Ashley Serrao discusses how ICD's platform transformed her treasury management operations, making implementation easy and helping maximize yield on corporate cash. She covers the benefits of the technology and its impact on financial strategy.
You've got an interesting journey with icd. You were a client of ICD or you brought in icd. Can you talk us through that? Because again, it was fascinating to me that you're a treasurer and treasurer who are icd, why do they use them and everything else. But what drew you in or what was the. Explain your journey if you like.
Yeah. While I was working on the corporate development strategy side at Trade Web, one of the things we do is we look at potential acquisition opportunities. That's how ICD came across our radar for the first time. And it was a very interesting story that rhymed with the Trade web story here. It was the, rather than the electronification of fixed income markets, it was electronification of the treasury function. From an investing standpoint. Treasurers bought money market funds picking up the phone or using very basic portals out there. And then ICD was like the best in class independent platform. And so we evaluated several as a consumer in terms of that vision that I laid out, let us establish a best in class treasury function. We looked at many different treasury portals and then what resonated with ICD and why we went with ICD was we felt that the product options were best in class. We had access to everything. And because that was all they did, they were independent. That was the entire existence of the company. The client service was phenomenal. And so if you think about a treasurer trying to embark on a transformation journey, it can be daunting. You don't know what you don't know. Having a partner who has seen other treasurers go down a similar journey has advice, is very responsive. Is Tech Forward willing to integrate with your treasury management system, willing to help guide you with other strategic decisions on the treasury side? That's where ICD added a lot of value.
When you and I had our pre discussion and I, I pushed it back to you, said you don't have to use it if you're a treasurer, but you're leaving money on the table. Could you explain that? Those are your words. Can you explain what that means to some treasurers? I'm not sure, but explain what that means to you.
Yeah. Simply put, are you taking advantage of the best yield you can earn out there without compromising on your risk parameters or principles? And so one easy example is what we did was we cashes primarily at banks. We negotiated rates up. After that there were still certain banking partners, but the rates were not as attractive as money market funds. So we proactively shifted cash to money market funds to making sure that we were maximizing the yield we were getting and the other thing we found with money market funds, especially if you're in an environment where rates are being cut across the global financial ecosystem, money market funds are in a lag. So they often offer higher yields than banks for 30 days, 60 days, 90 days, depending on the product. But there's often a lag that you can capitalize on. So from my standpoint, it was earning significantly more interest, in some cases up to 200 basis points more, without taking a lot of extra risk. Money market funds are tested, they're fairly liquid, they're reliable. You can look at all the underlyings, you can run all sorts of analysis, you look at credit ratings, you can get very comfortable with what exactly a money market fund holds. We're designed to be a cash and cash equivalent at just a better yield on average than a bank account. And so we move a lot of our excess cash or idle cash into money market funds as often as we can. By doing so, we're able to maximize the interest that we earn.
You've been through that journey yourself. Is it as a product plug and play or is there more to go on? We talked about the pipe work. What would you say? Because some people say, hang on, I've got a lean treasury team. You're saying, I'll bring in a new tech. You said you've got a small team yourself, but yeah, that's all very well actually. But then I know you predated this and then getting together, can you explain that?
Yeah, so I'll share with you. At the time we implemented icd, it was a team of two. It was myself and another person. They're really small. And from icd, what made it easy was it was more of a software setup. So you can get the up and running pretty quickly. And from there on it's a function of like, how complicated do you want to make it? Do you want to integrate the ICD portal with the treasury management system and extract or glean more efficiencies? You can do that. And so we invested the time to make sure we were taking advantage of all the efficiencies possible. But at the end of the day, implementation is very quick. Like I said, it's a software setup, but it's not labor intensive, which I thought was also a big selling point. And the other thing I thought was also a big selling point was it doesn't cost you anything. Implement the software. There's no software fee or recurring fee or license fee for using the ICD software. They don't charge the corporate they end up charging the money market fund families. So if I'm buying a fund from JP Morgan Asset Management or BlackRock Asset Management ICD charging BlackRock and JP Morgan and not me, it doesn't cost me anything. It can be quickly implemented. I can make a tangible impact to the bottom line by increasing interest income. I felt it was a win on many fronts and so for me it ended up being a no brainer something we had to do.
As you said before, it's why wouldn't someone use ICD you're just leaving on the table? Would that be the right way to describe it?
Yeah, I think so. I think about it the way I manage my personal finance I get annoyed if I'm not earning the best return possible. Why not apply the same mindset to your own corporate are options out there and it's a question of taking a little bit initiative doing a little bit extra work but it's worth it and it's at the end of day it's not really intensive. A lot of it can be automated too. It's just a function of spending a little bit of time.
