Arts Graduate to Treasury Professional with Julia Fordham

Welcome to this week's Treasury Career Corner podcast where I interview treasury professionals about their treasury careers. Each and every week I speak to treasurers about how they built their careers, where they are now and where they see both themselves and the treasury profession going to next in this week's show. Delighted, we're joined by Julia Fordham, the group head of treasury at Small World Financial Services. Now, Small World Financial Services are one of the world's leading payment services providers. Secure, fast, inexpensive way to send money around the world and everything else. Julia will explain a little bit more about there because she came in as the first head of treasury there. As I said just before the show, Julia and I have known each other for many years, came up through Barclays and she's also a saxophonist. I think she's actually the first saxophonist. Unless our other guests can chip in and say, oh no, Mike, I did saxophone as well, but we'll talk about that again. But Julia, as always, enough from me. Let's crack on with you and find out about your background. So originally you got your degree from Cambridge and then the rest of your career carried on from there. So over to you, give us a, you know, you started at Cambridge and how did it go from there?

Well, I think, I think quite a lot of people were quite surprised when I ended up in finance and I was probably one of them in the early days because I think I'd gone to university, I'm an arts graduate, I studied classics and I didn't really know what I wanted to do. I had some vague idea about going into journalism. I'd had an internship in market research. I thought maybe I was going to go into marketing or advertising. You know, it was the time when advertising was a very cool thing to do. Then there was a kind of plan B which I'd always had in mind that was maybe banking would be a good sort of generalist intro to industry and to a career that might lead in lots of different directions. So it was, it wasn't really intentional. But the big banks and the accounting firms were hiring quite a lot in those days.

There they were, you started at Barclays in their management program. Was that the first role straight out of Cambridge?

It was in those days a four year program where you spent a couple of years going around branches and learning about banking operations, how money moves, something which actually came in very useful in later life. And then I spent a year in their marketing, corporate marketing department and a year in the head office credit, large exposures.

And with that, you know, did a good all round Role. You know, as we said before the show, a lot of the people listening might be in similar positions. You know, they're sort of starting out their career. They might be working at sort of a high street bank, high street lender or something like that. And what did that give you? That then, you know, springboarded you into your role at Morgan Stanley. How did, how did that happen?

I think it's very easy when in any job you can, there are always pros and cons and it's easy to see the downside. And I remember my first couple of years in branches thinking, crikey, you know, this wasn't what I thought I was going to be doing, what's this all about kind of thing. But it's important to remember that you can learn something everywhere you work. And that knowledge about UK clearing systems and how money is actually processed and where it is was just so valuable later during the financial crisis. But in fact, getting into Morgan Stanley was. It was a situation where my last job as a manager in Barclays, I actually covered the large investment banks. I was a relationship manager to the large investment banks. So I was a classic kind of lending banker, portfolio of products to sell and credit to lend. And Morgan Stanley at the time, if you can believe this, was, it was a kind of young, expanding, not very well known actually organization in Europe that had a small treasury team that was, was looking for people to come along and help them, help them expand, negotiate credit with bank providers. Wow.

So it's the real early days. Morgan Stanley, before it was a global name, as it were. So, so you went, then went in what sort of roles did you then sort of progress through sort of things. You started in creditor relations and things like that. But how did your career evolve? Because, you know, sometimes I talk to people and they say, well, I've been at this company for. You were there sort of 14 years, you know, wow, 14 years, you know, but it wasn't the same job. You made a move every three to four years sort of thing. Talk us through your progression there.

