Trends and Transitions in Treasury with Torben Winther

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 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's show I'm joined by Torben Winther, the partner financial risk and treasury advisory at Deloitte. Deloitte, for those of you who don't know, are a leading global provider of audit assurance, consulting, financial advisory, risk advisory, tax and all related services. Approximately 330,000 people globally in more than 150 countries, territories, their culture and purpose to make an impact that matters and is shared by the member firms all over the world. And you know, for those of you who don't, I mean, we'll get into a bit more about Deloitte, but what we're going to do is start with Torben's origin story, how we first got started as a Treasury practitioner and everything else. Take us back if you would, Torben, to maybe how you discovered finance and then transition into Treasury. Over to you, sir.

Thank you very much, Mike. So basically if I go all the way back and I realize it's actually a number of decades now, I went out from Copenhagen business schools and joined a large bank, the trading flow of what is now Nordea. I worked my in the fixed income analyst department providing trading recommendations, monitoring markets, et cetera. At that time, corporates were actually quite active in the fixed income markets. They in many cases did a lot of investments and even speculating proprietary trading. So that was a big client base of ours. And after a few years sitting on the sell side in the bank, an opportunity came to join the A.P. moller Merck group who had a portfolio of bonds that they were looking for someone to manage. And I applied and got that role. So I then moved, you can say to the buy side and became a portfolio manager, but in a corporate setting. So over the next five years I worked basically managing this portfolio of fixed income instruments, also moved into debt interest rate management, so doing swaps and futures FRAs and had, you know, enormous amount of contact with investment banks and following your locals.

So you mentioned there about the sort of fixed income and you know, using market pricing and everything else. When I first started and you know, those are the first days when I started treasury recruitment, we used to do our salary survey then and I used to have a question and we phased out over time was are you a service center to the business or are You a profit center. And back in those days there was an element of you know, being able to trade a little bit but now that's gone, completely gone. I would say. Did you see that transition yourself at the time?

I can completely echo that. So back in those days and we are talking late 90s, many corporates across the Nordics where I worked also in Denmark was not just taking positions but were even aggressively trading.

Yeah.

And the. They even had people who would be market makers and banks joining the Treasury Department and, and really like almost like a profit center having targets, bonuses, etc. Linked to on the back of the natural, you can say flow that a corporate usually does over the years. You're absolutely right. It's has been phased out. Everybody has moved to passive hitching style activities and it's, it's quite rare to see people actually do speculative investments. We do see however now that certain corporations who are not like listed but more family or foundation owned every time they do a dividend it goes up to the owner, the family or foundation, whatever, how it's structured and then it sits there and then it has to be managed again. But typically it's done via investment mandates. Yeah. So you're absolutely right. It's phased out. It's quite rare to see it.

And those days and you know a lot of your background is in Denmark things. So you were based in Denmark and then you sort of developed with the Maersk Group and everything else. What then happened? Walk us through those steps because you were obviously doing all this stuff in Denmark and then.

Yeah.

How did your career progress at that stage?

