How Automation is Shaping the Future of Treasury with Nitin Jain

Foreign.

To this week's Treasury Career Corner podcast where I interview treasury professionals about their treasury careers. Each and every week I talk to treasurers about how they build their careers, where they are now, where they see both themselves and the treasury profession going to next. And a special thanks to Flywire, our fantastic sponsors. If you've ever wondered whether there was a way to ease your international transaction hassles, they're the guys to talk to. If you follow the link in our show Notes, you can see me talking to my mate Greg Levin, their Senior VP of Sales.

I get to ask Greg about who.

Are Flywire and how they can help you and your treasury team with your cross border payment headaches. Just follow the link to the interview in today's show Notes. And now let's get on with the show.

In this week's show I'm joined by Knitting Jane, the global head of treasury and capital markets at Agrocorp International. Agrocorp is a global agri commodity firm specializing in the sale of staple food products such as wheat pulses and rice to leading food manufacturers in Asia Pacific and Middle Eastern regions. Started and headquartered in Singapore, Agrocorp started trading agro commodities way back in 1990, has since grown to over US$3billion in turnover, handling more than 30 agri commodity products across 50 countries. Yeah, there you go. That was lots of commodities and lots of words all in one center. So I'm actually going to get Nitin on the line because I want him to take us through his career, how he first got started. Great career story and everything else. Nitin, if you would take us back to the beginning. How did you first discover finance and then Treasury? Over to you sir.

Thank you Mike, thank you. It's a great pleasure to be on your podcast. I'm a regular restaurant of your podcast and I'm happy to share some of my life story. So after typically from a business school I joined banking wherein I was exposed to various fields of banking, typically treasury, cash management, foreign exchange, you know, and corporate banking. At that point in time it was back in 2005 I moved across various divisions and as my first role I was supposed to handle a multinational corporate across tax management activities as well as the foreign exchange. It was, it was the time wherein, you know, most of the activities are paper based. So my role was primarily to, you know, find solutions for corporates which were in high turnovers and especially the commodity clients. One of my clients happened to be one of the global leaders in commodities which were Cargill and I was, they were one of my Few clients that I handled sooner, you know, while I was interacting with them over, over a period of couple of years, they mentioned to me that, you know, they really like some of the activities that, you know, bank is providing and they want to automate a lot of stuff at their end. Would, would I would want to join their team. That's where from that, that's where from banking I moved on to corporate side.

At that stage you were based and you started your career in India as well. And you joined in India. What was treasury like for as you moved across to Cargill? Treasury in India, treasury was very, very.

Big department at that point in time because the complexity of the treasury there were huge because at that point in time we don't appreciate it today. But most of the payments, collections, foreign exchange were either done through pretty much paper and most of the transactions were done on phone. There were hardly any electronic platform. And we were coming of the age wherein we had more than 200 bank accounts. There was no concept of cash pooling and complexities were huge.

Just on that though, can I just stop you there? But you know, just to get that in perspective and people say, oh, when was this? Back in the 90s. This was in 2007, wasn't it? So it's, it's not that long ago really.

Yeah, memory not that long at all. Actually at that point in time, just as numbers, you know, the digital payments were about less than 1%.

Right.

And, and you can imagine the remaining 99% was pretty much on paper and.

With, with the role itself. You were the treasury manager. Can you describe it, you know, and how it all fitted in? And, and again, you and I know Cargill, but for some of our, you know, listeners, they might not know Cargill. Who are they? What do they do and everything else.

Yeah, Cargill is one of the largest privately held and one of the biggest, actually the top three biggest companies in commodity trading. They are present in almost 200 countries, about more than 140 thousand employees and about company which is about more than $100 billion on top line. So they've been in the business for more than more than 125 years. So it's one of the oldest and one of the biggest US multinationals in the commodity space. So pretty much, you know, they touch footprint around 200 countries in the world. It's one of the areas of treasury wherein treasury is one of the important centers for connection of business as well as banking.

And then talk me through. So you were there for what, six, seven years and you were a Treasury manager. What was the role like and how did you then grow and develop? Because I think that directly leads into your next position as well, doesn't it?

