus COEs which goes beyond semantics. How companies distinguish between the two is essential to making choices about where to migrate specific activities.
    • “When we started our COE five years ago, it performed pretty simple work, like data aggregation and first-line analysis,” one member explained. “Over time, we realized that is not the best use case. Now we are using the COE to concentrate high caliber talent who can develop advanced models, which serve finance in executing sophisticated analytics.”

Clarity of roles. While SSC and COE definitions continue to differ, we see the emergence of a clearer distinction between the two, which speaks to how finance advances the cause of agility.

  • Digital operations centers. Historically, SSCs were a labor arbitrage play. Companies shifted high-volume, low-value work to cheaper, offshore locations. While some organizations hold on to this legacy strategy, greater automation is altering the value proposition of SSCs.
    • More mature SSCs are becoming digital hubs where highly automated work is consolidated to create economies of scale. In addition, while the bulk of the SSCs’ work is typically finance related, they can also serve other parts of the company, like sales or marketing. Mature SSCs are often multi-functional.
  • Capability centers. COEs, meanwhile, often host more high-value work; they bring together a small group of specialists, e.g., in analytics or RPA, to spread their often expensive expertise to support a broader audience, so not every finance team member must learn how to build ML algorithms or program robots.
    • The COE’s team can thus perform activities like building sophisticated models, running scenario analysis, evaluating and purchasing new solutions and accelerating the automation of finance processes.

FP&A business empowerment. Establishing a COE does not mean finance is stripping the business from doing its own analysis. On the contrary: Solving  problems at the source and implementing immediate solutions is key to the finance function’s agility. What more mature COEs now do is purchase solutions that support self-service functionalities via user-friendly interfaces. The upside is 1) decisions can be made faster and closer to the business; and 2) decisions are based on a consistent set of data and models.

  • However, self-service can backfire, as one of our members found out the hard way. “We wanted to enable staff to get answers quickly, so we implemented Power BI,” this member said. This attempt at empowerment led to a proliferation of models, which complicated cross-finance decision making. “We are going to move to a different type of solution,” the member said.

A shifting center of gravity. As finance is remodeling, it is also transforming how it identifies and acquires new tools. While IT typically leads the selection and implementation (or upgrading) of ERPs, our conversations with members reveal that decisions to acquire process-specific solutions are often made by SSC and COE leaders..

  • For example, analytics COEs are often charged with developing the business requirements document for their solutions, managing the RFP, making the final choice and monitoring ongoing performance.  For vendors, this means building relationships with a new cohort.
  • Cash ops and other transactional finance systems are increasingly selected by SSCs, which are charged with maintaining them in collaboration with IT, so banks are reaching out to an entirely new buyer community.

Meanwhile, the implication for finance leaders is that they must work closely with their SSC and COE leader peers if they are to ensure their needs as users are fully addressed.

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Talking Shop: Investment Policies and Counterparty Risk on Cash

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected].


Context: The failures of Silicon Valley Bank, Signature Bank and Credit Suisse dramatically drove home the critical need of corporations to keep close tabs on the credit worthiness of their banking partners. In response to the crisis of confidence, some companies moved money out of smaller, regional institutions into large, global systemically important banks. The tumult also sparked questions for treasury from audit committees and the C-Suite about counterparty risk and investment policies.

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected].


Context: The failures of Silicon Valley Bank, Signature Bank and Credit Suisse dramatically drove home the critical need of corporations to keep close tabs on the credit worthiness of their banking partners. In response to the crisis of confidence, some companies moved money out of smaller, regional institutions into large, global systemically important banks. The tumult also sparked questions for treasury from audit committees and the C-Suite about counterparty risk and investment policies.

Sharing investment policies. In response to the inquiry posted below, two NeuGroup members shared edited versions of their investment policies with the peer who asked the question. Excerpts from those two policies, also provided to NeuGroup, follow a response from another peer.

Don’t change the policy? When asked by NeuGroup Insights, the treasurer of one company that provided its policy said he did not change it in the wake of events in the banking world. “We believe a good investment policy should not need to be changed for every crisis. If it is a good policy, it covers all the potential risks,” he wrote.

