Why Resilience is every Treasurer’s Superpower with Gregg Koser

Hello, it's Mike Richards here from the treasury recruitment company. I hope you're enjoying the Treasury Career Corner.

If you are great news, perhaps you.

Give us a rating on itunes or wherever you consume your podcast content. This means that even more treasury professionals can benefit from finding out or by finding out about how treasurers have achieved their career goals. The link to rate our show will list at the bottom of our show notes. And please remember as well, the show itself is as much about you as it is about us. There are specific questions you want us to ask or there's feedback you want to give. Please drop me an email. My direct email is mikeresuryrecruitment.com inventibly enough, but anyway, that's enough from me. Let's get on with the show.

So welcome to this week's Treasury Career Corner podcast where I interview treasury professionals about how they got started within treasury, where they are now, and where they see both themselves and the treasury profession. Going to next this week's show, I'm delighted to be joined by Greg Koza, treasurer of Vanquis Bank. Vanquist bank is a subsidiary of the Provident Financial Group. Provident as a lender was established in home credit market way back when in 1880, so Vanquist itself started a little bit more recently, 16 years ago. Originally growing from a business run by two people to now a thriving bank with over 1600 employees, three locations across the UK banquets actually focuses on the loan grow credit card market approach where within the UK credit card market this is extending credit and high levels of customer contact and they've already assisted 2 million customers in the UK alone and that's what underpins their business model as you'll hear on today's show. Greg originally hails from the us graduating from University Illinois, but since then has grown a Treasury career straddling both corporate and financial services, treasury roles within large multinationals, VC funded entities. So he's developed treasury knowledge again as we discussed was banking, funding, accounting, fx, the lot. That's enough for me as always. Greg, you originally started your treasury career many years ago, but graduated in the US perhaps Take us on the journey of you from the early days of you.

Thanks Mike. Gosh, it seems quite a long time ago I have to say. I don't really like counting up the years.

Yes sir.

But graduated from university way back when and started off in what was then called a mortgage banker in the US which they don't really have a lot of those in Europe at the moment. They issued retail mortgages and commercial mortgages package them up and sell them off as securitized assets. And working in the accounting department I noticed the treasury guy seemed to have more fun. It was more varied work, involved a lot of external, external contacts and dealing with investment banks. So I thought right, let's do that. And that was it really. So never looked back. So it was a conscious decision to get into treasury and moved from the mortgage banker into a large multi service financial services company which was at that time called Associates Corporation of North America. Ended up being owned by Ford Motor Credit. That portfolio consisted of a lot of credit card debt, mortgage debt, truck and trailer financing. And that was my first exposure really to Wall street and dealing with public and private bonds and medium term notes, commercial paper and what have you. Really fun. Enjoyed that. And then got recruited out of there into what used to be electronic data systems, eds. That was in all this? Yeah, all this was in Dallas. So they had hunted me and they were looking to start a Treasury team there. They were owned by General Motors at the time and had an operation in London where they did all the treasury operations for everything outside of the us And I thought, hey, that'd be a great idea, let's do that. And never looked back really. Came over here to London in January of 95 and for various reasons personal and professional, just have stayed ever since.

Well, we've had recently we had Irene Atkins on the show ZDs and Connor Ma, who's HP. So it's sort of bringing together, you know, it's obviously a good proving ground for you guys and your treasury careers.

That was fantastic because it was quite a large operation globally so there was a lot of FX exposure and there's a lot of liquidity in the business but also a lot of need for funding requirements so you could get exposed to quite a few different things, which was great. So did that and then moved across still in Europe to what was called Tricom, now called Yum. They own Pizza Hut, kfc, Taco Bell. So that was a change really. I quite enjoyed that because it was the first time I'd worked in a Treasury role for a retail brand. So it's something much more tangible that when you're explaining it to your friends and relatives, their eyes don't immediately glaze over, get the connection.

And they asked for the discount straight away.

Yeah, exactly. But I didn't give them the keys to the test kitchen.

But.

So that was great. Did a bit of M and A work there too. That was pretty fun. Again, more of a distributed sort of operational treasury role as opposed to corporate centralized function. Because previously the role that I worked in, especially at what was an eds, were, you know, not ivory tower per se, but fairly removed from the business. Whereas working with TRICON needed to be out there in the field with the individual business units, trying to convince them to go along with your plans, whether that be changing your cash flow consolidation methodologies or FX reporting, what have you. So that was quite interesting.