Yeah, and it was quite interesting because when I was first approached about job at Morgan Stanley by somebody who was effectively my client and I was, you know, in awe of, I said, oh no, no, you know, that's too much of the same. I'm not going to do that. You know, I was looking for not necessarily a way out of banking, but a way of achieving more breadth in my career. And I said, you're another bank. No thanks. And to her credit, the person who sort of Asked me, said that's the wrong answer, I'll see you for interview this time next week kind of thing because this is treasury job, it's not law banking, it's Treasury. And so that was my move into the treasury world and that is precisely why I decided to look at that opportunity was because I saw treasury as a way of getting some breadth and variety and also giving me the opportunity to see different kinds of companies. So there you go, there was the treasury transition. And so when I went into Morgan Stanley into creditor relations, I actually started studying for my ACT exams not long after I joined because I thought, well, here is a profession that I can really kind of get my arms around and commit to. I think it offered me a lot. If I'm here, I'd like to see all aspects of treasury management and I'd like to get exposure to as many of those as I could. So yes, I kind of transitioned from bank relations through capital planning and during the financial crisis liquidity management. I did some more generalist treasury style projects while I was there. The most interesting one of which was helping to set up the Russian bank that Morgan Stanley was establishing at the time. And I ended up as chief ops officer for the department. It had been a department of 45 and it went down to the sort of cash management arm split off. So it was roughly half that. So clearly a very large treasury compared with most.

And you were then managing through the crisis in 2008, as a lot of people will remember, some people won't. But what was that like? How did you guys manage there?

Well, I once heard somebody who's in the army saying that they'd left the army because it was. You constantly prepare for the worst but you hope that the worst is never going to happen. And actually in some ways, you know, being a treasurer is a bit like that. You know, you always at the back of your mind is what can go wrong? What can happen, what can happen? What can happen? You hope it's never going to. And pretty much it did. I think a lot of people will have memories of the financial crisis, but bear in mind that Morgan Stanley was a very close competitor of Lehman Brothers. We were kind of. The market had decided that we were next on the list. Yeah, it was a very, very challenging time which ultimately ended with capital injection by Mitsubishi.

And what was it like for you in Treasury? What were the things people are listening and they're thinking, right, I need to keep prepared for that. Another event like that were to happen. What were the things that you focused on as a Treasury professional, the relationship.

With the regulator was absolutely key. I mean we went from probably a quarterly convers to then had become a monthly conversation, then it became a daily conversation and at certain points I think for about a month it was three times a day. So that's something that you obviously have to manage very carefully. Our relationships with our business units suddenly came into very sharp focus. The nature of those conversations changed obviously and you know, the job that we had tried to do over the years of educating people in terms of this is what liquidity management is, this is a stress scenario, here's why it matters to you. Suddenly we were going to them and this is what we meant and this is how we're going to have to deal with it. So very, very tactical, hour by hour, very important that we already had those relationships and also of course with our bankers. And there were a small handful of key relationships with banks, particularly in the UK where without it I think the story would be very different today. And those relationships were built up over.

Years and then you survived that come up the other side sort of thing. But a year or so later you made then the move to Old Mutual. How did that come about and what was the progression there? Sort of perhaps explain for the people listening.

I had, I took the decision to leave Morgan Stanley in mid 09 and I decided I wanted a bit of a break and I think you can probably understand that sort of post financial crisis I kind of stayed for, for another year and almost, I mean it's very negative thing to say it was never going to get that exciting again. But you know of double edged sword there. But I sort of felt as though, I mean we'd done it all, you know and it was, it was time for change and I really wanted to experience a different sector. So I left time off over the summer, looked around, wasn't sure whether I might go into regulation or something similar, having a financial crisis experience. But the Old Mutual job came up, it really appealed because although in financial services, Old Mutual was a very different kind of company, very much more sort of financial conglomerate, different businesses. The job was in the holding company at the head office and I felt had the ability to influence a lot of what was going on around the group. And also they had a very clear idea of what they wanted to achieve in the sense that the treasury was going through a big transition from more of a sort of old style, sort of small treasury into very defined front office, middle office, back office, the chance to shape policy, put in place new treasury management system and defined the risk policy around that. And I thought that was really exciting.

And with Old Mutual, just can you describe to the audience again, I know it, you know it, but they don't know necessarily Old Mutual, it's changed as well in recent years because, you know, with your exit of things, can you perhaps explain for those guys again, what you say a conglomerate, what were they focused on?