Yeah. So after doing five years of fund management there was a role to take over the whole front office or the financial risk management for the A.P. moller Mers Group at that time was probably the most prestigious buy side in Denmark and I had a team of 5 to 6 people and looked after the whole FX risk, liquidity risk, interest rate risk, cash management of the Apmolenburg Group. So that was an, you can say expansion of my responsibilities. And over the next five years I had that role. But I'd like to say a few opportunities came along which for me was really defining as my career and interest in Treasury. So the first one was that we decided to have a deep look at our current treasury management system at that time and we felt that maybe it was time for. So it was time for renewal of the license and we felt let's have a look, maybe we should consider a competitor. And I got in charge of that project and we did A rfp and we selected a new treasury system which was Quantum at that time still exist. Then I spend the next alongside my day to day responsibilities, spend the next 12 months basically implementing Quantum. That was really defining for my understanding of, of treasury to really understand the value train between front office, back office, middle office, how you feed data in from market data providers, how you get forecast from the ERP system, how you feed bank statements, how you go the other way around and send payment files and accounting entries and risk reports out of this to really understand all of our say operational treasury. That is something I really advocate. If people get the chance to be involved in the TMS implementation, jump on it. Another interesting experience during that time was we did a huge acquisition at that time, mercenary acquired P and O Netloid which was a big competitor and it was not a typical merger, it was an acquisition meaning that we said we are going to treat all these new businesses, clients, employees, vessels, et cetera as an add on to our existing business. So we would use all our existing setup and I think people quickly realized that maybe that was on the tertiary department side there would be a number of people made redundant. So people started leaving very quickly. So we had to within a short time take action. And I moved to London actually for three months to oversee the treasury function until we could find the merchant. I also later in my career I can come back to that, participating in carving out a business unit and do an ipo. So getting the chance to do some M and A work both in terms of the whole business case, the value proposition, that focus it gives and also be part of a post merger integration. It's again something where you get a really holistic view on treasury and what the value add of it and all the interfaces you have to the rest of the company. So that's again something I'd highly recommend that people get the opportunity to be involved in any M and A restructuring. That's something I would advocate to do.

So you continued growing within the role and obviously you'd spent all that time in Denmark. What then happened next with your move internationally and things?

Yeah, so after another five years having this role and doing various project assignments on the side, I really wanted to try to move abroad and live far away from Denmark. And this was obviously something I'd been speaking with my wife about and it was a family decision. We wanted to have that experience as a family. I had very young kids at that time. Maersk was a place where this was basically an opportunity. I would say if you hadn't said during your interview to Maersk that you were keen to move abroad, you probably wouldn't have been hired in the first place. So there was a lot of opportunities there. And one of them that I spotted was that a lot of huge corporates had regional treasury centers in Asia Pacific. And the reason for that being it was very difficult. Although technology provided you ability to sit centrally and manage treasury, it was very difficult to transact in exotic currencies like Asian currencies. It was very difficult to understand the requirements for cash management. We had in that time in the Maersk Group tons of investments going into China, to India, Southeast Asia, which required a lot of local financing. So I made a business case of setting up a regional treasury center in Singapore. And I got asked a lot of questions about why not Shanghai, why not Hong Kong, why not in this case, this was the best fit you can say for the group where you had most, you can say head office representatives and shipping company set up and made a business case. And the business case on hard numbers in terms of actual savings, in terms of better prices on FX deals, in terms of freeing up tracked cash in the region in itself could pay for the whole setup. But we knew instinctively and also my boss at that time that by just getting out there other opportunities would come up and you would be a much, much better service provider to the business by being present in that time zone. So off I went and basically booked a ticket to Singapore with my family and spent the first couple of months finding office finding staff.

And with that transition, if you reflect back on it now, because around the similar time we had offices in Singapore and it was a very interesting time, you know, went down to a number of the conferences down there with Euro finance and various and finding that it was treasury but just different, you know, the, the way it was treated. You know, some teams were very much more cash management focused around the region. Some were all international. There was a real diversity there. Whereas perhaps the London European markets sometimes a lot bigger as well. The treasury teams, they were a lot smaller. Seen that the roles that people were doing in Singapore were wider and things. What did you find with the team down there? What was it like for you as a transition, if you like?