So it was pretty interesting time. I was lucky enough to be in a time where there was a lot of the time where digitization was kind of picking up paper was kind of phasing out and digital payments were kind of coming in. So once, once I was there and we kind of create a report which we call it like, you know, what kind of, which we call it the reciprocity report, wherein how much leakage do we create, you know, in the banking system? And if we could, you know, free up our cash, reduce our cycle times, reduce leakage across foreign exchange, what kind of value that treasury activity could kind of bring up? I mean, just as perspective at that point in time, the payments team were closer to about 30 people. You know, the treasury team would be about another 15, 20 people. So this was the size of the treasury team. So yeah, it was, it was quite a massive floor just for managing treasury.

And also, you know, commodities business and everything else. Why, why did that interest you so much?

One of the key things I would say when I was part of banking, you know, we could find customers which were choosing a product A, we could find customers who were choosing a product B. And what really impressed me there was that why specific category of, you know, certain customers were, you know, very, very meticulous, very careful. And I could not get that answer from my banking job that why, you know, these certain products have been chosen by these guys. What a company like especially, you know, like an MNC like Cargill would have a clear mandate on why they do this particular product and how, why do they do it in this way. So that answer could only be something which, you know, which I really wanted to kind of get. And Cargill is one of the well known platforms there. And a lot of processes and lot of, I would say so called principles are quite hard coded. So that's something which really helps in the learning curve because most of the newer and I would say new generation companies would typically miss out on a lot of black swan events. A lot of key product mistakes. Which these guys have actually put this in their principles.

Yeah, and then talk us through then the next move and things to your next role and things.

We moved in from a 99% paper to pretty much a 99% digital. So this move typically happened wherein we implemented technology solutions across different asset class in the space, which is cash management, which is automated reconciliation Swift integration, cash management. And I mean, just as a number, the treasury team, which were, you know, which I mentioned about 30 people in payments and another 12, 13 people in treasury, pretty much sank down to just a couple of days. And today, today the automation is at a level wherein practically in the regional team there are few people, but in the other center there, there's no treasury team.

Right.

You know, so.

Well, you, you literally were replaced by robots, right?

Yeah. Or you could say the robots plus plus digital systems.

Yeah, yeah.

So that's the transition in only, you know, three to four years. So you can imagine such a vast differentiation from such a big team to such small teams and talk us through.

That, because I was going to use that actually later in here, but you brought it up nicely, which is great. You very much believe in automation and everything else. I mean, I said that, you know, we've been replaced by robots, where everyone's talking about it now. But back in that time, as you said, you saw, you know, things like foreign exchange system like FX all, and there are other ones, but, you know, sort of that. And I saw this, you know, when I was going to conferences and they said, look, we basically, I'd see a foreign exchange trader walking up to this, this computer going, oh, crumbs, this replaces me. Yeah, I'm out of a job because, yeah, this, this system works 24 7. And you know, you just keep switching it on and away it goes. Did you see that sort of thing? And, you know, I know that you believe in automation because obviously it gives resilience and everything else. What was that like?

So let me kind of give you an example. And you know, probably I think the audience would also appreciate it. So typically, you know, a company like Kargil would have like turnovers and billions of dollars. And, you know, the mandate was that whenever we were checking price, we had to check it with two competitive banks. And, you know, whichever bank at that point in time had a better price, you, the, the, you know, out of the two traders would probably hit one. Right. And you know, like one of the questions which always came to my mind, like we had like 15 banks. Like we are just checking with two. What about the other 30? Yes, that was something that we were trying to solve for that. If we were doing this about six to eight hours a day trying to find the best price, if this process could be automated digitally and we could make banks compete against the price, this would significantly save at least millions of dollars, especially for those teams. And once we implemented as a simple solution with teams like today, you know, the system typically at that point in time find the best price and execute it. And even after the execution, the process of confirmation and state to processing is done in less than a couple of seconds.

And did you see that process starting at Cargill and then you took it onto the NX role or you know, where was it in the journey if you like, of technology?

So this is pretty much like, you know, in a way much ENCODE just implemented in a couple of years at the start. And there were more complexity around cache management. I mean for users who kind of are new to patch management is like how do you manage cash around various locations in various bank accounts. So there were many, many, I would say developments and processes changed, which typically could help in reorganizing the cache and so that the cache is available much quicker and it is available much more efficiently. So the entire, I mean, because, I mean a lot of projects were taken, I would say in silos. So there were projects which were around, you know, cash, which was erp, cash management, selection of bank. So those were like projects that ran for, you know, at least six to eight months wherein global teams were involved in. They were projects which were around fx, there were projects around, you know, reconciliation. So there were many, many projects and there were also some major projects but lasted for, you know, starting from a couple of months to even going up to an year.