  • “We do and have given our investment managers tactical guidelines that are more conservative than the investment guidelines,” he added. “In this case, for financials since 2009, we only allow the purchase of specific bank names from a list we provide. We review and edit it from time to time.
  • “One example why we do that is our primary operational bank. Worldwide, we have plenty of exposure to that specific bank via balances in our bank accounts; therefore, we do not allow our asset manager to buy their bonds even though they meet the ratings threshold.”

Question: “I’m looking to see if anyone has a framework in their investment policy around counterparty risk on cash? The news about SVB, Signature and CS prompted an audit committee inquiry about our investment policy. I would appreciate it if anyone is willing to share their investment policy.”

Peer answer 1: “While I cannot share our investment policy itself, we employ best practices and place limits on counterparties. Limits are a combination of hard dollar limits and percentage limits, which allow for flexibility during cash peaks.

  • “We also employ minimum credit ratings and duration limits. Any exceptions (which are few) require advance written approval by the treasurer.”

Peer 2 investment policy excerpts:

“Counterparty credit risk management rules/guidelines:

  • “Asset size-based limits: The company limits counterparty exposure for certain assets to institutions with assets above a specific threshold, as defined by asset type.
  • “Ratings-based limits: The company limits the amount of allowable exposure to a counterparty by the financial condition of the counterparty, as assessed through rating agency (Moody’s, S&P, Fitch) ratings.
  • “Diversification requirements: For certain investment types (e.g., money market funds), the company requires diversification of these investments across multiple funds.
  • Credit Default Swaps (CDS): To the extent the company needs to maintain investments or cash management services at a counterparty and it results in an exposure above the allowable ratings-based limits, a CDS swap may be purchased to mitigate this risk as determined by the CFO and treasurer.”

“Escalation during observed risk events: If a bank’s credit rating falls below BBB- by S&P or Fitch and Baa3 by Moody’s, the corporate treasurer and financial risk committee will be notified.”

“Maximum cash exposure by rating. The following ratings limits exist for cash and cash investments with a maturity of two days or less. All counterparties must be rated by at least one of the three rating agencies (Moody’s, S&P, Fitch), but if rated by multiple agencies, the lowest rating is used.”

Peer 3 investment policy excerpts:

“Cash investments are placed in investment grade financial instruments (excluding BBB) to ensure safety of principal.”

“Diversification. Securities of a single issuer, valued at cost at the time of purchase, should not exceed 3% of the market value of the portfolio. The following specific portfolio holdings limitations are in effect:

  • “Finance corp. securities, including bank notes and bonds: 10%
  • “Industrial/corporate notes and bonds: 40%
  • “Commercial paper: 50%”

“Quality. Individual holdings of commercial paper must be rated A-1, P-1, or better by either S&P, Moody’s or Fitch at the time of purchase.

  • “Securities of issuers with a long-term credit rating must be rated at least A-/A3 by S&P, Moody’s, or Fitch. If a security held in the portfolio does not maintain the minimum rating specified above by one of the rating agencies the investment advisor will notify the treasurer and the security will be sold within 30 days.
  • “Asset-backed securities and mortgage-backed securities must be rated AAA.”
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Volatile Rates Spark Corporate Interest in Pre-Issuance Hedging

Multiple members have executed pre-issuance hedges in recent weeks, with many more strongly considering them.

Extreme volatility in interest rates is fueling strong interest in pre-issuance hedging among NeuGroup members who want to mitigate risk—especially those who plan to issue fixed-rate debt in 2023.

  • At the first-half meeting of NeuGroup for Capital Markets sponsored by Chatham Financial and Loop Capital Markets, members and representatives from Chatham agreed that this is an opportune time for companies to consider pre-issuance hedging, particularly using forward-starting swaps.

Multiple members have executed pre-issuance hedges in recent weeks, with many more strongly considering them.

Extreme volatility in interest rates is fueling strong interest in pre-issuance hedging among NeuGroup members who want to mitigate risk—especially those who plan to issue fixed-rate debt in 2023.

  • At the first-half meeting of NeuGroup for Capital Markets sponsored by Chatham Financial and Loop Capital Markets, members and representatives from Chatham agreed that this is an opportune time for companies to consider pre-issuance hedging, particularly using forward-starting swaps.
  • Pre-issuance hedging mitigates interest rate risk for a company’s future bond issuance by offsetting changes in the Treasury component of the bond coupon that occur between the date of the hedge and the date of bond issuance, according to Chatham.
  • “This strategy is particularly useful in volatile interest rate environments,” Chatham’s presentation said.