Well, Old Mutual is or was regulated as an insurance company. And that was always the background of the group to grown up as very much a sort of a South African insurer and huge name even to this day in South Africa. I think at one point say that maybe 1 in 3 or 1 in 4 people in South Africa had an Old Mutual policy. And it was a group that had been listed in London to raise capital and acquired a lot of other businesses in the States and it acquired the Scandia name in the Nordics, which a lot of people recognize. Of course, you had the Scandia office in the UK in Southampton, which had moved from insurance more into sort of unit linked Asset Management, I think was the first multiplatform ISA provider. So a lot of people know that name. And then over the years kind of it developed along those lines, divested of some non core businesses, but in the end felt that it could better add value for shareholders by breaking up the group and sort of going back to its roots in South Africa. The UK wealth management business is now independent and independently floated and is known as Krulta plc. So all those businesses still exist, but they exist in a very different form.

And you yourself, I know we've talked about this, you went through the separation project and you sort of wound down, split out the businesses and things like that. And you've been there for, you know, 10 years, nigh on. Maybe you can just explain for people, how did you go through that process? I know you, I think you spoke about this as well, didn't you? One of the sessions, yes.

So Jack Large and I did a podcast on that which was really interesting to think through that in depth as well. And having been there at the beginning where we were kind of setting things up and then, and then this man, and I would say it emphasizes on not only me, but the majority of the treasury team had been there since the beginning or in very early stages. And so it was quite an emotional process to go from building something up to taking it apart and to helping the new Quilter PLC team kind of stand as an independent entity. When we'd spent a lot of time trying to centralize their process through head office.

And what were the key things that came out of that chat with Jack and perhaps reflecting after it, what were the highlights or you know, maybe low lights, you know, what was it like or what were the key things to focus on? Would you tell people?

Interesting. But you would think, I think from the outset that closing a department down was a relatively straightforward thing to do. You would think that, well, you get a list of all things you do and then you just stop them. And the reality is that it's almost, or maybe at least as complicated as setting something up. Especially if you have a greenfield site to start with because the intricacies of having centralized process or the problems that you can run up against if you didn't set things up properly in the first place. So thinking about whether all your contracts were in place to start with and properly documented, properly executed to allow you to terminate them in a straightforward way without extra cost. Do you know where all your agreements are? Intercompany loans for example? I mean old Mutual had a fairly complex intercompany structure which is the bane of a lot of treasurers lives. But my goodness, you've got to make sure that you documented all of that properly. And you know, do you know where the files are? Even, even the electronic ones and paper ones because they go back years. So I think I ended up concluding with Jack that when you set up a treasury department you've got to have at the back of your mind the idea you might have to unwind it one day. Which sounds quite negative, but it wasn't meant to sound negative.

No, I think you're building it and making sure it's fit for purpose all the way through and keeping that maybe in the back of your mind that you might have to unwind it as well as wind it up sort of thing in that way. And what we will do in the show notes for any listeners, we'll put the link to that conversation with Jack and with yourself so that you know, they can actually firsthand if they're interested in that or go through some of the process. And so as you say, you sort of wound that down or you know, slowly exited that. What happened next? What did you, what did you do?

Well, I had decided to take some time off after nine and a half years and I think a lot of the treasury team at Org Mutual did exactly that. It was a very emotional two year process and, and in the background of sort of people's ups and downs, I mean obviously that sometimes helped project management, sometimes it didn't. But we all kind of felt that it was time to sort of take a break. So I took time off, I promised myself six months off and started looking for something new. Autumn last year and I've now been at Small World for just over five months.

You and I know this because we've done some work together. But tell us about Small World Group and you know what it's like and what you've gone in there to do.

