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Cash Management of Tomorrow
PwC’s Global Treasury Benchmark Survey 2019, Digital Treasury – It takes two to tango1
Agenda
Cash Management IT Architecture, Insights from PwC on data and systems in Cash Management2
Cash Management Solutions, SAP Integrated Cash Flow Forecasting Solution by Serrala3
Cash Management Solutions, Kyriba’s Cloud solution to integrate and improve Cash Flow Forecasting4
Cost savings in Cash Management, PwC’s BankLab6
Closing remarks, Questions and discussion7
Break
Break
Tapas and network 16:30
15:30
14:20
14:40
15:05
13:30
13:55
15:50
16:15
22.08.2019
Digital adoption An all-encompassing digital ecosystem is enabling better decision-making, but obstacles remain
Digital Treasury – It takes two to tango 2019 Global Treasury Benchmarking Survey
Cash Management of Tomorrow2019-08-22
Confidential Information for the sole benefit and use of PwC’s client
Benchmarking : Population
29%
20%10%
16%
10%
15%
World (full population) World Peer Group
240 Companies
Average Revenue
9,02 B EUR
Nordic Peer Group
25 Companies
Average Revenue
3,36 B EUR
28%
20%
12%
20%
4%
16%
Nordic population
# of Operating Countries
3
Confidential Information for the sole benefit and use of PwC’s client
Benchmarking : Digital trends
6%
11%
19%
22%
12%
26%
28%
24%
22%
24%
17%
26%
32%
17%
14%
8%
29%
22%
22%
20%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Blockchain
AI
RPA
Data Analytics1. Highly relevant
2. Relevant
3. Somewhat relevant
4. Not relevant
5. I do not know
How relevant are digital technologies for treasury in the next 2 years?
0% 10% 20% 30% 40% 50% 60% 70%
Working Capital
Liquidity management
Exposure Forecasting / AnalysisData Analytics
AI
RPA
Blockchain
Can you see that this technology is relevant for cash management?
4
Confidential Information for the sole benefit and use of PwC’s client
Benchmarking : Average number of FTEs by Area of Focus
“Other” activities include: Investor Relations, Working Capital Management, Trade Finance, Accounting, M&A support
Companies operating in many countries typically have more staff than others but their distribution of activities is very similar, with the exception of some reliance of Cash & Liquidity resources locally.
Only 10 companies out of 172 with revenue over €1.0 bn - operates with less than 5 treasury team members
0 2 4 6 8 10 12
Pensions
Insurance
Treasury IT
Corporate Finance
Risk Management
Other
Cash & Liquidity Management
World 29 FTENordics 25 FTE
5
Confidential Information for the sole benefit and use of PwC’s client
Benchmarking : Distribution of Treasury Activities by Location
A majority of companies centralize activities at Corporate HQ
“Other” activities include: Investor Relations, Working Capital Management, Trade Finance, Accounting, M&A support
Treasury IT activities are often handled in HQ.
0% 20% 40% 60% 80% 100%
Other
Cash & Liquidity Management
Risk Management
Insurance
Pensions
Treasury IT
Corporate Finance
FTE per treasury activity by location
“Other” locations include: IT
Companies often rely on local treasury resources for cash & liquidity management
6
Confidential Information for the sole benefit and use of PwC’s client
Benchmarking : Location of treasury activities (world)
The graphs to the right indicates the percentage from the peer group that has oversight or execution in a specific location.
Both the oversightand execution are on average done in more than one location
0% 20% 40% 60% 80% 100% 120% 140%
Commercial payments & collection
Cash flow forecasting
Cash & liquidity management
Bank account management
Internal funding
FX risk management
External funding
Treasury activity oversight
0% 20% 40% 60% 80% 100% 120% 140% 160% 180%
Commercial payments & collection
Cash flow forecasting
Cash & liquidity management
Bank account management
Internal funding
FX risk management
External funding
Treasury activity execution
7
Confidential Information for the sole benefit and use of PwC’s client
Benchmarking : Additional areas of focus for treasury
Treasury often focuses on areas beyond the (traditional) cash and risk management activities.
The graph to the right indicates the percentage from the peer group in the Nordics that focus on other areas particular M&A support outside of cash and risk management.