Volatility drives interest. “Interest rates have been significantly volatile as inflation has remained elevated, geopolitical tensions have run high, and recession fears have grown,” the presentation said. In the past year, for example, the 10-year US Treasury yield reached a low of 2.32% and a high of 4.25%.

  • And in the immediate aftermath of the collapse of Silicon Valley Bank, the US 2-year Treasury yield had its largest three-day decline in 36 years following a rapid rise in 2022.
  • “With all this volatility, we really want to lock in rates,” said one member who opportunistically entered into a forward-starting swap in mid-March.

Instrument options. Corporates primarily use treasury locks to hedge short-term risk when an issuance is expected in three to six months, and forward-starting swaps to hedge rate volatility for bond offerings that occur on a longer time horizon.

  • One member said her company had only done pre-issuance hedging on a short-term basis, primarily using treasury locks. But she has shifted recently to forward-starting swaps on a longer-dated basis “based on financings we expect to be done, but don’t actually have details on.”
  • “We know at some point we may want to be able to issue debt at attractive rates, but we’re not sure when,” another member said in agreement. “So if we have more of a window, a swap is a better instrument, even though treasury locks work better when we know when we’re going to go to market.”
  • The Chatham chart below explains how a forward-starting swap works.

A sometimes scary strategy. Another member at a corporate that issues debt up to six times a year described the difficulty of managing interest-rate risk in the last 15 months. “With rates having gone up very quickly very fast, we’ve been pre-issuance hedging since January 2022 when rates started to take off,” he said. “It’s gotten scarier and scarier the longer we’ve been doing that, and the higher rates went.”

  • The member is sticking with the strategy in part because of interest rate indicators his team built that analyze factors such as inflation and geopolitical tensions to help forecast rates. “Those indicators have been flashing bright red for about six months,” he said.

Picking your spots. In the last year, his team has focused primarily on two-year hedges, “because if rates plummet, you’re not going to get your face ripped off like if you did a five-year hedge,” he said.

  • “Our auditor is okay with us having a lot of two-year hedges on the book, but then if we’re going to issue a three-year bond, we can just apply those two-year hedges to that bond,” he said.
  • “So if you put on a lot of two-year, three-year, five-year, seven-year and 10-year swaps, all those different tenors, you can look at how the curve shifted up or down during the time from execution to unwind to see which ones you want to unwind,” he continued. “That can be a good tool that can help capitalize on interest rate volatility.”
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Driving Diversity: A Company’s DEI Scorecard for Asset Managers

One corporate uses data on firms’ racial and gender representation relative to the US Census and their peers.

A dearth of minority-owned firms that manage fixed-income assets—and a desire to hold all its asset managers accountable on diversity initiatives and metrics—led the treasury team at one NeuGroup member company with a large cash balance to develop a scorecard for diversity, equity and inclusion. The company’s treasurer shared it with peers at a recent meeting of NeuGroup for Mega-Cap Treasurers.

One corporate uses data on firms’ racial and gender representation relative to the US Census and their peers.

A dearth of minority-owned firms that manage fixed-income assets—and a desire to hold all its asset managers accountable on diversity initiatives and metrics—led the treasury team at one NeuGroup member company with a large cash balance to develop a scorecard for diversity, equity and inclusion. The company’s treasurer shared it with peers at a recent meeting of NeuGroup for Mega-Cap Treasurers.

The treasury team’s asset manager DEI quantitative assessment shows the diversity performance of 11 investment firms relative to each other and in comparison to a score based on statistics from the US Census on the representation of women and people of color. Some of the data used to produce the scorecard is public; the corporate had to request the rest from its managers.

  • The company is using the scorecard as part of a dialogue about DEI with its asset managers. The treasury team’s overarching goal is to share thought leadership on diversity with its partners, describe how the company is thinking about the issue, and discuss how the asset manager plans to make progress on its DEI strategy.

The scorecard has four categories, shown below with the weighting the corporate gives each category.

  • Leadership (33%)
  • Investment team (33%)
  • Total workforce (20%)
  • DEI policy and governance (14%)

Large disparity. The results showed—unsurprisingly—that none of the 11 firms have a DEI score equal to the representation of women and people of color as documented in the US Census. The combined average score of the managers totaled 35, versus 56 for the US Census-based score, according to the formula developed by the corporate (see figures in bold in the table below).