Yeah, you are exactly right. So being a regional treasury center, we were five people and this was compared to the headquarter where they were 25, 30 people in Treasury. So we were obviously quite small. And there are certain things as a retail treasury center that you, that you don't do. For instance, you are not in charge of selecting A tms, you're not in charge of obtaining group financing or funding at group level. So like any, any capital market activities, any huge revolving credit facilities, asset backed finance, et cetera, all this you obviously was centralized and the same goes for, for risk management. So what we had was primarily a front office setup and a financing or funding setup because we did, as I mentioned before, this is back in 2006-2011, enormous investment going into emerging markets, especially places like China, Vietnam, Malaysia, India, Indonesia, all these places you were not allowed to own, basically your own setup. This was critical infrastructure. We built lots of terminals and that required very often a financing in a joint venture. So basically on a standing loan base. So someone had to make the trip to Mumbai to sit down with banks and structure loans. The same in China, the same in Malaysia, et cetera. So there was a lot of, you can say activity going on in the financing side and also obtaining financing with a bank. It's not just asking for overdraft, this was project finance. So you really needed to understand what's the building, an information memorandum about what this asset is about and what this activity is about, how is it going to make money, what's the business plan, Is it a complete green field, is it a brown field, is this a scale up and how are we going to pay you back and sit and model these cash flows, discussing negotiating covenants, et cetera, et cetera. So this was, I would say although we were limited by being a regional treasury center in the scope, we were also quite broad because we got to work a lot with the financing side as well as complex issues around trapped cash and also about rolling out a global in house bank in SAP. So we were busy rebanking the whole region to one to two core banks, obtaining financing, managing exotic currencies. So we had plenty on our playdate. And from a personal point of view, I would say those five years in Singapore, I had an agreement with my boss. I said I can't sit and wait for you to come in seven hours later than me and then I have to ask for permission. You need to have that confidence. I'll make decisions, I'll inform you if you disagree, we'll do it different going forward, but allow me to have that discretionary, otherwise I'm going to lose face all the time. So he was absolutely keen on that. So I had a very good stay in Singapore. I think from a family point of view, it was probably the time of our life.

Fantastic. And, and you were international by this stage. You say you spent that Time in Singapore and then a short step across into the Middle East. What happened next?

Yeah, so after another five years I realized I've been five years in most of my positions. So after five years I think I've done everything I could possibly think of in this role as regional treasurer for Maersk and it was time to try and find something else. I felt it was also perhaps time to find a new company. I'd been with Maersk at that time for although in three different roles but for 15 years. I did actually speak to, I believe it was you, Mike or one of your colleagues at that time because I was shopping around for other opportunities and one of the feedbacks I got from my CV was after 15 years with the same company, maybe it's a little bit. You need more different kinds of exposures to be really good cv. So I took that to heart, actually decided that also again, it was a family decision too. We wanted to another round finish with our drive and one of the places where I looked around. Where could you move if you wanted to have an international career? I can share this with the audience. I mean the Middle east was one option where people were looking for experienced people from. With exposure from no international exposure. It was Switzerland and it was London. So I basically looked at all these three places and I had dialogues with various positions. In the end I felt the Middle Eastern one was where I could transition into a group treasure role. And also it was quite exotic. So we wanted that experience. So I moved to the UAE and I got a role as group treasurer for a huge private equity fund. And. And this was owned by wealthy family in Abu Dhabi. It was a traditional conglomerate in the sense that it was not about having a core business. Core business was just profitable business. Right. So we were engaged in fund management, in financial sector, in building industry, in real estate, factory, all kinds of things. And again giving the diversity of this group. My primary role was governance, risk management and providing funds and capital for this different business units. Now I hadn't done my due diligence good enough. So when it came to Abu Dhabi where this was placed, this company, from a family point of view didn't really make sense for us. So we ended up working or staying in Dubai. Also my wife wanted to get back into her professional life and she got a role in Dubai. It was actually in Sharjah, which is north of Dubai and I worked in Abu Dhabi, south of Dubai. So we ended up staying in Dubai where we also had good family schooling opportunities. And I basically did that commute which was Quite common at that time.

This was again for the listeners, sort of 10, 12 years ago. What was the state of treasury? And what I mean by that is, was it still startup phase? Were they still going, right, we need this, you know, what was treasury like in corporate treasury as a profession? I know that it's, it's come a long way over the past 10, 15, 20 years. But where, where was it in that journey? At the time?