And then you move through that into a couple of different roles before moving to Vantica. But talk me through that, sort of how you build your experience there.

Sure. I think again, the roles so far I'd had up to that point were all large corporate multinationals. This opportunity came up. It was the first venture capital backed role that I'd taken on. Very interesting from the standpoint of. Well, for me anyway, it was my first exposure to the leverage funding structures that at the time were quite common there. So that was kind of the early 2000s. They had things called pick notes, which are horrible instruments unless you're making an awful lot of money because they tend to increase your liabilities in the balance sheet. And if you're not increasing your revenue, you just can't cover the cost of them. So make a long story short, that was probably the toughest role I've had. A, because I hadn't really been in that environment before and B, it was just after 911, so there's quite a large global slowdown in the economy which meant that the business really wasn't viable anymore. So we had to find a white knight seller. And I learned a lot about how vulture funds work on the back of that, which was very interesting. Stressful but interesting nonetheless.

And different sort of different drivers within a Treasury per se, because it's all about the cash and nothing but from the sounds of it.

Yeah, absolutely right, Mike. I mean everyone says cash is king, but until you don't have any, you don't realize what that really means. So that was quite an eye opener really. But as I said, very educational. I look back at that as quite a, kind of a pivotal moment in my career from an educational standpoint.

And then you moved on LCH and then Experis. Talk through those.

Sure. LCH was very interesting business. I did a little bit of kind of personal consulting there and then also as you mentioned, through experis, but that was financial services, clearly a centralized clearinghouse. The flows going through that business were absolutely shocking as far as how large they are when you're used to corporate flows. But very interesting there too because I Got involved in what they call their back office model, which is how they took all the counterparty collateral, would haircut it and then determine the net positions amongst all the counterparties. So again, another interesting viewpoint really on the whole financial services market and how that worked. That went on for a number of years. And then also as you mentioned previously, worked for a company called Experis. Again that was again building on a lot of my previous experience in financial services. And we did a lot of work with asset managers and investment banks around the city with respect to their reconciliation of various middle and back office systems. So that went on for a number of years. Getting very interesting, Greg.

When we talked earlier in the series, in a couple of episodes with Connor Marr and he made the move from corporate, been in banking, corporate treasury, back to banking and then Nick Taylor came from corporate treasury and now is the treasurer, you know, a second episode with Schroeder. So he was talking about how different financial services and the, you know, the product being money, you know, whereas, you know, the product HP or various other might be consulting or might be. How did you find that transition from sort of corporate with products as such, you know, specialty chemicals, whatever it might be, through to then financial services? How was that transition for you?

I think that's a very good assessment really because it almost doesn't matter what industry we're in. The concepts generally are all the same. The drivers might be different of the underlying commercial model which you need to take into account. But essentially there's certain risks that all businesses will have once they get to the point of deciding to need a treasurer. It's liquidity risk, interest rate risk, you've got funding risk, what have you. So again, I would concur with that assessment and that it almost doesn't really matter. I find it more interesting to. As you can probably tell by looking at my career, I'm not afraid to take risks. I'm quite happy to look at different industries and situations that I've not been in before because I know that based on what I've done in the past, I could probably find something that I can apply.

Put it out of your back pocket sort of thing. You know what to do in the certain situation, as it were.

Yeah, you might not know the detail, but you know enough to figure it out.

And then the move into sort of consulting as such, with experience or.

Yeah, I think part of my, part of my reasoning there was to try something different, to expand my experiences a bit because previous to that the majority of it had all been corporate treasury, one form or another. And getting into consulting, I think what attracted me at the time was the ability to have multiple experiences with different clients on different engagements in a relatively short amount of time. So you can see more of a variety of situations faster in consulting than you can in the corporate in most cases, which was the main driver for me really.

And with consulting, a lot of people complain to me that they sort of do the role. And as a consultant, you go in, you help people bake the cake, you show them the ingredients and then you're sort of pushed to one side, they close the sort of glass door and then they either put the cake up on the shelf and say, oh, lovely cake, we'll use this one, or they choose parts of it and do it. You know, how did you deal with consulting in that way? You know, having to deal with clients and things like that, or. And also the other bit, you know, is a profit model as well. You've got to deliver the assignments, you know, was it that sort of ethos or what was the difference?