Well, I think you mentioned when we started that I'm the first person to be head of treasury at Small World. It's a company that has grown by acquisition. Yes. Also had some very strong organic growth and continues to do so. But because of the sort of nature of the dynamic of the payment services business is that economies of scale are important. So that there's been a number of major acquisitions over the years and it was felt that with new owners, so they achieved new private equity backing late last year. It was the right time to centralize, bring together, streamline certain processes. So I came into a group that had some cash operations teams that were already functioning on a daily basis because obviously money has to move on a daily basis, but hadn't really had the opportunity to think so clearly about centralized treasury policy or creating efficiencies and with the role itself.

So you've gone in, it's a fresh, as you say, it's a fresh new treasury as such. What was your checklist again? People listening? Oh yeah, I'm doing that. They're looking at new roles like that. What was top of your agenda and what were the other things that cascaded down? Something.

I sort of have two checklists really. I have the group level checklist and I have the operating level checklist. And it's fair to say that the operating level checklist has been rather more intense in the early weeks than I thought. I sort of was planning to start on looking at policy and have needed to get very involved in some sort of day to day issues. We have a new head of treasury in New York, for example, and somebody else there covering with him. And that sort of recruitment process was something I got involved with or needed to get involved with very quickly, very much at the operating level. But that said, it's given me a great insight into again, you know, how does the money move? Where's the cash? If. When you start to write policy, when I start to write it, where will I start? Where should the focus be? So what's your number one headline going to be and how will it suit the business and not just come over as a kind of top down thing. So actually that's turned out to be the right way around.

And looking at the future, where are you developing the business? Because again, perhaps just describe as well for people what Smallworld do.

Smallworld is a payment services provider and an international remittance provider. We are a direct competitor to the likes of Western Union and ria. And I'm sure your audience will heard of at least one of those names, although most people have not yet heard of Small World. And when they tell me that, I'm actually quite pleased because I think that means that the advertising is being targeted to the right place. And I'm guessing you probably don't send much money overseas.

Well, not on that basis, but I think it's a great service for people that need it and that's one of the key things. And as you develop what are the development plans for the business as such?

Certainly getting the brand out there. I mean I think the organic growth that the group has achieved has been fantastic and that's been really with a relatively low cost base and very little sort of advertising, marketing spend. And it really is about getting volume through the existing channels. The group will make acquisitions where it makes sense to do so. There are certain sort of currency corridors that Phil, we've not developed as strongly as we could. So I think that the potential for growth just in the existing channels is enormous and it's a very exciting business to be part of.

And you know, we said again at the beginning of the show and things like that we treasury obviously has moved a number of different directions or throughout and the development of it. What was treasury like when you first started in IT to now and where do you see the future of treasury coming through? And that's the, you know, everyone's talking treasury technology, everyone's talking straight through processing. But what are the key things that you're having to embrace as a treasurer and your treasury team and things.

When I first started in Treasury I think it was quite a proud time for the act because it was becoming much more widely recognized. And so like a few years earlier, the kind of the exams that people recognize had been introduced, they were recognized as being very tough. The profession was getting a lot more publicity recognition as a result. I mean so for example, it was common and I did the ACIB Chartered Institute of Bankers Qualification. It was becoming more common for lending bankers, relationship managers to actually take the ACT instead because it was recognised as being a tougher qualification and also one that helped them understand their customers better. And so it was A time of pride, I think, for the act was really establishing itself. And that has only continued with the recognition, I think, that treasury is not just one job, it's sort of. It's many different disciplines. It's at least four major disciplines and probably more than that. Now, when you think about the sort of development and risk management over the years. But in terms of the future of treasury, you will often hear, when I hear people ask this question and they immediately kind of dive into technology generally and artificial intelligence intelligence. And I agree with all of that. But to me, I still think the biggest challenge is getting the message out there about what treasury really is. It still amazes me that not just small companies, but even larger, well established companies, household names, some of them just don't really have much of a Treasury function. And when you talk to people, even within financial services, you sort of talk about treasury and they go, well, any banks do that? No, no, let me explain. Kind of. And maybe that is because of the breadth of what goes into a Treasury job, but it may be not as well understood as it could be. And I think that's our mission, really. Keep banging the drum. Because there is still so much potential in a company that has not managed its treasury properly, whether they're sitting on loads of cash or they don't have enough in terms of working capital. Just think of the potential sitting in UK businesses from managing treasury bet on.

