The Next Stage of Technology in Treasury with Royston Da Costa

Foreign.

Welcome to this week's Treasury Career Corner podcast where I interview treasury professionals.

About their treasury careers.

Each and every week I talk to them about how they've built their careers, where they are now, where they see both themselves and the treasury profession going to next. Let's get on with the show.

This week we catch up with Royston Da Costa. Now, I spoke to Royston, well, way back when. Well, we'll put the original link to the original show in the show notes, but it was about three, four years ago now, raising to chat to him before. He's got a big, big strength within treasury technology. That's what we talked about on the original show and it's one of our first ever shows. So we actually had to rerecord the show a couple of times, whereas he and I were all over the place, still learning the craft of podcasting, if you like. But Winston and I, we've known each other for a while now and we decided to reconnect, if you like. In the first show we talk about his original career and about how we first started merchant banking, funnily enough, back in the day, and then developed and developed and really embraced things like treasury technology and really utilizes that. What we then talked about is we were talking pre pandemic, so I wanted to bring it up to date and rather than just do an update show because he's got so much value to give, we've made this a standalone show in its own right. So what I'm going to do is I'm going to get on with the main show if you want to, and I would recommend it. It's lovely to hear it. You know, he's a nice double bill. If you like, you can listen to the original conversation with Royston, give it some more context. But now we pick up the baton, if you like. Back in 2023, he and I catch up and go on from there. And he's a lovely guy. Look forward to seeing him for a beer or three soon. But enjoy the show. Royston, welcome back to the show. Talk us through. Pick up the story from maybe when we left it 2019. Over to you, sir. What's happened since?

Well, thank you, Mike. This is a pleasure to reconnect with you in this way. As you said, we've been friends long old time, seen many things happen in both our careers and glad to see you're successful and certainly sort of gone international in many ways. So look, my perspective, what's changed 2019, 2023 firmly cliches are going to come out in this podcast, I'm afraid. But you know, time just doesn't stop still, especially where technology is involved, I suspect as well. Certainly there's no question in my mind the pandemic has definitely helped expedite the progress and the engagement of technology, particularly with corporates and treasures that previous to the pandemic were still hesitant or reluctant to embrace SIM and cloud based solutions. And then obviously as soon as the pandemic hit, there was no other option really frankly for most corporates, but to consider looking at cloud based technology. I think, you know, there's so much that I want to talk about and it's trying to see how we can capture all the main points. I mean, typically when I do a presentation on the impact technology's had, not just on treasury but in Ferguson, I like to also kind of reflect, as you say, you know, in terms of not only back in 2019, but going back further still to 2008 because it's within our lifetime in terms of the economic crisis 2008. That was frankly where the initial impact on my role and the technology and the way our focus on technology and Ferguson began because we had a new board, new senior management, the new CFO came on and was very keen to look at using effective automation. So going given 10, 15 years, it was quite common for corporates, large corporates ourselves, to put in a system like we did with trading management solution or you know, online trading. But what we did have is automation. Well, actually didn't have. We didn't see that as necessarily a huge priority. But of course now when you think about technology, automation is kind of almost, you know, integral and it's like, why wouldn't you want that? So in those days, you know, we had the technology in a basic form but we didn't have it in a slick. So we got automation as a top priority for us there and we began slowly but surely connecting all these systems and making them automated was great. The next milestone in my view as far as technology is concerned is regulation. And the open banking regulation that came in around 2017 was a big game changer for me in terms of pushing, particularly the banks. Obviously fintechs were then coming into the picture to expedite that whole kind of faster payments. You had Swift gpi, some of these other changes, banks, particularly the banks, I'm afraid, or bit sort of, I say not reluctant but slow to take up. I think regulation has to continue to play an important role in the way that technology's developed and evolved. If you think in terms of Cryptocurrency going forward and I'll come back to that later on. But then finally, obviously the pandemic, I mean that just wasn't anticipated by anyone. But clearly as a result of that, it's very sad and it's not a great thing to have to go through. But looking at the kind of silver lining that come out of that, it's the impact it's had on technology, particularly within treasury. And there are a number of technologies that I'd like to share with your listeners here. First, it might not sound that they're particularly relevant to treasury, but I have a firm belief and I've seen some practical examples already of some of these technologies. So just to give you a taste of what I'm going to hopefully talk about in the session, I'm thinking of things like the Metaverse, holographic images, augmented reality, quantum computing is going to be huge. There's a technology called Digital Twins which is already being used in treasury and supply chain financing. Obviously cryptocurrency and non fundable tokens. Blockchain has been around for a while. That's the underlying technology for cryptocurrency, but it's also been used in other industries that are related to Treasury. And then finally, but not by any measure, least important is esg. For me, I know when it comes to treasury we always, and we are obliged to look at our main responsibilities for risk management and liquidity management. But for me, ESG is the one biggest single topic that treasury, and not just treasury but corporates are facing today. I have to focus on going forward because that's what the new workforce, the new, in my view, treasures and accompanies treasures of the future they're coming to the workplace are most interested in and.