It definitely was the latter. End of the day. There is a business model that requires certain utilization rates for your assets, which are your people, but to keep your clients happy, they have certain things that you need to deliver for them. So I looked at it as coming in to fix a problem. Generally, that's what we did. We weren't necessarily in the space where we offered more longer term strategic solutions. We were more tactical, come in and fix an immediate problem, which I was fine with along the way. If we could deliver some tools that might help them going forward, that was great. But for me it was very. The engagements that we worked on were more shorter term and focused on very specific deliverables. So that for me, intellectually that sat fine. I didn't have any problems with that at all.

Talk through then the move to, how do you say, Marcadis, is that right?

Yeah. So that was. After doing consulting for a while, I decided that I really wanted to get back into to treasury because I missed it, to be honest. So this was a startup merchant, car acquirer by a big Icelandic credit card bank. And that was quite interesting. It literally was myself, the MD and a couple of people in the office when we started it. So I've gone from quite big corporates to really small and I think it was educational. I enjoyed it because you, you have to become more of an individual performer and get exposed to an awful lot of things that you kind of forgot how to do because there's no one else around to do. It. So that, that was interesting. But then they decided to pull that function back into Reykjavik and I decided that, you know, as lovely as Reykjavik is, that perhaps that wasn't really where I wanted to be based.

Yeah, London was a bit warmer.

Yeah, a little bit warmer. Yes, indeed.

And then. And then. So you joined Wonga.

Explain that.

Yes, yeah, so that was quite interesting. It was really. It was a blind advert that I responded to, just thinking, right, wonder what these guys have to say. And, you know, thought long and hard about it. But by the time I joined them, they had already been licensed by the fca. There had been a complete change in management structure and practice. And I thought a lot about the business model, which I actually thought was a good business model. The problem they ran into, which has been all over the press, everyone knows there were just some negative impacts from historical commercial decisions and practices which, as we all can see now, probably weren't as good as they could have been.

Yep. Had a future effects on it.

Yeah, exactly. So spent a couple years there and then you and I chatted and got me to where I am now.

So Vanquish Bank. So I gave a bit of the header of the show, gave us sort of a bit of an outline. What was it that tempted you? I mean, I know this, but perhaps for the listeners, the move from Wonka to Vanquish, what was the difference or what were the pull factors to why would someone work for Vanquish?

Sure. I think what interested me about it was the size of the organization was appealing to me. It's very well capitalized, it's very liquid, it's part of a larger group. My two previous roles were with much smaller organizations and I think it could be told probably slightly too small for my taste, but until you try these things, you don't really know. But also one of the big appeals for me intellectually about this role was the requirements that we have with respect to regulation because they're regulated by both the PRA and fca. And one of the primary responsibilities I've got is are kind of three tiers or three significant regulatory reports around icap, ILAP and Recovery and Resolution Planning. So for me that was really one of the main draws as far as the content of the Rolex, I didn't have vast amounts of experience to that.

With that. You know, just again, for a lot of the guys I've spoken to listen to the show, they're earlier stages of their careers, so they're not necessarily going to understand what pressures being FCA regulated and PRA regulated, you know, from your position as a treasurer, how would you describe it? And you know, maybe someone was coming to join you and they said, oh well, so what, you know, what's the difference of being FCA regulator, PRA their organizations. But perhaps people don't understand the effect on your role as a treasurer. How would you describe that?

Sure. With respect to my role here, the FCA regulation generally applies to looking after one's customers. So for me we have a deposit program where we fund ourselves through retail deposits. So in essence those are another segment of customers for the bank which I'm responsible for. And the FCA was very interested in how we look after those customers and how we treat them. So we've had monthly conversations with them about where our pricing was going and how we were using the funds. And it all kind of boils down to, for them, what exposure do they have? Should there be, God forbid, a problem with Banquist and they have to step in as part of the FSCS insurance program and bail out certain, certain customers. So, you know, we got into conversations around managing their exposure to us, which is quite interesting. But thankfully they're comfortable now with what we're doing and that's no longer on the monthly standing agenda. So I'm quite pleased about that. The PRA side is different. That's effectively regulation of, you know, financial services institutions and their impact on the wider financial services. So they're looking at our viability as a firm. So there's a lot of things out there that we have to do around stress testing. They come in and they'll pour over our capital adequacy reviews that we do internally. They'll have a lot of questions around that. They'll look at our funding plan. I know one of my deliverables will be with this next funding plan. The resilience of it as far as sources we've got available to us because we're ring fenced from our holding company. So we effectively are and need to operate and look after ourselves as if we are truly standalone. So there's a fair amount of pressure on that because all that stuff goes straight up to our board and up to the group board. And as a FTSE 250 entity, it's public information, so it's quite visible.