It was still very much startup and very classic. When I sat down and looked at the Treasury Department from, from a holding point of view, I had to start writing like a Treasury policy, which really back to basis, like what does treasury do from a group point of view? And was all about obtaining financing, selecting bank counterparts. It was allowing business units to do what, what type of risk can you take? But I have to say, given the diversity and also from a system point of view, creating a truly centralized treasury function was not really an option at that time. So it became small governance role and also a little bit, I would say more into FPA, forecasting, liquidity, discussing with banks, etc. So I had an ambition at that time to take it to the next level. But I, I felt it was a little bit tough from a culture point of view and actually for that reason I decided after a few years in the road to move on and back to a European based company which was abb, also had a regional treasury set up, but in Dubai, which is very close to where I lived.

Again, I know the group, you know, the group our listeners won't, you know, maybe from the us. What, the abb? Who are abb?

Yeah, yeah. And I have a funny story about that. I remember because I went to a conference, I think it was a Europe conference, finance conference in Dubai. And I said, so there was some approaching me and she asked where I worked, I said I work for abb. And she said, interesting, Airbnb. So I realized I was in, in the old, old economy and not the new economy.

Yeah.

So ABB is basically originally a merger between a huge Swedish and a Swiss conglomerate, predominantly working in the electricity and power business. There's a lot of different business units there, but it's, I would say really a true pan European company with huge operations in Finland, Norway, Sweden, Germany, Chile, Switzerland. It's headquartered in Switzerland and it's probably one of the most international companies I've ever worked with. It worked as a true matrix organization where you had 20 business units, you know, in five divisions and you had lots of group functions, etc. But it worked Extremely well. It was a very pleasant company to work for. The area that I covered was the Indian subcontinent, Middle east and all of Africa from a regional role. And I had oversight of the treasury operations in 35 countries, which was obviously not something I could do hands on. So I had smaller teams, we call clusters, sitting across this area. And for me, the challenge here was how do you do? First of all, besides currency cash management, what was characteristic about this company was a huge use of trade finance instruments. So guarantees letters of credit in order to conduct project business in emerging markets. So the new thing here was really how do you solve issues hands on in very, very complex territories? And how do you avoid breaching sanctions? I mean, we were working close to Iran, Sudan. We had lots of business going in and out the Middle east, parts of Africa. And how do you secure that you're actually getting paid, how do you make sure you have the right guarantees in place, etc. So I think the challenge was on the trade finance side. We also did provide export credit agency financing, a lot of these. And, and then the complex of the territories that we, we covered.

Yeah, and bring us up to date then a bit more. And so I don't want to run out of time on Deloitte and things.

No. So basically, after spending another SO five years in the Middle east, it was time to move back. So the small kids I had at that time were now teenagers. We wanted to move back to Denmark and I started looking for my next role. And again, this was like, okay, you take a deep breath, what are you going to do now? So ironically, I love treasury, but I was also a little bit tired of Treasury. I now run. You know, I had set up either a group treasury function or regional treasury function three times in a row. I know exactly what to do. You could blindfold me, go into a Treasury organization and shift the system, update the policy, recruit the right people, et cetera, et cetera. So I felt I need to lean out, you know, I need to get out of my comfort zone. And I immediately started thinking back on the sales. So I had some. I reached out to both large bank and a large consultancy to hear about an opportunity to, to use that experience and competence capabilities. But from a sales side point of view, either as a relationship manager or a banker or in consulting and I had discussions and at that time, Deloitte was looking for someone to actually start this area up. So this was a perfect match. They were also looking to merge in the Nordics. So it would be a Nordic role covering treasury, corporate treasury, and we agreed that, that this is what I would want to do.

What was your external view? You probably had consultants come along to yourself and we joked about before the show about you, you bring in a consultant, they show you how to wind your watch and they send you a bill. You know, we were joking about that because I've heard that before. But you'd been a practitioner for 20 plus years to then come and then step into consulting, which brings with it. It's great because you've got all this expertise. But what were your views? What did you, did you come at it with a slightly different angle or how did it work for you?

