TOMATO CATCH-UP - Newsletter Issue 192 – May 2016
Your monthly resource on working capital, process optimization and issues relating to the world of corporate treasurers, IT professionals and bankers!
This newsletter is multi-lingual, English, German and French depending on the source.
Based on press releases over the last few months, Switzerland’s economic outlook is positive. For us at Tomato, we too see a robust recovery since a slump slowed down many corporates last year. Companies are looking for help with reworking their treasury policies, evaluating their TMS or implementing one, optimizing bank relations, payment flows, refinancing etc.
For such issues or any others you’re facing and would like to discuss with someone outside your company who has experience from working with a wide array of clients, feel free to contact martin.schneider@tomato.ch or 044 814 2001
Enjoy the variety!
Regula Spottl
Topics
- Videocast on Payment Gateways Part 2
- Key Principles for Optimizing Working Capital
- The Power of Social Media
- Eigenkapital der Schweizer Grossbanken ist risikoreich
- St. Galler Forum für Finanzmanagement und Controlling am 17. Juni 2016
- One Fides Community Conference, 23. Juni 2016
- PBOC Asks Multinationals to Limit Yuan Sent out of China
- Blockchain: ein aktuelles Thema
- Basel IV: Next Hurdles – How to Prepare
- Cybersecurity: Plan for Treasury Organizations
- From Regula’s Desk: The Role of Corporate Activism to Force Public Policy
Videocast on Payment Gateways Part 2
After our last month’s videocast, where Martin Schneider explained the advantages of payment gateways and what they involve, treasurers wanted to know the cost of such a project.
From among the various questions readers posed, the most frequent comment was: Isn’t Swift expensive? Martin’s answer: “Look at it this way! If you buy a Mercedes and use it only to drive to the bakery, it’s expensive. It’s the same with payments. Payment gateways that involve all payments group wide and are used for letters of credit and/or guaranties really are the optimal solution. If your company uses letters of credits and/or guaranties, these processes can also be automated directly to your ERP. Therefore additional savings are guaranteed.
In the videocast part 2, Martin talks about one-time project cost as well as recurring cost. He uses the cost of two projects he helped with in 2015 to demonstrate. Now in 2016, another project confirms that his 2015 estimation is correct. Gain transparency at headquarter, reduce possible fraud at the local e-banking, improve financial flows process throughout the group, and gain an improved workflow with the internal control system.
Watch and listen to Martin Schneider's videocast (time 3:13 mins).
As additional information: Discover the advantages of making group-wide local payments via a decentralized payment factory on our website as PDF.
Also, IBM published a white paper Faster payments: Three steps to a modern commercial payments system - How banks and financial institutions can streamline payment processing for greater visibility, agility, compliance and operational efficiency.
Key Principles for Optimizing Working Capital
Optimizing working capital (OWC) is one of our core competencies. Over the years, we have developed some basic principles that we follow when working with companies on their effort to optimize their working capital. In 2014, we came across the Treasury Today article Optimising working capital: top ten tips and fine-tuned our principles to create a checklist for our clients. Now, two years later, we reviewed and fine-tuned the list once more. Here’s our latest list of principles that guide an effective OWC strategy:
- The WCO effort must involve the company’s entire management at home and worldwide.
- Specify what you are measuring with what tool and describe the goal.
- Any actions to boost quarter- or year-end performance will backfire. Don’t do it.
- Monitor DSO, DPO and DIO with performance and risk indicators and manage the findings.
- Never stop focusing on working capital even when there seems less need or if there’s a crisis.
- Do not direct all hopes on ERP implementation. Focus on processes and smooth workflows.
- Ensure that suppliers and customers collaborate with your supply chain efforts.
- Offer added value to suppliers via supply chain finance. The prolongation of payment terms is not a value. It's a poor excuse for not establishing new processes.
- Make credit management a big part of your strategy and implement it.
- Ensure that forecasting techniques include intelligence from all relevant business segments and offer an easy process to gain transparency.
- Include all aspects of the whole financial supply chain.
Loosely based on Optimising working capital: top ten tips
The other day, we were reminded of the power of social media when Martin got more than 30 congrats on his LinkedIn page for Tomato’s 24th anniversary. Thanks again to the LinkedIn family for their interest in us! LinkedIn offers a great way to stay in touch with colleagues, clients and the business community. If you are not connected with us yet, do so via Martin’s LinkedIn page…
In addition to LinkedIn, Martin uses XING for German contacts and the market. If you are on XING, check his profile and activities and connect with him.
Another tool we frequently use is Twitter: Our contacts’ tweets offer information for the newsletter and we post news almost on a daily basis. See our posts… and follow us! We’re happy to link with you too. Just send us your handle!