And then as I said, talk me through the next step, what's happened?

So when I, when I left that organization, I mean Kargiel, it was pretty much the treasury team was just a couple of people. And then I moved on to a role where I moved on to more on, on the trading side of the business wherein I moved on to a hedge fund which was pretty much Singapore based. We were managing pension money for some.

Of the big consulting firms and talk us through that. So you know, that role and everything else because I know that really interesting role, as you say, much more slimmed down. So you were doing a lot of activity, but more advanced level, if that's the right way to put it. Let's not say cargo wasn't advanced, but it was sort of. What was your role like that? Because you were the treasurer there, maybe you can talk that through.

Yeah, absolutely. So one of the key things I would like to kind of highlight, if you see the evolution from drama pure, our initial roles were primarily bringing efficiencies, right? So connecting liquidity providers which were pretty much like the onshore liquidity providers but later on, you know, with connectivity with cross border we tried to look at can we bring down, you know, liquidity providers from both onshore offshore into different time zones, trying to make the market more 24,7 then. So typically the more and more with digitization, cross border doesn't really change much. So on the treasury side, you know, there were various aspects which were, you know, how do you add value on the management side of Treasury? So because most of the, you know, I would say the operation part, the information part is all solved by system. When I was at Tesla, the problem that we were trying to solve for is how efficiently can we look at the other aspects. So, you know, how do we, you know, when we are looking at borrowing, you know, which currency we should be borrowing, while we are borrowing in this currency from a corporate side, is it tax efficient? Right. When we have kind of brought down that, okay, we should be borrowing in this currency, then we look at what is the impact that this brings to the business. So all these aspect of, you know, analysis finance converged in the treasury role. That was the big, big change, you know, which has started happening these days as well.

You did that role for sort of four or five years and you know, don't run out of time today. Talk us through then the move to Agrocorp and everything else and, or, you know, talk me through later.

In 2019 I was approached by Agrocorp, which we heard about in the introduction. So they are in the phase wherein a lot of the efficiency that have brought to various companies, they are in a stage wherein they haven't deployed everything to the efficiency stage. So one of the things was to kind of bring efficiencies, get all these banks digitally connected, a lot of cash management, which is because they are presented about more than 22 countries. Can we look at a single pool of CACs across, across the globe? And I mean a couple of things to highlight. Every company would have a specific, you know, locations of working. So we at agrocop, we are there in a lot of emerging markets. We are, we are there in India, we are there in China, but we are also there in difficult markets like Myanmar, Vietnam, Thailand, Indonesia, Malaysia, wherein some of these activities are still at much more early space. So working with a lot of banks, working with a lot of regulators to make sure that a lot of cash gets to the efficient fees. So that's one of the big K's I have here.

And talk me through the company itself in terms of treasury structure. So you've got a team of seven, you know, how do you structure the team or how does it, you know, how does it work?

So we got regional centers and then we got the headquartered at Singapore. So we got center, we got operations in Canada, we got operations in Australia, in US in Brazil, we got operations in emerging markets in India, China, wherein, you know, our supply chain is kind of having, you know, origination from developed markets, going into the modern market. So most of these regional centers typically are the places where in a lot of either we pay for the procurement that we do or we receive the sales. So most of these centers are divided in terms of, you know, moving the cash, you know, from collection center moving back to the global treasury. So most of the people that I kind of that reports into me are based out of these big centers that we have, you know, out of different reasons.

Now when we had our pre podcast and that that was a leading question. You see, I've done this before. You've got all these different centers. What's it like managing a mobile team 24 7, you know, that was one of the things that we talked about before that. That's a heck of a challenge, isn't it? I mean, even before, you know, Covid and everyone's starting to use virtual and everything else. How do you do it?

You know, I mean, as I've kind of mentioned from a problem statement perspective, we cover from Australia to Canada, so it's almost, you know, covering the entire 36 hours across the time zone. So we typically use technology. So a lot of information that we use is on. On, you know, systems like teams, wherein a lot of interaction happens with employees at different times. Kind of suits us. There is a common system. We use common system across, you know, different treasury centers, local treasury centers, wherein a lot of information can be visible to us across the time. And we typically have calls which, you know, which are, you know, as regular as daily calls on certain, certain treasury centers wherein there are cash collections or a cash payment center. And yeah, these interactions are, you know, with the help of, you know, digitization, we typically, you know, happen.