Yeah. So in my career I can say life is very pleasant in corporate Treasury. And you are the one who is basically selecting consultants and bank. It's natural that whatever challenges you have, and that was also my own philosophy, I'm gonna solve this. What might makes my job interesting. I'm not gonna call for help all the time. I'm basically gonna, you know, work it out myself. That is, I think, very natural to have that. When we use consultants, it was typically around mergers where we simply needed extra hands. You had to come through some transition or it was when you had to do system implementation because you simply didn't have either the amount of people required to focus on a specific project or the competencies. So that's historically where we had been using external help. But it was also my experience that a lot of people who came and helped us was quite junior or they were not really had a background in corporate treasury. And so they knew maybe a lot about the system and how you could set it up, but were basically clueless about the whole functional advisory, about what does good look like. So that was my experience when I joined consulting. That would be my take on working in treasury advisory was basically having that business understanding, having been there before, having sit with that type of issue, know what to expect, ability to look around corners. Also when to work with your important stakeholders. Your cfo, your risk committee, your board, your auditors, you know, when should they be involved, at what stage? This is what I felt I could bring to the table. So off I went to Deloitte again.

We talked about this on our pre call that you didn't start to then go to Treasuries and say, oh, we'll do a health check, we'll do this and everything else. What did you find? As you've grown your role there over the past seven years, what have you been doing? Going out to meeting clients that, you know, you feel Their pain or what? What are you thinking?

Basically, this was a new role to me and it's not like you can expect that people will just call you out of the blue. Now. Deloitte is obviously a very huge professional services company. Denmark is the largest. There's a huge existing relationship, either from the auditors or from our consulting colleagues. I was based in our risk advisory, so there would be obviously internal referrals. So a lot of stepping into this role is basically building an internal network. But also I was very aware that this would not be something I had to work hard on getting this up and running. So I basically took a list of the hundred biggest clients in the Nordics and starting contacting them one by one and basically had coffee meetings until about what are the type of work we do? And slowly, slowly we got some projects. I could hire the first manager into my team. It went from there and it has been slowly growing over the years.

And with that, how have you seen. We've been through a pandemic. It's crazy. I started the podcast before pandemic and then went into it. It was an ideal thing to be doing because people were locked in their homes and, you know, quarantined and everything else. And so that worked. So you've been gone across that as well. But for you, how have you seen treasury evolve over the past seven years when you've been in this consulting role and things, what have been the, you know, the things you've had to deal with, the spinning plates, if you like.

In treasury, there has been some interesting developments and some of this, the things we have seen, as you said, there are some evergreen issues that people struggle with. And all the surveys we do show the same picture. So one of them is basically getting a good grasp of your underlying risk exposure, understanding where they come from, and also being able to effectively address them and hedge them and reduce them. So finding the right quality of data in a timely sense and an effective manner is something that people are continuously working on. Another evergreen is the cash forecasting. Being able not to just look one week ahead, but actually being able to look three months ahead, which is typically where you would do rolling your loan facilities, et cetera, so you don't end up with borrowing a lot of money and at the same time having a lot of money sitting in the bank. Those are evergreens that people are working on. What we have seen as especially during, I would say the pandemic lately is a huge. In energy and commodity risk. So a lot of people have had mandates to manage Commodity risk or energy risk, especially electricity. And because of the extreme volatility, a lot of these risk, you can say programs has proven to be very inefficient. Okay. So people have not been able to correctly gauge their exposure and they have not been able to effectively catch them. And a lot of them have also not been able to obtain hedge accounting, which means they've had huge swings on their P Ls and they have also had to come up with an enormous amount of liquidity in terms of collateral against futures and derivative counterparts. So all these things was basically not so much a function of the pandemic, but more a function of, you can say, volatility, inflation driven by commodity. One of the things that I think I mentioned earlier on, 20 years ago, I felt treasury was quite strong in technology. I remember talking about at that time, straight through processing, we get a deal in here, it goes from record to settlement to reporting, etc. And I only do it once and I reuse the data in every single step and I can never make mistakes. And I reconcile everything. There are lots of new, you could say, technology trends out there. Robotics was very hot a few years ago. We have talked a lot about AI blockchain. I'm a little personally surprised that this hasn't been taken more up in the treasury community. We've seen huge interest in this, especially in huge shared services finance departments trying to lean into some of these technologies. But I've seen a little bit hesitancy in the treasury organizations and part of the reason is probably that processes are not stringent enough. Again, lack of trust in your data will, if you don't believe that your positions are correctly measured, you won't have some robots basically executing a trade on behalf of that. So that's an area where I think treasury has lacked a little behind LinkedIn.