Concerned with and with that, you know, these IT treasury tools with you touched on there, the pandemic, you know, what was it like being technology focused then going into pandemic? Did it really produce all the benefits you thought and the resilience and everything else, or whether you thought, oh, you were, you know, we should have done this, you know, so now that people need to rethink about it, would you say no?

Absolutely. And think, you know, this is one time where we've been very fortunate. Like you can always say with hindsight, this is exactly what we needed to have done. And we had, thankfully did because we implemented our cloud account solution, which is Cooper, back in 2015. And that was a huge game changer in many respects because it not only gave us the ability to kind of work remotely if we wanted to because it was cloud based. But it also set the platform which is one of our objectives to build upon because we wanted to future proof our technology and what we were looking to do at Treasury. So for example, as soon as we implemented Cooper, we joined Swift and Cooper, our gateway to Swift. We then had a mobile app that allowed us to approve payments remotely and we were able to connect with all of our systems. We have about 13 cloud based solutions, most of them connect to Cooper and we don't need all of them to connect to them obviously. But in terms of how we get the end to end processes working, working, they all work seamlessly in the background. I can't share slides with you now but it's probably a good thing because it's so busy. But what's the beauty of the slide I like to share when I share with audience in person is you see all this noise that I call it on the slide but none of it's apparent in our day to day jobs because it's working in the background, which is how it should be. Kind of come back to your question about the pandemic, Mike. So from day one I'm really pleased and proud almost to say that we had absolutely minimal impact of any to operational business as usual because everything was on the cloud. So as soon as we were told we needed to work from home, it was just the same as being in the office. I mean, unfortunately again where I live, the WI fi and the broadband provider I've got is very good. So depending on where you're based that can be a challenge sometimes. I get that. But if you are able to get decent broadband speed then that really shouldn't stop you from if you've got sort of infrastructure we had continue working. I'll tell you one challenge we did have, believe it or not, the banks. So we're going back to what was it 20 March 2020 when the pandemic first hit and literally a couple of months before then, you know, I was kind of looking at Dodger we had and the way we interact with counterparties and you know, banks getting sort of saying kyc, can't we send these documents digitally? Adobe Acrobat or Docusign said no, no, no, no. Well, day two of the pandemic Sunday, quite open to these wise documents. It all works really well. So thankfully no one's looking back now. I think there are certain occasions banks will insist on a work signature but frankly most cases we're quite happy are able to send and again that's an area which I'm very keen for, not just banks but also fintechs to continue to develop because it's still a pain point for a lot of corporates where there's no centralized repository and there's no really easy way to, you know, sort of get this information across to the bank. I'm very confident, actually optimistic that we're not far from a solution being available that will work quite well for corporates.

Listen, things have changed a little bit with the group itself. Again bring us up to date with work in so far as the office and you've had a change operational shift. What's, what's that been like for you?