Eigenkapital der Schweizer Grossbanken ist risikoreich
2008, die grosse Wirtschaftskrise, von der besonders Grossbanken stark betroffen waren und z.T. von Schweizer Steuerzahlern gerettet werden mussten. Ein Grund für die Krise waren die riskanten Bankgeschäfte, die nur unzureichend mit Eigenkapital abgesichert waren.
Im Blog des IFZ Risikoreiche Eigenkapitaldeckung bei Schweizer Grossbanken berichten Patrick Balmer, Prof. Dr. Stefan Hunziker und Stephanie Blättler,vom Institut für Finanzdienstleistungen Zug IFZ über die aktuellen Entwicklungen im Bereich der Eigenkapitaldeckung bei Schweizer Banken. Sie zitieren Recherchen, die ergeben haben, dass das Vorgehen der Risikoberechnung ein erhebliches Problem ist.
Während Inlandbanken Standartrisikoansätze benützen müssen, dürfen die UBS und CS ihre Absicherung für die jeweiligen Geschäfte mit eigenen Risikomodellen rechnen.
Der Basler Ausschuss für Bankenaufsicht BCBS untersuchte weltweit Banken, die ihre eigenen Modelle verwenden um die Risiken zu berechnen. Der Ausschuss stellte eine grosse Differenz zwischen den tatsächlichen Zahlungsausfällen und den bankinternen Berechnungsmodellen für Kreditausfälle fest und legt daher eine Anpassung der Modelle nahe. Details…
Ein weiterer IFZ Blog zum selben Thema: Eigenkapitalquoten der Schweizer Banken im historischen Kontext
St. Galler Forum für Finanzmanagement und Controlling am 17.6.2016
Das St. Galler Forum für Finanzmanagement und Controlling findet zum zweiten Mal statt.
Datum: 17.6.2016 den ganzen Tag
Ort: FHS St. Gallen
Kosten CHF 520.-
An dieser Fachtagung beleuchten Referierende aus Praxis und Wissenschaft diese Themen:
- Transfer Pricing - neue Herausforderungen stehen an?
- Der Bankkredit könnte bald ein Relikt vergangener Tage sein?
- Ist ein Jahrhundertprojekt wie die NEAT finanziell steuerbar?
- Exportrisiken: Wo bleibt der Staat, wenn der Markt versagt?
- Aktionäre sind Botschafter der Unternehmung
- Die Grenze zwischen Wissensvorsprung und Insider
Diese Themen sind für uns Finanzfachleute interessant. Leiten Sie allenfalls diese Information intern weiter.
Flyer mit Details über die Themen, Referierende, Kosten, Anmeldung
One Fides Community Conference 2016 in Zurich, 23.6.2016
The purpose of this conference is to discover new ways to innovate your treasury operations as you learn from experts and converse with fellow treasury professionals.
Topics include for example:
- Global Treasury – the challenges in digitalization: Martin Walder, Fides Treasury Services AG
- Fintech in Treasury: Thomas Ankenbrand, Institute of Financial Services Zug IFZ, will give an overview and analyses the influences on the future of treasury.
- Three years after – Lessons learnt on a Treasury Project. Autoneum will present the experience and lessons learnt from their project started in 2012. Tomato was part of that project. See in our newsletter Oct. 2015 Example of Payment Factory Implementation
Date: June 23, 2016
Time: 09:30 - 15:00
Location: Forum St. Peter, St. Peterstrasse 19, Zurich
Language: English
More details will follow on the Fides Website…
PBOC Asks Multinationals to Limit Yuan Sent out of China
On January 19, 2016, the People's Bank of China told banks that provide yuan cash-pooling services to multinational corporations not to send more funds overseas than they bring in.
The banks are told to do this through "’window guidance’ – a regulatory practice in which the central bank tells financial institutions what to do and expects them to follow the order, even though the requirements are not mandatory,” according to an article in CaixinOnline.com, a premier publication covering business and finance in China. Details…
Ziehen Sie deutsch vor? Dann finden Sie Details in Der Treasurer Artikel “Die Rückkehr des Trapped Cash in China: China beschränkt auch Dividendenausschüttungen / Viel Unsicherheit”.
Laut Artikel benötigehinesische Tochtergesellschaften, die mehr als 50 Millionen US-Dollar Dividende an ihre ausländische Mutter ausschütten wollen, die Zustimmung der Devisenbehörde SAFE Schanghai.
Details: Der Treasurer Ausgabe 9 | 4. Mai 2016, Seite 3
Blockchain: ein aktuelles Thema
Zuerst machte Bitcoin Schlagzeilen, aber nicht im Sinne, dass das den Geldverkehr radikal beinflusst. Nun häufen sich Artikel über Blockchain (crypto Technologie für Währungen wie Bitcoin, Ethereum, NXT etc).
Im Artikel Blockchain als Gefahr für die Finanzindustrie schreibt Computerworld.ch, eine Studie weise grosse Effizienzgewinne auf. Zeit für Banken, über das Potential der Blockchain-Technologie für Finanztransaktionen auf dem Laufenden zu sein.