Just going back into your onto the day job but you know, working as a consultant and having a team and things like that, how was it? Transition And I'll qualify a little bit more. We're currently recruiting for a client in the US and they pre pandemic. In fact, they weren't a huge, you know, traveler. You know, they didn't travel huge amounts because not their work. They were sort of only about 10% travel, which is quite unusual for consultancy. I know that I'd spoken to people again pre pandemic, who were they might as well. I'm not, you know, not talking about Deloitte and things like that, but I'm talking about a couple of other consultancies where if you flipped over the card. I talked to one guy in particular. He worked over the course of a year with six different companies and I said, you could have their six logos. It was two months here, two months there. He spent a lot of his time out of a suitcase. Now as we come, we've been through this and, you know, proved that you can use tools like Zoom and webinars and everything else. And how are you finding the transition work, life balance with, say, working in professional services and, you know, how do you see it going forward? Because you must be dealing with this with your clients as well, that they're. Oh, actually we're only in these days, or they might be 100 remote teams. How are you seeing that sort of new ways of working in the new world?

Yeah, so there has been a. I would call it a massive change. So when I started seven years ago, it was not unusual that we had consultants put on projects for half a year. A location could be London, it could be Amsterdam, it could be somewhere in the Nordic region and basically go on a plane Monday morning and come back. We usually Thursday evening, but basically four days a week. Being on site at some place, that was not unusual. It was actually something that we said to people that's something you. I mean, not if you have small children, but if otherwise you should be able to once in a while do these projects. That is more or less unthinkable today. So if, you know, I think about our working style in the office, at home, etc. I think from consulting point of view, it's always been hybrid in the sense that you are so much working on site with clients that you don't have your own desk back in the Deloitte office. Okay. So it's. Everything is hot desks you find in the morning. So it's very common that you only go to the office a couple of times a week. The rest of the time you spend at client side or working from home. We can definitely see that a lot of clients, even if I've offered to go, let's say, to Helsinki for a project, they themselves were not necessarily in the office. It didn't really make sense. So I think once you have established the contact, the trust, the kickoff, maybe in person, there's a massive amount of the work that can be done remote today. Definitely. And I think this is much more convenient for the, for the consultant that doesn't have to travel as much. The flip side is, of course, it's a little bit more difficult to get the contact to begin with. Because you are not naturally around and having, I would say an introductory meeting, a coffee meeting or sales pitch or a, you know, presentation, I don't think it works as well over zoom. I would definitely prefer to have those intros face to face.

And with that, if you're bringing someone into the business now, what are you saying to them? If it's not now, you're out of a suitcase. What's the sort of balance?

So when we're interviewing people and they ask, you know, working style, I would say if you don't work on the client, if you work on the client side, you have to basically agree with the client. What's, what's the right proportion? I typically can see the clients often are looking around two to three days a week in the office and vice versa. You can work remote.