  • The treasurer noted the relatively wide disparity among the firms, especially in some categories. The investment team score, for example, ranged from 5 to 14, with an average of 8. That compares with the US Census-based score for this category of 19—leaving plenty of room for improvement.
  • The table compares managers against their peer group as well as the US Census across each category (and several unshown subcategories). The figures to the right of the “Weights ” column in the table show:
    • The US Census-based score for a given category as calculated by the company.
    • The manager’s score (Manager 1 as example in table).
    • The peer group average.
    • The manager’s percentile ranking within the group.
    • The minimum and maximum scores of the peer group.

Discussing the data. The treasurer told peers at the NeuGroup meeting that he discussed the scorecard results with a few of the managers—including some of the company’s largest partners—and found them “incredibly receptive.” That’s not particularly surprising, in part because the corporate represents a very large account for the firms.

  • Some asset managers asked about the corporate’s use of US Census data to calculate scores, given differences in demographics between cities and states, including talent pools and the population of college graduates.
  • The corporate recognizes the limitations of the US Census data and makes clear to partners that it views the benchmark as more aspirational; it emphasizes using the scorecard to assess the managers relative to each other.

Move money? In response to peers’ questions, the treasurer said the company will not move assets under management based on the results of this initial analysis of the firms’ scores. The goal is for the firms to show progress over time. The corporate will consider moving assets from a firm if it shows no progress over a longer period.

  • Companies that use DEI scorecards will need to figure out how to weigh the scores in the context of the return performance of a given manager, especially close partners that hold significant, sizable assets.
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Navigating Crypto’s Liquidity Crisis: Diversification is Key

A tumultuous March has shaken confidence in crypto markets’ liquidity; major players like BNY are Mellon rebuilding trust.

As the Fed addresses the ongoing crisis of confidence in the banking sector, the mostly unregulated cryptocurrency market is still reeling from the spillover effects of the collapse of Silicon Valley Bank and Signature Bank: both were active supporters of crypto market transactions.

A tumultuous March has shaken confidence in crypto markets’ liquidity; major players like BNY Mellon are rebuilding trust.

As the Fed addresses the ongoing crisis of confidence in the banking sector, the mostly unregulated cryptocurrency market is still reeling from the spillover effects of the collapse of Silicon Valley Bank and Signature Bank: both were active supporters of crypto market transactions.

  • The closure of Signature and Silvergate Bank meant the elimination of Signet and Silvergate Exchange Network—two 24/7 digital payment networks used by most in the crypto industry. Now, corporate treasuries must adapt to the new environment.
  • For treasury teams that use cryptocurrencies for payments, the events of the past few weeks have raised two concerns:
    • A lack of access to liquidity.
    • The risk of custodial overconcentration.

A liquidity squeeze. In a recent session of NeuGroup’s Digital Assets Working Group, one member discussed challenges working with crypto custody firm Anchorage Digital, which in March told him they had paused all conversion from crypto to fiat currencies. This essentially trapped the company’s crypto holdings indefinitely.

  • This member uses cryptocurrency as working capital, including to pay some employee salaries, and aims to minimize balance sheet holdings by converting any excess digital tokens into USD. Because the company keeps its crypto exposure low, it has only worked with a single custodian for crypto reserves: Anchorage.
  • While Anchorage did not provide a direct business justification for pausing conversion, the member believes it was because Anchorage banked with Signature, which is no longer servicing cryptocurrency firms after its acquisition by Flagstar.
  • “It’s been a big scare,” he said. His company’s immediate focus is to convert everything it can back to dollars but “there’s just no liquidity right now.”
  • “The lack of other conversion options is really throwing sand into the face of crypto,” he said. “It’s supposed to be open, decentralized and deregulated, but if you can’t swiftly move your money into an asset and take it back, then what’s the point?”

Unleashing trapped cash. “It’s just like what other corporates face with trapped cash in China, it’s the same thing,” the member said. “Should this have occurred? With proper risk management, I don’t think so.”

  • He is now looking for other brokerages to take the company’s crypto and do the conversion. But KYC and due diligence won’t be a quick process.
  • Over the long-term, the member’s team is working to improve forecasting to minimize its crypto exposure—a tall order.
  • “Like any new business, it’s very difficult to forecast that because we don’t know what kind of products we’ll be dropping in three to six months that are supposed to generate crypto revenue,” he said. A better forecast would allow the company to use that revenue to make future payments.
    • “But we’re not the business unit that does planning and analysis. I’m just treasury, and there’s a bit of a disconnect,” he said.