Okay, so for your listeners, in case they probably might not be aware, I've been with Ferguson 21 years this year, done a number of roles within treasury in that time. So when I first joined it was Wolseley. In those days I joined as personally as the assistant treasurer in charge of cash management for the group. And we're a very small team in those days. We did get to the point where I think we were in about 28 countries. This is the pre economic crisis days. Today we're basically in two countries, the US and Canada. So from the time that the economy crisis occurred to now, the board made a huge decision to review all the countries we're in and to exit those countries that we were not really making any gain or certainly return on. Our investment wasn't as good. So slowly but surely as we went through all these different countries and some of those are very small, a lot of Eastern European countries, it was a hard decision to expose particularly as say post Covid crisis 2008. But as we got closer to the last country that we exited in terms of operationally was actually the UK. We sold that UK business back up thinking 2019. I want to say the board then began to realize that as we focus more and more on the US where not at that stage, I think it was almost 90% of our turnover was generated in the US that it made complete sense to look at secure primary listing on the New York Stock Exchange, which we did last year successfully. And of course in that roadmap and going to that point we also then board and decided that they wanted to have the senior management based in the US which you now see the CEO that time CFO and now the treasurer. My, my boss Sean McKellen is also based there but we're still domiciled in the uk so therefore my current role which is really responsible for the UK Loan structure and continues to be. I continue to be responsible for the group, treasury, technology and obviously a few other areas as well. I need to still be based here in the uk, but this is again where my technology has a huge part to play in the way. Not only that my role exists and it interacts with my colleagues and my boss in the us, but I think a lot of other corporates have seen this kind of dynamic play out and I'm sure you've seen this in your industry, because I know it does matter sometimes where you're based and obviously going into the office is important, but fundamentally I think future looks very much agnostic in terms of treasury roles. Where you're based, they can work remotely and you can work pretty much anywhere. In fact, we've got colleagues in the US at the moment who aren't actually based in the office. So because the US is being the US and it's a large country, I think the one based in Florida and one's based up in Virginia, but it's not necessarily right in the same city that, you know, the main offices based. In terms of my interaction with my colleagues and my boss, don't get me wrong, I'm a big fan, like you, of meeting face to face, but I don't see that in itself being infected to a great deal by the new flexible working that certainly we have in Ferguson and there are other companies have introduced. In fact, my personal view is that the future is almost looking at that as a bare minimum. It's more about the choice, I think, Mike, rather than sort of saying you have to work remotely or you have to work in the office. I think people like the choice. Now, I think, unfortunately, at the moment, don't get distracted here, but there is a bit of a controversy or discussion around people having to come into the office or being forced to come into the office or rather than the other way around. But I'm sure that's going to evolve because I think you've got people in the workforce or people in that are used to a certain way of working their whole career and probably even the bosses. And so the whole kind of concept of trying to embrace this hybrid working style and it's not for everyone as well, by the way. I do understand that, you know, it depends on your circumstances. I'm fortunate. My children are much older, they've graduated, I've got my own home office. There are very little distractions or obstacles for me. It's no different for me to be in the office. The one thing I will say Absolutely. I do go to the office for this at least once or twice a week is to interact with other colleagues. The problem with that as well. Mike, think about anyone's schedule. I'm sure yours is probably just busy as mine. When you go into the office, I tend to find sometimes that most of my time is taken up on zoom calls or meetings online. The amount of interaction I might want to have or think I'm going to have with my colleagues in the office is minimized. So sometimes I feel scheduling that time either in the office or certainly online and certainly in terms of online interaction and relationships that I've developed through the pandemic have been a lot more, dare I say, deeper but, you know, better quality than I would normally had if I was in the office. But that I don't want to get too, say, distracted by that. But it's an important point because I recognize a lot of people are looking at that at the moment and so.

I don't want to run out of time today. And yeah, you've touched on a lot of great things about put in the technology piece as well. Way back when I originally threw this question at you, treasury technology why Bob? And at the time was like, bloody hell, you know, and you went back and stuff. Now looking back at it, you know, now you've got cloud based solutions, you've got automation. Where are we going next? What are the next things that you guys have embraced this technology, it's helped you through Covid and everything else, but now what's the next evolution? What should. I used to talk about this? Talked about it in a while, but I used to say that treasury professionals like yourself who are very systems focused and have got technology in their back pocket, you're being pushed forward by the CFO in a nice way to say, right, can you filter through these other things for us? I saw a posting just yesterday about crypto and you know that sort of onto one side a little bit, but people are now starting to pick up a bit more blockchain. But all of those aside, what are the technologies you're seeing that people need to think about in a strategic way for Treasury? What does treasury need to be thinking about technology coming at us now before we do that?