And what you can actually do. And that. Well, that's also banging the drum and sort of shouting out about, you know, what treasury is, is one of the reasons I do the podcast, really. You know, I've been talking to you treasury guys for 20 years and I thought, actually, why don't I just record the conversations so that people can actually gain a better understanding for it? And on that as well. That sort of brings in the people aspect, if you like, you've looked and you're starting to expand and things like that. But when you are looking at people, are you looking for that? You're looking in the us. So were you looking at CTP guys or were you looking at, you know, what sort of treasury things were you looking for from that resume? You know, what was the things that came out to you, what were you looking for?

Depends very much on the level at which you're recruiting. That level, the one that we were speaking about earlier. I mean, clearly experience was very important, so experience of what I would call genuine treasury operations, as opposed to something that was sort of very much more specialized operational, a genuine treasury management. But I think As a whole, and particularly at the more junior level, I don't get particularly hung up on specific qualifications. I think what I'm looking for is a curiosity and an interest and a willingness to either sit those qualifications because I think they are important, or to understand at least what they're about. And so, for example, in Old Mutual over the years, we saw people taking various modules of the act. Achieving it is one thing, but actually the process is what's important. And about the. The attitude that makes you ask those questions.

Excellent. As we approach the end of today's show, we talked about this as well, that with yourself, you've got this great background. So you've come up through Barclays, Morgan Stanley, Old Mutual, and now you're heading up your own treasury team and leading the development of it as well. What we'll do is we'll put your LinkedIn profile in the show notes so people can connect to you if it's appropriate things. What would you say, you know, someone wants to replicate your background, what would you say is the key thing to do? What are the tips you would give to people?

I think that most people looking to replicate my background would probably be more focused about it than I have been. I still regard myself as a bit of an accidental entrant into the world of finance. And it was only over, after several years that I realized that I actually found it fascinating. If you do have that focus and you do have that interest, when you leave university or whatever, you know, for goodness sake, capitalize on it because you can gain years in terms of time advancing your career like that. Aside from that, this is going to sound very corny, but just be yourself. I mean, I think if you are the kind of person that is able to manage team, you have strong views on how things should be done. You can see what you believe is the right way of doing something. Just be kaut, you know, and don't find yourself in a company culture where you can't do that. And if you do, it's time to move on. I think these days it's good that corporate culture, I think, recognizes what I would call genuine diversity more than it ever did. So you don't have. It's not about saying the right thing or coming from the right business school anymore. I really hope, I think that much is changing.

Well, great final words, I think there, I think, yeah, embrace all that stuff. Yeah. As you say, just be yourself. And you said it was corny. I don't think it is. I think, I think that the more success or the most successful treasurers I talk to. It makes work that much more interesting as well, because you can just literally express yourself. And it might sound a little bit corny within Treasury. Well, you know, how do you express yourself? Well, actually, a lot of people do, you know, which is fantastic. So.

Well, also, I think that. I mean, one of your questions was about, have you made any mistakes? And I think every. Everybody makes mistakes, you know, in treasury, you should expect to make many mistakes, operational errors, spreadsheet errors, whatever it is. But unless you have a culture where people can speak up and even kind of almost celebrate those mistakes, then you don't have a risk management framework. What you have is people pretending to be superheroes, and that's not true. And then they will stop telling you what they really think or about the error that they made yesterday.

Yeah. The openness of culture is key as well. Well, thank you very much, Julia. Great chat as always. Yeah. Again, we'll put your detail in the show notes so that people can connect to you. Also, the connection to your discussion with Jack Lal. Should we put it in there as well? Just remains to me to say thank you very much for your time today.

Well, thank you.