Yeah. What are the new projects that are coming up then? I was just talking to Torben before and was saying that got Kenny Nielsen coming up and he's recently done a project with you guys and there are, you know, other things coming up. What, what are you seeing? Have they changed? As you said, you talked to about straight through processing maybe when you first started in the practice. Now what are the sort of new things that are coming through or what are you being asked to look at?

Yeah, so the typical types of work we engage is where people are looking at either that something has broken down or something doesn't work and they need to transition through something. And it can either be that they're really unhappy with their risk management. As I said, they don't feel they have a good grasp of it. Maybe they don't have the right systems to capture it. And what happens is it creates a lot of volatility on financial items and that maybe raises eyebrows with senior management and they want to get that under control. So really under deep diving, and especially we have seen that within commodity, the other typical situation to get involved is people have a decided to implement a new treasury system. It could also be part of SAP transformation where treasury is looking to implement a new system. It's rare, if not, it never happens, that people say, you know, this is what I have today system. I want a brand new system which is exactly a copy of what I have today. Doesn't make sense. So usually what people would have to do is sit down and rethink what is my operating model, what data do I need to collect, how do I want to measure my risk, how do I want to report it? What can I automate here, what can I schedule in the system? Where can I deploy new technology or data analytics? That is typically an exercise you go through before you even select the system. And then you would typically run an RFP system, have various vendors make presentations. Then the fun part starts which is basically the implementation. And people can often expect nine to 12 months. And that is for not even a very complex but pretty straightforward setup. The other situations we are looking at is M and A. So very often if you have two organizations come together, there will typically be consultants involved in terms of running the whole post merger implementation. So bringing two functions together, following a plan which is laid out typically at the strategy office side, preparing for day one when the deal closes and then preparing for the next hundred days. This is something we quite often get involved with. And again this is quite exciting because it's also time that you can reflect a little bit about what is it you have today. And while we are at it, we're going through these changes as something we should refresh and take a take a look at. So those are also typical. And then I would say a new thing which has come up. The good old working capital which basically people had, they did lots of projects 15 years ago. It's almost like the whole market has de learned good working capital management. Because interest rate was zero. It didn't really bother whether you had the money here or there. You couldn't get paid anyway. But that is a significant game changer. Now that interest has gone to 4 or 5% so those programs are being dusted off. Again we see new providers in this space. It's not just the typical bank. We see platforms coming in. We see a keen interest in this. We also see that people, the treasurer is now getting confronted from their banks not through green bonds but through sustainable linked lending facilities that they need to sign up to certain development in ESG criteria. If they don't meet those, you can say targets within a three to four year period there will be an uptick in the market. So today that you could say premium you would have to pay or the penalty is not very huge. It's down to 2, 3 basis points and it's hardly worth doing it just because of that. My concern is more that the banks will over time not really provide liquidity to certain companies that doesn't fulfill proper development in their ESG ratings, whether it be in scope one, two or three. And therefore that's my concern that treasures will basically have more difficulties in actually finding funding. And that could be a huge limitation to the business. So that's why they need to get into this area and one of the places you could do it is via supply chain financing and building in ESG criteria into which terms you offer your vendors and how quickly you will pay them without giving up, you know, a huge discount. So there's some interesting development going on there that we're having quite some conversations around.

Torbin, I just wanted to come back to it. We're going to go to wrap up in a minute and the tips, takeaway tips for people as we do because we say we keep the show to about 40 minutes or so and you know, don't get too far past that. But I wanted to come back to you talk about systems and I'm not seeking a system recommendation that would be unfair of us to do on the show. But you know, I'm part of a business group and we have a checklist for instance, we're redoing some of our marketing, we're looking at our website, we're doing this. We've looked before systems and things but you see a lot of these systems, you know, you're in between, you're, you know, doing, helping maybe some sort of rfi, RFP and everything else with, with the treasurers that are out there and maybe, you know, without disclosing them, you can say this is what some of them are asking for. What should they be asking for? You know, if they were having a, a virtual checklist in that, you know, don't ask for this, you won't get it or that's too far. What's the sort of the bubble of the systems? You know, cash management. Yeah, great. And as you say, there are lots of bolt ons or lots of systems that do, but then risk and FX and. Okay, and what are you seeing as the fundamentals and what are the add ons? What are the things that people are looking at now?