Yeah, and with your, you know, you've been through these number of different roles across your career. How have you seen treasury sort of change and develop and evolve sort of thing from, you know, you know, let's take it back. So, you know, maybe your Times at hp, Yum to now. And this role, because you've gone, made that career path corporate through FS treasury and you're doing this. But treasury as a whole, how have you seen it change?

I think over the years it's become more strategic and partly down to some of the roles that I've found myself and I think. But generally speaking, historically my view of treasury was that it used to be more of a back office operation and not as connected to the business as it is now. One of the things we have on our plate here, one of my direct responsibilities also involves IFRS 9 provisioning which is directly linked to the performance of the credit card portfolio. So we spend a lot of time working directly with the business leaders, the guys who are doing for instance, the operations side, but also the pricing components that go into that. So I think that's just an indication really from my view, even in other roles I've had where you have to understand what's going on in the business itself, much more so than I've, I think it used to because it used to be more around just doing cash management, making sure there's enough funding available. That was kind of it. But capital is a scarce resource now. So I think the better you can understand the business and more accurately deploy that capital, the better off the firm clearly is going to be.

I think also Greg, you and I have talked about this as well. People have said to me, what's the difference when you recruit up to 100k and then do above it? And I think you're right there because up to 100k it's do you tick the boxes technically, do you have this and everything else and as you move above that, you're then looking strategically about how does your handshake fit, does your face fit. But when I say that, you know, people say, oh, what, you know, just, do you get on with the fd? No, it's not about that. That's, that's the first bit. But then it's, are you going to fit with the other people within the business? When I was recruiting, you know, and we said this, you know, a place, Greg and his role at Vanquist and you know, from when I was being briefed on the role, they were saying we want people that are going to fit in with the business as a whole. We want a treasurer. That's, you know, it used to be when I first started, 20 plus years ago, you know, slightly ivory towered the senior roles in Treasury. A lot of the times, like I'll look after the money. Now it's the total opposite, if you like. And certainly, you know, you and I have talked about this because you know, you've got that with your team as well. Do you want to describe how the team, you know, is structured with you guys as well?

Sure. I think it's, it has changed and my team structure has changed along with that, as have their requirements for them, which, you know, Mike, I think you, we've chatted about with respect to a couple of roles that we've got going on here. But it's more than just simple spreadsheet work and accounting. You need to have kind of a broad view. You need to be able to engage the business and, and be self sufficient and actually go out and talk to people in the business and find out what you need to know. And it's not just going to be handed to you. I think communication skills are so important. I think communication skills not just written, but interpersonal too because that's how you find things out, that's how you get things done. And also I think the ability to learn, we don't, we're nowhere. I know I'm not done. I have still a lot to learn and I hope I always feel that way. So in addition to communication skills, I think I look a lot for sort of intellectual maturity and curiosity and also resilience. Resilience is a big one because things aren't always going to go your way as much as we'd like to think. Everything that we plan is going to go perfectly, usually doesn't. So it's what you do. And when you run into little bumps in the road, so to speak, because it will happen.

And when you, you know, when you are recruiting, what, how do you assess those people you talked about that resilience, how are you assessing those, you know, people at interview just say, all right, how resilient are you then in this or give me an example or you know, how do you measure that?

So I think you can find out a lot by asking people about failures. Really. When does something not go right? What was the biggest mistake that might have been made or biggest obstacle one had to overcome? Because I think a lot of people have said it before, but one can learn more from failure than success really. And I think having a couple scars here or there is not a bad thing. And it's also, I look for people's eloquence in being able to tell their story and how they can tell me what were the major things that they got out of each role, why they moved to the next one, what they were looking for, because some people are quite focused and good at that and others tend to kind of, they've ended up in a role because it landed in their lap or others have more of a focus and they know exactly what they're looking for. And I tend to kind of look for that.

Sounds like a bit as well. I spoke in the Austrian Treasurers Conference. I'm saying to these guys, they have to have the elevator pitch and they have to perfect it, because I'm not saying they're all sales guys and they're in sales focus roles, quite the opposite. But within treasury, it's about telling your story. I know that you did very effectively when I put you forward to Vanquish, and that was a standout feature for yourself, but it sounds like you, you're also trying to coach those guys further down within the function. Would that be right with those guys, do you think?