Diversification. One member who works at a crypto-native company that deals with digital assets as a regular part of its business said that having a single custodian increases liquidity risk substantially. It’s therefore crucial for treasury to have a diverse crypto-custody infrastructure.

  • “We can’t just all wait until these banks fail, we need to find more partners, and more diverse partners,” she said. “You need to put extra scrutiny on these banking partners now.”
  • But she added that there are only so many banks that are working with corporates in the crypto space. Her strategy is to open accounts with every bank that’s willing to work with her company, and then let the treasury team figure out how to divvy up its assets.
  • “Utilizing a bunch of different banks and making sure we’re sweeping excess balances and tracking credit metrics of institutions is the best we can do.”

A silver lining. The liquidity crisis is not without an upside. Major banks such as BNY Mellon are fast-tracking their engagement as custodial banks and crypto transaction enablers.

  • The member who works at a crypto-native firm said the company has been looking to open an account with a bank “only tangentially related to crypto” like BNY Mellon—though KYC may be a long road.
  • Matt Thomas, who leads NeuGroup’s Digital Assets Working Group, said, “Six months ago, BNY Mellon was kicking the can down the road because there was so much competition.” He added, “I think the silver lining of all this is it has brought BNY Mellon into the use case for real, which lends legitimacy to the crypto use case for corporates.”
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DIY with RPA: A Tool Removes the Pain of CSA Collateral Exchange

UPS and Coca-Cola describe automation solutions they made using UiPath to cut time exchanging cash, reconciling.

Artificial intelligence and machine learning may ultimately be major forces in the digital transformation of finance orgs. Right now, though, more NeuGroup members are bringing the future forward and scoring wins with robotic process automation (RPA) solutions that can relieve the pain and drudgery of manual processes that take way too much time.

  • To wit: two members of NeuGroup for Mega-Cap Assistant TreasurersUPS and Coca-Cola—recently explained how they used RPA software from UiPath to build bots that have slashed the time required to manage the collateral exchange process for credit support annexes (CSAs) from hours to minutes.

UPS and Coca-Cola describe automation solutions they made using UiPath to cut time exchanging cash, reconciling.

Artificial intelligence and machine learning may ultimately be major forces in the digital transformation of finance orgs. Right now, though, more NeuGroup members are bringing the future forward and scoring wins with robotic process automation (RPA) solutions that can relieve the pain and drudgery of manual processes that take way too much time.

  • To wit: two members of NeuGroup for Mega-Cap Assistant TreasurersUPS and Coca-Cola—recently explained how they used RPA software from UiPath to build bots that have slashed the time required to manage the collateral exchange process for credit support annexes (CSAs) from hours to minutes.
    • CSAs define the terms of the collateral put up by counterparties in derivative transactions and are used by many corporate risk managers as part of hedging programs for interest rates and currencies.
  • ATs at UPS and Coca-Cola responded in NeuGroup’s online community to a peer asking about technology solutions to manage daily exchanges of collateral and reconcile differences with banks—which in his case number 20. Reval is this company’s TMS—the same system used by UPS and Coca-Cola.
  • The member then organized a follow-up Zoom meeting that, in addition to ATs, included the individuals at the two companies who used UiPath to build the bots. Both companies are willing to help other corporates navigate the RPA landscape as they look for solutions to automate the collateral exchange process.
    • “We love the sharing of ideas, so keep it coming,” said the Coca-Cola AT in agreeing to answer any questions peers have about developing their own RPA tools. The AT at UPS echoed that sentiment.

The problem. “The daily management of our collateral exchange process with the banks is operationally burdensome,” the AT in search of a solution wrote. “Each day, we need to open 20 emails from banks and hand key the banks’ [mark to market] on derivatives into spreadsheets in order to compare it to our internal valuations. When there are discrepancies, the reconciliation process is very manual,” he explained.

  • The AT said this manual process can take more than two hours a day. “It’s not a particularly rewarding process or daily responsibility,” he added.
  • The company has looked into third-party outsourcing options but found them expensive. Another drawback: treasury would still be required, daily, to provide all its derivatives positions to a third party to calculate valuations. And it would still have to do all reconciliation itself.

