Trésorier/Treasurer magazine - N°91 - Oct/Nov/Dec 2015 - (Page 48)

CORPORATE TREASURY IN THE DIGITAL AGE - IT'S ABOUT CONNECTED TECHNOLOGY, WITH MANAGED DATA AND ANALYTICS FOR INFORMATION, RISK MANAGEMENT AND TRADING. LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE - N°91 - OCT / NOV / DEC 2015 Many treasurers are facing a large administrative burden combined with seemingly never ending regulatory changes. The requirement for trusted information, not just real-time data, has become obligatory in order to effectively manage risk on behalf of the organisation. But it is not as simple as plugging in a new platform. 48 The twin themes of risk mitigation and regulation have been the chief pain points for corporate treasurers. Accessing the core information is critical for a modern treasurer. There is an abundance of raw data, from multiple sources, and it is important to be able to pull this together with speed and accuracy. There is a clear difference between data and information, and this lies at the heart of the digitisation issue. Regulation - A Constant Change Regulation is one of the most rapidly changing influences on the corporate treasury, particularly complying with Dodd-Frank, EMIR and MiFID at this time. Compliance requires constant monitoring and is a significant administrative burden. Changes in regulation can have a significant impact on risk management for the treasurer. For example, the implementation of Basel III has put pressure on bank balance sheets and this has seen less liquidity in the FX market to absorb risk. This impacts not only the banks, but also any market participant. Similarly, non-deliverable forwards (NDFs), a common option amongst corporates doing business onshore in some emerging markets, are now subject to trade over a regulated venue. As a result, the liquidity in this market has also diminished, once again increasing risk. To mitigate against these risks, treasurers need robust and accurate systems that, traverse business functions, offer flexibility and are administered using only limited IT resources. This allows for a rapid response to any changes that may be required at a future date. Today's systems need to be easily understood and simply updated by the users themselves, who best understand the business requirements. Deploying Technology for Information, Risk Management and Trading There is now a proliferation of raw data from around the world that a corporate treasury function can access. However, in isolation, this data is virtually useless and often out of date. Data needs to be amalgamated, have a common format and be transformed into real insights, for it to be used to make informed and timely decisions by the corporate treasury. For a corporate managing its FX risk Thomson Reuters publishes a number of sources of information and analysis that sit squarely in this space. Its liquidity heat-maps, for example, highlight precisely what liquidity is available in the FX market at any given point in the day. Updated every 30 minutes for every venue on the platform, and with analysable historical data, this can guide when might be best to trade in terms of available liquidity. Similarly, the SDR (Swap Data Repository) Views service analyses and simplifies the almost-impossibleto-analyse reams of public domain data on due expiry dates for every FX option traded and reported to The Depository Trust & Clearing Corporation (DTCC). A sizeable expiry that is exercised will impact market liquidity because it will absorb some of the available liquidity, especially if that liquidity is already constrained. Knowing this enables a corporate treasury to improve its FX strategy. It is widely acknowledged that using a multi-lateral trading network gives access to more counterparties, diversifies liquidity, creates a competitive environment and opens more avenues to trade when liquidity is tight. For over a decade now corporates have seen the benefits of using technology to simplify their FX trading and confirmations processes. The efficiencies of online trading have been discussed many times, but perhaps one of the biggest benefits for the corporate treasury is in Straight-Through-Processing (STP). Many corporate clients use platforms like FXall from Thomson Reuters to route all transaction lifecycle data to their preferred TMS for booking FX trades, valuing and running the mark to market on their FX positions. All of this is fully integrated and automated in real time, providing the right information at the right time, in order to manage FX risk. Multi-bank platforms such as FXall can also deliver valuable management information (MI), providing a running commentary on essential functions such as how well a counterparty fills trades across the range of currency pairs or a scorecard on the performance of your banks. If a company needs to urgently offset a position, it needs to know who it can work with. The MI is derived post-trade but is vital for pre-trade intelligence.

Table of Contents for the Digital Edition of Trésorier/Treasurer magazine - N°91 - Oct/Nov/Dec 2015

Table of contents
INTERVIEW Ben Poole Editorial Services
To What Extent Should Treasurers’ Activities be further centralized?
Capital Markets Union (CMU)
Upsurge in fraud
CEO impersonation
Using analytics to cope with uncertainty and volatility for treasury
IFRS 9 : Nécessite d’une reorganisation bancaire majeure
Taux zéro : de nouvelles stratégies pour un nouveau monde
Investing surplus cash in repos
Warranty & indemnity insurance
Making the switch from Excel to a Treasury System
Corporate treasury in the digital age
Fini le casse-tête des paiements internationaux pour les entreprises !
Bank Independent Cash Pooling
Gérer l’offre de retraites : un choix complexe pour l’entreprise

Trésorier/Treasurer magazine - N°91 - Oct/Nov/Dec 2015