Yeah, absolutely. It doesn't really matter what level one's at you still. I think still it's helpful to be able to, you know, very relatively concisely a you got to know yourself and what you're good at and so you know what your strengths are, but also what one's weaknesses are. And I think the ability to communicate your skill set in a brief number of words is quite valuable.

And as treasury develops for you guys and also looking to the future, we've got a few bumps in the road. The inevitable Brexit. Yeah, get over it, carry on. But looking to the future and development of treasury, what are you seeing to plan for those challenges and what do you see coming down the road? Something.

Difficult question for us, because I think the answer for us, when I say us, is banquet is probably different for the industry itself in a larger economy. I think Vanquish is very UK centric. We don't have a lot, we don't really have any non UK exposure to speak of. So for us, the big driver will just be the health, financial health of our individual customers. And clearly Brexit is playing on everyone's mind as to what the impacts are going to be in the wider economy there, because that will flow through eventually to us. But I think, I think the changes that some of the open banking regulation are bringing in will be quite interesting because it allows a lot of other players into the markets that traditionally have been held closely by the high street banks. For instance, some of the big money transfer businesses, now they're offering bank accounts, which is an interesting concept if you think about it, because why Wouldn't they? Because they're good at transferring money and that's kind of what you have a bank account for, so you can move your money around. So I think there'll be a lot more competition out there from a lot of different sources that we've had in the past.

I think also there's a lot of payment companies out there as well. There was some news just the past few days where entrants by China are looking at taking over some currency exchange firms and they're doing lots of different things. It's quite. Lots of different things seem to be coming into the UK and Europe certainly when we're talking, but it sounds like that that will have an effect on someone like yourselves, but less so in that way. But for the future of treasury, you know, more developments with it and things like that. Is that going to be coming along with you guys? Everyone talking about, you know, automation and things like that, but it sounds like you've got a handle on that already or.

Well, I think personally from our perspective, we've got a bit more work to do on that, but I do think technology is. Is moving us forward in leaps and bounds really. And it's all about how you can get these operational repetitive tasks systematized so we don't have to deal with them, with people and just happen you still need people to do the thinking, the heavy lifting part of that, I believe.

Okay. And looking at you and your career, someone you know. And again, at the end of the show, what we will do is in the show notes we give greg link on LinkedIn. I know we've spoken about this, so it's a good way to connect up with him. But you know, looking across your career, someone looks at. Actually that sounds like the sort of career I'd like to do. You know, what would. What advice would you give to someone if someone wants a career as successful as yours? What? You know, someone walks in. Ah, yeah, that might be quite nice actually. What would you tell them to do?

Not be afraid of taking risks, for instance. So I think you should have a look at some of the things I've done. I mentioned this briefly earlier, but I've worked in a number of different industries, small and large companies. I think that's all led to just widening my knowledge base. I also think that another thing we touched on earlier was resilience. Things aren't going to work according to plan all the time. So it's also just a matter of figuring out what you do when things do go wrong. They will at some point, but also I think there's that intellectual curiosity, too. I don't ever want to feel like I'm done, like I'm finished. I'm still looking for. I don't know exactly what the next challenge is, but I'm sure there will be one, whether it's here or somewhere else. There's so much for me to do here. I can't really kind of get past the vanquish stuff at the moment, but I think just be curious. And also I think communication skills are important. Not just emails I said earlier, but I tend to, I'll get up and go talk to somebody face to face. I think that's the most effective way to get things done. And you can't always do that in larger corporations, of course, but it's, you know, relying on communication skills other than just email, I think is quite important.

Yeah, connecting with people.

Yeah, exactly. It's all about people. You can't get anything done without people.

Well, I think that's a great way to wrap up today's show. I think it was a good, short, powerful one. We got through your background and everything else. As I said a moment ago, best way. We'll put Greg's LinkedIn profile in and have a look there because you'll see the way that Greg's developed his career as well. Any final words, or do you think people should just look at that and say, right, this is what they need to do? Be resilient and think about the future.

Absolutely. Don't be complacent. Take control of what you want to do and where you want to do it and when you want to do it. And I'm more than happy to have conversations with people down the line if they wish.

Superb, Greg. Thank you for today. Great show. Short, sweet, to the point. So thank you for your time.

Thank you.

Thanks very much.