I have been thinking about this quite a lot recently and as I say, you know, I always like to make the caveat that I'm not technical expert when it comes to technology. I'm a treasure at the core and my interest in technology is mainly driven by what I see can add value to my role folks and hopefully to the wider treasury community. I'd like to also mention this point if you like, in terms of treasury historically and certainly in my experience even five years ago, people coming to treasury would never have imagined they would be looking to do any type of programming or become a kind of computer geek or any of those kind of terms or cliches that people might want to use. I think today I don't like to use the word programmer because it initially kind of gives you a stereotype. At least for me it does. And frankly, I think whatever discipline you're in today, especially if you're a Gen Z, you know, if someone is coming into workplace in their 20s or whatever, that's not a stereotype or let's say concept alien to them. And so what, what I'll say is that core of what we need to think of in terms of treasury is we need to be open to the future involving some level of programming. Now I would quickly caution or emphasize that when I talk about programming there are different levels of programming in my mind. Now I'm still not necessarily going to the kind of very detailed kind of technical programming that some of the Python, some of these other languages that people are familiar with that would use. That's nowhere I've got to do, nowhere at all. I wouldn't want to oversimplify it. But what I'm trying to get to, I guess is there are myriad of applications that we all use every day that we don't think twice about. The fact that on a very simplistic level we are programming. If you think of, for example, pivot tables in Excel or if you think of macros and some people are very proficient in them, that's a level of programming. It might not be complex as the likes of Python, but it is. And the reason I'm saying that now is because Microsoft have provided tools for us to create our own apps, literally. And where that can be quite powerful. And working with a colleague of mine in Ferguson who's doing this as we speak, again, keeping it simple. If I've got a process, for example, by treasurer and I need him to prove, let's say setting up a user in a system at the moment, we might go through sort of usual email process, you know, he has to read through the email documents, whatever. Well, by setting up this process, which I've seen my colleague do, it's a couple of sort of like you do when you go through any kind of filling out application, if you like online, tick a few boxes and that goes off to the person that you wanted to go to. All they do is review it, whatever the backup that's provided, and then they can say approved and it's literally an app that you've created that they can use to interact with you. Again, I say it's a bit crude, but if you've got that potential happening today, imagine the possibilities tomorrow and day after tomorrow. And I hadn't even touched and some of the organizations I know treasurers are already looking at and have qualified with sort of like the Open. I think it's the AI university or I think it's called OpenAI or something like that. But anyway, there are organizations out there that provide programming qualifications, not high level, but certainly enough to allow people to create these routines that can automate some of their more complex treasury functions. So that's the basics to start with. I'm going to quickly cover some of the other technologies that I mentioned earlier to you, Mike, in terms of the metaverse, augmented reality, quantum computing, Digital Twins. Cryptocurrency, I think is it's here to stay, it's still evolving, it still needs a bit of regulation, but I am a firm believer that that is going to be the future for Treasury. Maybe not completely this year, but you've got the central banks already developing their own cryptocurrency. So it's just a matter of time before that churn becomes mainstream and obviously blockchain. And as I said, esg, I mentioned Digital Twins early on because Coolpe have already introduced that technology in one of their solutions, I think for supply chain financing. Effectively what Digital Twins does, the technology is they're using this with smart cities like Las Vegas, it creates a replica of that structure. So in this case Las Vegas on the web, you then have the ability to stress test that replica, that digital version of whatever structure you've created. You can anticipate and prepare for any eventuality. Now imagine if that was done for pre pandemic, you know, you'd be able to predict if you like, or at least anticipate what you need to do if something like that were to hit your company town you live in, or in the country, the city, whatever, you know, take to any level. So forecasting, I think is going to be a big beneficiary of that technology. They're using that technology in Holland as well, or 3D bridge that was created to sort of stress test it and see what are the sort of times, weather, elements, whatever it is, you know, traffic that could cause an issue with that. I'm sure they're probably going to start using it for much wider projects outside of tragedy, in terms of earthquake, droughts, weather, climate impacts, that sort of thing. But certainly in Treasury I can see that being a huge benefit. But I think when you think of the way we interact with each other, as I said before, in terms of being remote, the Metaverse is offering a much better quality interaction, particularly when you're bringing holographic images. So I've seen this technology not today actually, it's sort of a year ago. And I think Qlik, which is a BBC program that I quite often watch showcase this technology where you can actually be in the same room as your colleagues or someone else halfway across the world. So enhancing that whole experience of being at the moment on the zoom call, which is just 2D, almost like you're there with them, 3D and so on. So I think that's again something that will happen in the near future.

Let's draw it to a close. I mean we've had lots of stuff. I mean, exactly as you and I said before the show, we could keep talking for a couple of hours but we haven't got that time. What are the wrap ups you were taking? When we did our previous show, we talked about being, being determined, getting stuck in, touched on there about sandboxing and if you reflect back over in this, what are the top tips you're going to give to people this time around? You had four more years experience, really been at the front line of things and it worked, thank goodness. And that was, that was fantastic. But as you reflect back, what are the key things you think that someone listening today from a systems technology perspective or just in general treasury terms, what would you say?