0% 10% 20% 30% 40% 50% 60% 70% 80%
Others
Tax
Commodity price risk management
Pension fund management
Enterprise risk management
Commercial credit risk
Insurance
Working capital management
Accounting for derivatives
Trade finance
M&A support
World Nordic
Both these areas has a growing focus from treasures due to their contributions to balance sheet management
8
Confidential Information for the sole benefit and use of PwC’s client
Potential gain
Benchmarking : Cash Forecasting
• Manual: largely manually collected and consolidated
• System/Interfacing supported: supported through a proper CFF system with a data feed from the relevant sources
• Integrated: Integrated with other planning processes with sophisticated simulation capabilities
• Driver-based and predictive: pre-populated leveraging statistical analysis and built based on main drivers
0% 20% 40% 60% 80% 100%
Short Term
Mid Term
Long Term
Cash Forecasting (Nordic)
0% 20% 40% 60% 80% 100%
Short Term
Mid Term
Long Term
Cash Forecasting (World)
For both mid and short term we are ahead in the Nordics
9
Confidential Information for the sole benefit and use of PwC’s client
Benchmarking : Number of Systems
Treasury departments often rely on multiple technology systems to manage treasury
processes.
Companies with revenue less than € 5 bn has on average 3,5 treasury systems, while higher
revenue companies on average has 5 treasury systems.
Companies with a lower number of systems often rely heavily on spreadsheets.
Average number of unique treasury systems in use
8.2%
20.5%
19.2%
17.8%
15.1%
12.3%
4.1% 2% 1%
1
2
3
4
5
6
7
Treasury systems refer to systems including: TMS, FX trading, Confirmation Matching, Valuations, Netting, Payment Factory, Investments, BAM, etc.
8 9
10
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Benchmarking : System Satisfaction
Treasury technology has its pros and cons.
The chart to the right indicates the average system satisfaction on a scale of 0 (low) to 10
(high) by treasury system area of focus.
The lowest satisfaction scores are with systems used for bank account management, bank fee analysis, regulatory reporting, and
treasury reporting.
Companies are often taking reporting into their own hands and are leveraging BI tools to aggregate reporting elements to meet the
needs of key stakeholders.
Systems Satisfaction
5
6
7
8
9
11
Confidential Information for the sole benefit and use of PwC’s client
Benchmarking : Banks by treasury activity
Note: Averages by function contain all companies which indicated at least 1 bank in at least 1 function
0,002,004,006,008,00
10,0012,0014,0016,0018,0020,00
Cash Management,MMF, Repo
RCF/Loan facilities FX and Interest RM LCs & Guarantees Working CapitalSolutions
Other lendingrequirements
Number of banks per treasury activity
World Nordic
Considering a similar distribution of operation countries an almost 50% increase in number of banks in the World peer group compared to the Nordic peer group, is surprising. That begs the question: Is the bank wallet spread enough in the Nordics? Or is it a sign that the Nordic corporates has a more optimised bank setup?
12
Confidential Information for the sole benefit and use of PwC’s client
Benchmarking : Cash pooling & visibility
Nordic companies have on average 84% of their cash visible on a daily basis and
has higher optimized liquidity than the world peer
group.
Most corporates use cash pooling structures and in the Nordic on average 89% have
cash pooled daily.0% 20% 40% 60% 80% 100%
Pooled/total poolable cash
Visible daily
Pooled daily
Nordic
World
13
Confidential Information for the sole benefit and use of PwC’s client
Benchmarking : What are the most important criteria when selecting a banking partner?
When selecting banking partners,
treasury uses common criteria,
including: Participation in
credit/funding, bank capabilities,
history/relationship, and cost of services
Frequency of Bank Review of especially secondary banks are
lower in the Nordics.
0% 20% 40% 60% 80% 100% 120%
Participation in credit/funding of our organisation
Bank capabilities
Cost of bank services
History/Relationship
Banking strategy & wallet sharing
Efficiency for our organisation
Matching footprint (relative to role)
Credit rating / counterparty risk
Innovative banking solutionsNordics
0% 20% 40% 60% 80% 100% 120%
Participation in credit/funding of our organisation
Bank capabilities
Cost of bank services
History/Relationship
Efficiency for our organisation
Credit rating / counterparty risk
Banking strategy & wallet sharing
Matching footprint (relative to role)
Innovative banking solutionsWorld Important criteria for the selection
Not a focus in the Nordics
Potential focus in the Nordics
14
Contact us
Sebastian di PaolaCorporate Treasury Solutions,Global and EuropePartner, PwC [email protected]+41 58 792 9603
Eric CohenCorporate Treasury Solutions, AmericasPrincipal, PwC [email protected]+1 646 471 8476
Ian FarrarCorporate Treasury Solutions, Asia PacificPartner, PwC [email protected]+852 2289 2313
Please visit our Corporate Treasury Solutions team page for additional contact information.
www.pwc.com/corporatetreasury
© 2019 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 158 countries with over 250,000 people who are committed to delivering quality in assurance, advisory, and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com. 571027-2019 LL
Niels LarsenFinancial ServicesPartner, PwC [email protected]+45 2022 2033
Casper BorlyCorporate Treasury SolutionsFinancial ServicesDirector, PwC [email protected]+45 2098 6820