Die beiden folgenden Berichte sind für uns Finanzfachleute ein guter Anfang, sich Grundlagen anzueignen.
- Der NZZ Artikel Herausforderung für Banken und den Staat: Blockchain – der nächste Wohlstandsschock stammt vom Bänker Konrad Hummler, ex-Teilhaber der Privatbank Wegelin und Verwaltungsratspräsident der NZZ. Hummler betont: “Blockchain ist mehr als eine digitale Technologie. Es ist ein System, das die Chance bietet, Eigentumsverhältnisse viel einfacher und günstiger zu sichern und zu ordnen. Das wird Konsequenzen haben.” 44 Personen haben auf den Artikel geantwortet und die einige der Antworten sind mindestens so informativ wie der Artikel.
- In the McKinsey Report How blockchains could change the world, Don Tapscott, coauthor of the new book Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World, explains “why blockchains, the technology underpinning the cryptocurrency, have the potential to revolutionize the world economy”. Tapscott thinks that the technology can offer real privacy protection and “a platform for truth and trust.”
Interessant! Der Stadtrat von Zug hat an einer Sitzung am 3. Mai beschlossen, “Bitcoins für Leistungen bis 200 Franken als Zahlungsmittel zu akzeptieren. Er will damit für Firmen der digitalen Finanzbranche in der Region Zug ein Zeichen setzen.” Website Stadt Zug: «Crypto Valley» reicht neu bis ins Stadthaus”
Basel IV: Next Hurdles – How to Prepare
Two specific measures from among the long list of changes the Bank for International Settlements (BIS) is planning are the focus on practitioners. (1) the standardized approach for measuring counterparty credit risk exposures (SA-CCR); and (2) the fundamental review of the trading book (FRTB).
In the GTNews article Basel IV: Get ready to clear the next hurdles, Nicola Hortin, head of the regulatory analysis team at AxiomSL, explains what these two regulations are and the best strategy for implementing them.
Encouragingly, Hortin suggests that “by thinking strategically about the entire suite of reforms now and by using flexible calculation technology, banks can adapt smoothly and efficiently to the new regulatory regime.” Full story…
Cybersecurity: Plan for Treasury Organizations
As digital innovation grows, so do cyber attacks. Articles on cyber security usually explain the growing risk of cyber attacks made worse by the growing complexity of technical solutions, which increases the challenges of keeping each IT landscape secure.
They explain that cyber criminals typically focus on static data and transactional flows with payments being conducted via “electronic trading platforms and accessing online banking tools or SWIFT Access.”
The value of the GTNews article Cybersecurity: a robust response to the challenge is that it offers a plan for treasury organizations to isolate any irregularities in their standard processes. The authors recommend the following action plan:
- Apply the “four eyes principle” (two individuals approve an action before it is taken) or even the six eyes principle.
- Regularly check TMS audit trail extracts.
- Regularly update the guiding principles of treasury policy.
- Review user access to TMS and related systems/applications – crucial especially when personnel in treasury and related areas with access to treasury-based technology leave the company.
- Regularly consult with IT; especially when the corporate has outsourced treasury IT support to a third party.
Overall, this article offers a lot of practical information in addition to theory and survey results. It also resonates with our approach to treasury manuals and operational specifics. Full story…
From the Desk of Regula Spottl, Greensboro, NC
The Role of Corporate Activism to Force Public Policy
Since North Carolina passed the controversial law “HB2”, known as the “bathroom law”, in March, corporations and the entertainment industry have taken a strong stance. The law prescribes that transsexuals must use the bathroom that’s specified on the birth certificate and it invalidates several anti-discrimination measures that protected gay and transgender people.
The U.S. rock band Pearl Jam, Bruce Springsteen and Ringo Starr cancelled concert in North Carolina in protest against the new law. Springsteen’s concert was to be held in Greensboro!
PayPal withdrew plans to open a facility and offering 400 jobs in Charlotte. Also a growing number of corporations are protesting the law including Charlotte, N.C.-based Bank of America, Facebook, Apple, Starbucks and well over 100 other companies.
In the article How North Carolina’s Anti-discrimination Law Is Redefining Corporate Activism in Wharton School’s newsletter,Wharton professor of operations, information and decisions Maurice Schweitzer suggests that “Corporations are getting involved here in a way that is historic.” He further suggests that “Being an executive today in a corporation means you have to not only mind the shop but you also have to keep an ear out for politics.”
When the head of a corporation speaks out against bad policies, people pay attention. When entertainers cancel a concert a few days before a planned event, those who have tickets start to think about and take a position on the issue. The cost of hotels and restaurants, security companies and the venue itself are astronomical.
If NC’s governor Pat McCrory backs down in the face of those protests? Probably not, but he has no chance of getting reelected. For us North Carolinians, it’s simply a huge embarrassment.