So this might not surprise you to hear this, but I would say the number one tip, if you like, would be to remain open. I think it's so easy for us in terms of treasury to come with a particular mindset that's sometimes blocked or restricted to say, you know, this is what we've always done, we're not comfortable looking at new technologies or. I've been in the industry a long time, I've been in treasury over 34 years and I've got to say been focused in 21 years. If there's anyone that could be guilty of that would be me. But frankly the reason I'm here today and talking about these technologies and what I'm talking about is because I've had to adapt, I've had to be open to what change has come across, not just in terms of technology, but in terms of our group, because our group has changed significantly since I first joined it, as I've recounted already 21 years ago. So I think it's very important, I think, to be open to looking at the new technology. No one's saying you have to go and implement them, but by being open, you're hopefully going to allow yourself and your company to consider there's potential out there that could help improve what you're doing today and possibly add value to what your company is doing. Because if you don't look to improve or look at how you can enhance your processes and the value adding to your company, then there's a danger there that you're going to be left behind. And think of what happened with the pandemic, you know, where a lot of companies are caught short by not going into the cloud or at least considering having that alternative or backup there. Secondly, as I said before, esg, now I know, tedious acronym to use, but it's so important from my perspective. Why? Because it encapsulates for me where we are today in the workplace and who we're interacting with. In other words, you know, the environment, social governance piece. You cannot over accentuate how important that is, not only for companies like Ferguson. I'm so proud that Ferguson has a very stringent training program. So we have unconscious bias training. We have, you know, we belong to the 30% club, which means that the largest companies, certainly in terms of the UK, have over 30% of their board, are gender diverse. We want better, you know, we want more. And this goes across the group as well in terms of our 33,000 associates. But most importantly for me, that new workforce are coming in. They have an expectation and we need to also be cognizant of that. It's not just for their sake, it's for our sake as well. I think it's a good thing going forward. And frankly, this one thing I want to share with your listeners. Do you know what? When people talk about mentors, typically you talk about someone that's more, in my experience, someone more senior than you, someone that's older than you. I want to share with you what my mentors, believe it or not, are my daughters. And I've heard this from one of your other speakers, he's a mentor that's in her late 20s. And the reason for that, simply this. They engaged with technology and today's generation in a completely different way to the way we or I was used to when I was kind of growing up. That's a good thing. I Think because the future is looking more positive from that perspective. I think there's a lot of wrong. Let's say that I think we all seen in the news that this generation are going to rectify my view. But I'll stop there.

I love that. Well no, and I love that. But you know, then the point I would make there, and I disagree, my 11 year old now, he youngest, he, he actually we were at one of the parents evenings and one of the teachers said yeah, he taught me something on the iPad. This was about five, six, six or seven years ago. And we were like, right, he showed you something on the iPad. She went yeah, what he did? He, he said oh, I can't spell that. And she went no, well I wouldn't expect you to. But he said no, but I can do this. And he held on the sound thing, he dictated a question, he had his iPad and it then converted it, then it did the search for him and then he showed this lady, he said well that's how I get my information. How do you get yours? Just like the teacher's just sitting there going, I've just been taught a lesson by a six year old. And she was like he's very advanced. And I said, you know what? And he's always been like that. But you're exactly right, it's because he's grown up with that in his hand. You and I didn't have that, you know, we didn't have that access to technology, but I think this is the norm. Whereas for you and I, when we were growing, it wasn't the norm. The acceleration of it all as well.

And you know, so often when we've grown up, when you know, people have been introduced to something new, it's quite convenient. And I'm not saying it's your listeners, but certainly in my kind of experience to say, well I don't need to know about that, I'm too old for that. It's generally kind of the rationale comes up and to be honest, I didn't think there's any, no question of shame in my mind of accepting or admitting that you don't know something. And this is the thing about learning, right? So this is my last point I would share with your, your listeners is I came across a company, actually I think pretty sure it's not not company, it's food. One of the companies that I attended and the treasurer there shed at our roundtable that he includes as part of the objectives of his team that they spend at least 20% of their time per year looking at innovation, which I thought was quite radical at that time, and this is going back a few years, and I think that's so important. I mean, admittedly, we could argue that that's normally part of everyone's job to kind of look at potentially new solutions or enhancements, whatever, but to have it as an objective, that's quite impressive. That means that they actually go out of the office now. It could be attending a conference or it could be, you know, sort of just to they've seen the solution and thought, well, I want to go and hear what they have to say. But that 20, it doesn't have to be 20%. It could be whatever number you want to make. But the concepts there, which is being open to looking at what you can do to improve your role, your processes, and obviously add value to your company.

Brilliant. We're going to wrap it up there, but I think a lot of people actually, just by listening to that will, you know, if they're reflecting back on their teams. That's what they should be thinking about. So, Royston, thank you for again sharing some top tips with an amazing audience. It's much better than we were three, four years ago. Well, you were great guests then as well. I've got better as well. Much more comfortable and really gratefully Ton. Thanks very much, sir.

No worries. Thank you, Mike. Appreciate it.

Hello, it's Mike here again. I hope you enjoyed this week's show. If you did, then maybe you want to follow the show or subscribe, depending on where you listen, whether that's itunes, Spotify or another great place to listen.

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