Investing time to save time. The manager in UPS’s treasury technology group who developed its bot said the daily, manual collateral exchange process that used to take humans between 90 and 120 minutes now requires just three minutes of automation. (See next section for a description of the automated process at UPS.)

  • The manager, who had prior experience using UiPath, said it took about three months to get this RPA tool up and running. That included discussing the bot’s purpose and controls with the treasury team and then developing and testing it. Auditors did a code review to ensure the bot met the company’s security standards.
  • UPS has been using the bot for more than a year while Coca-Cola’s bot has been working since before the pandemic. UPS uses an enterprise version of UiPath and received licenses through the company’s RPA center of excellence team. Coca-Cola, meanwhile, built its bot using a free, desktop version of the software.
  • After hearing about the development process and the time savings, the AT in search of a better way for collateral exchange said, “It sounds like you’ve both found a really great solution. And if three months of effort is what it takes to put in place, it’s absolutely worthwhile, especially given that the upfront and ongoing cost seems modest to negligible.”

How it works at UPS. The AT at UPS offered this overview of the improved collateral exchange process: “The bot extracts the data from our TMS (Reval), extracts the attachments from the bank emails, does the math on the expected settlements in either direction, and sends the summary to the members of the team that need to input the wires or validate receipt.” The UPS treasury technology manager elaborated on how the bot interacts with Reval:

  1. “The first instance is the bot pulls a prior day bank statement from the system and stores it for audit purposes. It is used to validate that the planned collateral settlements from the prior day actually occurred and were recorded by the bank. This statement pull is the first thing that happens in the bot process.
    • “In order to get this bank statement, the bot logs into our Reval using an ID we created specifically for the bot. It navigates to the “Statement” screen in Reval and selects a pre-created report from a dropdown list. From there, it will open and then download the statement into a daily folder that the bot created.
  2. “The second instance is a few steps later, but still early in the process. In this case, the bot doesn’t actually log into Reval; instead, it grabs an email that was sent by Reval. We have set up an automated email from Reval that sends our daily Fair Value Report, which contains all of our outstanding trades and their valuations.
    • “The bot will pull this report from email, then copy and paste the entire Fair Value Report into our main [Excel] file that does all of the math mentioned before.”
  3. The bot will build an email template, create a PDF from it and send the margin call information to the bank on UPS’s behalf. Then the process reverts to the treasury team to take any necessary action. The bot does not make payments—UPS wants to keep human eyes on that.
  4. While the bot runs, it creates its own audit trail and validation, the manager said. It flags any difference between a bank’s reported mark-to-market number and the UPS figure that exceeds $1 million. That or any other issues the bot encounters are highlighted in red and sent to the treasury team to review manually.

The hardest part. The tech manager said because each of UPS’s banks has a unique file format, he had to build a specific automation to read each individual file. “That was probably the hardest part of the process,” he said. Also, some banks change their formats occasionally, which causes problems for the bot. UPS employs an exceptions process when this occurs, he said.

Coca-Cola’s twist. Like UPS, Coca-Cola’s bot inputs numbers into a main Excel file which shows daily valuations, collateral balances and daily movements with counterparties. The business data and visualization analyst at Coca-Cola who designed the bot said the process is almost identical to UPS’s. One difference: Coca-Cola also uses Power BI.

  • “We connect this file to Power BI to show a few reports,” he said. That may include how much collateral is held by each counterparty, how much money will be moving the next business day or the collateral balances of various CSA agreements. “This gives us the ability to reconcile daily instead of monthly.”

Follow the leaders? One AT on the call whose company pays a third-party to manage the collateral exchange process liked what they heard about the RPA solutions UPS and Coca-Cola built using UiPath.

  • “It’s definitely an intriguing concept that we will investigate further,” they said. “Any change would involve meaningful evaluation, planning and coordination–so not necessarily easy.”
  • The AT whose question prompted the Zoom call said this: “We see it as a good, viable solution for our situation and intend to pursue it further.”
  • The good news is that RPA leaders among NeuGroup members are willing to share what they can with other corporates facing the same collateral exchange challenges. “If you have the same banks and have the same formats, you may be able to leverage some of the stuff we already have,” the UPS manager said. “I do think there are places where we would be able to share and help speed along the process.”
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