So I think, yeah, so when it comes to systems, they broadly fall into three categories. So you have, you can say the very small off the shelf software as a service you can basically, you can't do any configuration. You can, you can set up your stuff.

Yeah.

And then you have, I would say the mid size which is typically for normal treasure. A lot of them are like two to five people who would accommodate normally. And then you have the more complex ones which can also handle trading operations. Now typically what I do is among all of these systems, 80% of your needs will already be covered by this system. There's no really need to spend a lot of time figuring out can you record an FX deal? Can I Put in a loan, can I put in a deposit, can I upload a bank? They can all do that for me it's spending time saying where is where are you different from other traditional standard corporates? It can either be your geographic do you have any special instruments you need to cover and where we also see the big difference is what are your needs from a risk perspective, what are the type of risk reporting you have today and need to report on or what is your ambition and also what is your accounting setup and do you run hedge account? Those are the things that will really differ in terms of your requirement and where we need to spend a lot of time also understanding each system. What is the capabilities, what are the use cases they have to demonstrate in order to select because it's if you don't know exactly your detailed requirement and the functional requirement you will tend to end up taking I would say it will become price and you'll just take the cheapest one or you will say the one I like the best. But it would be nicer to know exactly why you made that decision decision but that particular system because it could solve some underlying business.

Again I don't want to run out. You know, don't take too much of your time. You do have a day job allegedly. So you know we will as I say we'll put your LinkedIn details in the show notes as we always do with all our guests. But this is the wrap up of the show. What, what are the takeaway tips to other treasury professionals whether they're early stage, career, mid stage, later stage. You know you've, we, we've already pre warned you about this but what are the tips that you're going to leave people to take away with today?

Yeah, so the tip is I would say try to get as broad as exposure as possible and you can do it in a number of ways. So if you sit in a very large organization, maybe consider going to more mid size where you can see like end to end where the treasury function is not as big because if you sit in one of the big corporates you end up spending become very very deep on one particular specialized area. So one idea is to maybe go to slightly smaller organization but with a broader role. Another recommendation as I mentioned alluded to earlier in this call was if you get the chance to work on a TMS implementation, a selection implementation, this is definitely something that you will learn a lot from and or if you have the chance to be involved in any merger, acquisitions, divestments, etc. That gives you again good rounded exposure to how treasury works. And the last bit is treasure is not just about managing liquidity, managing risk and obtaining financing. It's also about being that enabler who can work across the business, optimizing working capital, optimizing capital structure together with tax, and optimizing even ESG now through various platforms. So having that enabling role, I think is something that you should really lean into.

I'm not going to take any more of your time, guys. We'll put the LinkedIn details for Torben in the show notes. You can connect him. Great to have in his network. A real practical treasury guy working in consultancy. Definitely someone good to have in your network. So thank you very much, sir. Been very kind. Hello treasury professionals. Before you dive into the next episode, could you please help me continue to grow the world's only global treasury salary survey? That's right, our one. We run the results quarterly so you know your compensation is constantly benchmarked against the market and your peer group each and every three months. It's amazing, isn't it? Just go to treasurysalary.com takes less than two minutes to complete, start to finish. You then then gain exclusive, regular updated access to our salary survey, keeping you ahead of the curve. The survey is an evolving breathing entity that constantly tracks the salaries of treasury professionals on a global basis. Currently, we have over 1100 participants taking part. By the end of 2023, I want to hit 1500, but that's where I need your help. Please make it happen at treasury salary. Thank you for being such amazing, loyal listeners. Your support is incredible. Couldn't do it without you. Thank you. Go to treasurysalary.com make it 1500 for 2023. Love you guys.