And this I wanted to shift on then because we talked about their technology and things like that. I know that that's a big passion of yours and for, you know, technology and using it. You've won awards about it. You got a Adam Smith award previously and things. Can you tell the audience, you know, why you're so passionate about it? Is it just, you know, it just gives you power over stuff or why. Why is it so important to you?

I mean, technology obviously, I mean masters in systems and technology has a background, but one of the key things that really changes, you know, an industry is, you know, especially the commodity. Right. Is the efficiency that you can bring in. And I've seen this time and time again. You know, like for example, we implemented blockchain in one of the toughest industries, which is commodity trading, wherein we could instead of moving the physical documents to the bank, especially when we saw this in Covid, that you know, banks were even cut. Right. And we could settle our cross border transactions, you know, on blockchain, wherein you know, banks could settle, you know, millions and millions of dollars, wherein they have the trust factor in the supply chain. So those are the solutions which in tough time like Covid, we could be like one of the most profitable companies because of the technology that we deployed. And now some of these solutions are actually become more mainstream. And once these solutions are deployed, it would reduce a massively cage. And I mean just as a number, we could bring down our working capital cost by about 21% that year. And that continuous efficiency is still continuing till now.

If there's a treasurer today thinking should we do blockchain, obviously all this technology, they're very busy people already and you're busy and things. Why do you say that? If you're sitting on a panel or if just sitting here now, why would you say that people need to embrace it.

I mean, let me kind of answer this question, you know, as an employee and let me answer this question as you know, as one of the decision makers in the company.

Yeah.

When I'm in, you know, a center of expertise as a Treasury, when I see that deploying this, you know, technology, for example, creating efficiencies and I see, you know that that would lead to a lot of changes in the structure of, of my team which primarily could be you would have reduction, you would have efficiency in process, but you would have also reduction in people managing those process. Right. So it becomes, you know, a difficult kind of path to take. So in, in teams wherein you know, you see organizations wherein you would have, you know, more than 10, 15, you know, employees dedicated to a certain processes, embracing technology is, is quite challenging. Right. But at the same time when you see this a little beyond, you know, like new changes of role and you know, adaptation of new technology, when you see that this efficiency would end up creating a lot of value to the stakeholders and I'm talking about numbers, you know, some of the numbers which I guess I just spoke about and the people who are kind of, you know, are part of the treasury would move into the new restructured role and we could find more useful, you know, restructured job for them. So that's where I would say that, you know, being part of our board and being part of, I would say the stakeholders, the committee, these decisions are taken. And I think not a lot of companies would have these similar structure to kind of embrace, you know, these changes.

And with this investment in this sort of ecosystem, you know. And again, I don't want to overlay with the points. I think I know that you've sort of throughout the company and everything else that's really sort of helped, isn't it? Sort of thing. Or you know, can you talk about, you know, in a wider sense how it's got treasury out there in the business as well?

I mean, as, I mean apart from just implementing the technology, the success doesn't come in just by setting up a good system. It's about, I would say partnership with the businesses. Because some of these technology solutions, you are interacting with customers, you are interacting with stakeholders like finance, your stakeholders like sales, marketing, hr. So plays like a key role in implementing these sort of solutions. I mean, let me give you an example. The good part about technology is that the economies of scale pretty much from zero. I mean you can reach to like a million times efficiency, but implementing it correctly is one of the key aspect of providing that solution. So just to give you some of the things like that we implemented every time when we reached out to a bank. So most of the bank communication, when it comes to working capital finance, financial transactions, it was all either done through phone or it was done through mail, it was done through sending physical documents, was done through reaching out to relationship manager or sending out documents to various dropboxes. Yeah, but the moment we kind of implemented the solution, the, the all the information, which is in a way more discrete information about certain transactions flows from our ERP to the bank directly and could create transactions and we could approve these transactions on the, on the platform that we have created. And yeah, it's almost like straight through and the time for information is almost like seconds.

Okay. And before we reach the end of the show, because we're not that far off and things. But other things that you're thinking about as a treasurer, I know you again, one of the reasons I'd seen you spoken on various panels and things like that, what are the other things that you think treasurers need to be thinking about in their, you know, as well as their day jobs? You know, you guys are really busy, but what are the other things that you think are important?

