Wanted: Visionary treasurers to execute

Recently, I was in Ireland visiting my extended family in the beautiful and rugged West Cork coast. By luck and good fortune, we were decamped at a cousin’s place in Kinsale for five uninterrupted days of sunshine and balmy temperatures; practically a record for the town.

Kinsale has transformed itself into the gourmand capital of Ireland, a title richly deserved, for, if there is a creamier butter or better prime beef anywhere on earth I’ll want to know where. O’Hara’s stout left Guinness for dead just quietly, but we don’t want to start that particular argument do we.

Sitting for lunch at a seafood restaurant the Menu had on its opening page the phrase “It was a brave man who ate the first oyster”. The wry humour and profundity of this statement struck me as such a clean fact of history. Did such a courageous act by either man or woman spark the commencement of the wonderful and ongoing culinary curiosity that we are blessed to enjoy down the centuries?

Who took it upon themselves to step into the breach and declare I’ll be first! I’ll step up and expand my palate and usher in another dietary delight that forever more generations after me shall benefit from my decisiveness and vision.

Oh, visionary Treasurer wherefore art thou?

Where are the treasurers who will step up and instigate blockchain driven Trade Finance platforms’ to irrevocably change how the balance sheet is managed and articulated?

Treasury can be a tough gig. It can still be viewed as a cost centre processing and balance sheet calculating operation, mostly always understaffed and usually at the back of the line when it comes to budget allocation for investment.

If you are a treasurer of a larger global corporate, you may sometimes feel there is an insider yet outsider vibe as you interact with the various divisions you serve. You have some influence but not decisively so in their strategic planning.

Having dealt extensively with both Procurement and Treasury functions over many years I have an ongoing debate with myself as to when they will eventually merge and which of those two functions will emerge in the driver’s seat. Will it be the “it’s my supply chain” view from Procurement or “it’s my balance sheet” view from Treasury?  Both views are valid and invalid when viewed from the new technology paradigm that exists today.

If artificial intelligence (AI) is starting to automate procurement decisions for MRO or commodity items and AI can be applied to FX hedging activity as an example, then neither Treasury nor Procurement can argue its case effectively based on their functional responsibilities as they stand today.

Several forward-thinking treasurers I have discussed this scenario with sum the challenge up succinctly. For them it is all about remaining relevant to their internal customers and invigorating the Treasury function by implementing blockchain and associated technologies to enhance that relevance. Either you take an active approach to leveraging available technologies such as blockchain and Trade Finance delivered as a platform, or you remain boxed in as the bank account opening department and FX hedge provider, important enough tasks but ultimately irrelevant as automation technologies solves the “how”.

It may well be that as a Treasurer you work in a conservatively minded corporate environment, however separating a conservative view of how you set up and manage your balance sheet should not be cover for manual and outdated gathering, processing and analyzing of vital balance sheet data.

With no disrespect to the Procurement function, the essential essence of commerce in all commercial activities in every corporate is ultimately reflected in its balance sheet; in how working capital is optimized, sourced, made available and managed to support the corporate activity.

To become the trusted balance sheet manager and advisor with influence and a real seat at the table lies primarily with the Treasury function. This new infinitely more significant role can only be designed on the back of Trade Finance delivered as applications on a distributed platform backbone.

It does not however come as a divine right just because the treasurer owns the balance sheet today. It comes through actual experience in the technology and harnessing what is most definitely the new “now” frontier. Irrefutably truthful data and analysis of that data to gather more accurate insights in order to better advise your internal divisional clients is the new currency, not function and process.

It’s all up for grabs as the game starts in earnest. Sooner rather than later the Treasurer will have to step up and eat that first Oyster, make that foray into redesigning Treasury or be redesigned by other Corporate functions who are awake to the new possibilities.