Funnels. We have Started seeing adoption of AI in five. So a lot of work which was actually done manually, you know, which could be replaced by generative AI, a lot of reconciliation and let me put it, a lot of forecasting that was actually done by people that could also be replaced by AI. So I think our next step would be that can we, you know, implement, you know, technology on forecasting as well as state finance on generative AI and reduce some of the, you know, errors as well as link and efficiency. So that's two things that we are working on already. The second thing, you know, let me. I would say the transformation of the roles in the treasury in the next couple of years. Most of these processes around, whether it's treasury operations or whether it's FX operations, whether it's a loan disbursement, whether it's cash management, these, this would, this won't require people at all.

Right.

So interesting. Where people would be required would be more on strategic stuff, more analytical stuff, more decision making. And so the treasurer would need to be having like a broader, you would say, broader scope of, you know, things like what are the interest rate risks you are running, what are your FX risks you are running? You know, the more on the strategy around how do you kind of manage your cash, how do you kind of use, you know, various currencies, various interest rates? So it would be more of, I mean, the role would move from operations execution to more strategy.

And how do you help your team do that? You know, how are you sort of hand holding them with them? You just say, right, this is a strategy, guys, we've got to implement it. Or I know it's not because we talked about this before, but how are you sort of instigating that and making sure that you're sort of supporting them as they move from that sort of, as I put here, from processing and process to overseeing and strategies and implementing those.

So I mean, typically all these, I mean, there are various stages on how a project is structured. First, there is a team lead which is identified within the trustee that, you know, these are the certain projects that we would be working on. The team would typically work with various vendors, work with various stakeholders. We'll put a timeline. So a lot of daily treasury operations would have a lot of project work. After these projects are pretty much implemented and also how far we have gone through in the project, we look at what are the other efficiencies which are around these processes and these roles are transformed into, you know, new adult.

I would say, yeah, amazing. And so we'll put your LinkedIn details in the show notes. You know, we, we aim to keep the shows now fortunates. What are the takeaways that you're going to give for people listening today, if they may be more junior that they yourself, as you were at Cargill, the sort of more, you know, sort of developing your career or maybe the other treasurers, what are you things, do you think the people you know as takeaways.

For today's show innovate or die? I mean in this time of digitization and AI, treasurers have no option but to adapt to it. And you know, there would be a transformational change on how, how, you know, like how people heavy treasury works. It would definitely get cleaner but the efficiency that comes to the businesses, right, it becomes, you know, the key factor. So it would make a huge differentiation in efficiencies in terms of cash flow, profitability reduction and working capital cycle in a big way to the business. And that's what that, that should be the mission for, for any tractor.

Well, thank you, sir, Been great to catch up. We'll put your LinkedIn details in the show notes so people can connect to you going forward as well.

Yeah, no, thank you. I really enjoyed it as well.

Thank you. Thanks, Nathan.

Thank you very much for listening to the podcast. I hope you enjoyed it. Wanted to catch up with you at the end of today's podcast to invite you to join us in 2024 at one of our Treasury Career Corner Live events throughout the us, throughout Europe, throughout the uk. So we're going to be right the way across and we start the world tour for Treasure Career Corner Live in New York on Wednesday the 6th and Thursday 7th of March. You don't want to miss them. You're going to be there. If you're in New York, please look it up, register. You've listened to the podcast, you can actually get to meet some of the guests live. You get to meet me live. I've done everything. But anyway, no, I hope you'll come and join us. Talking treasury careers. Each event starts at 6:00 clock with registration 6:30 to 7:30. I meet with the guests, I talk to them on a live panel. It's live version of the podcast, after all. And then we do networking drinks. So the first one, say in New York in Times Square, then we actually move on. We've only got 65 people per night that. So we're booking up with. As I record this, we're over 60% full on one of the nights, 55% full on the second and then we're hitting the road. We're doing Treasure Career Corner live in cities across the us, UK and Europe. We'll be at Kyriba Live in Las Vegas. We'll be at Texpo in Houston. We're also stopping off in Dallas. And then we've got other of our own events in Chicago, London, Athens, Luxembourg, Frankfurt. What could be better? So if you keep an eye on the website, we'd love to see you there. Keep an eye out for dates and venues. We're coming to a city near you. If you want to connect with us, just reach out to me. Can't wait to see you in 2024. Treasury Career Corner Live the World Tour. See you soon.