Meeting of the Corporate Treasury Community ...

Meeting of the Corporate Treasury Community

... at the third #DTRS Digital Treasury Summit in Frankfurt

Ralph Schilling

Partner, Financial Services, Head of Finance and Treasury Management

KPMG AG Wirtschaftsprüfungsgesellschaft


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DTRS 2019

More than 100 participants from the Corporate Treasury Community met at the third Digital Treasury Summit #DTRS at the Hilton, Frankfurt Airport, on 22 October to discuss the latest trends in digitalisation. Ten software providers also offered information on their solutions for Treasury at an exhibition in the foyer.

As with the two prior #DTRS events, diverse issues from current developments in Treasury were discussed; this time this included: instant payment, the use of artificial intelligence (AI) in payment transactions, Machine Learning in Treasury, fraud prevention and know-your-customer processes.

Prof. Christian Debus opened the conference by expressing his thanks to all participants, speakers and software providers – who have made the new Treasury platform a success and also for their ensuring a good reception at this third conference. 

DTRS Welcome

Picture 1: Christian Debus welcomes the participants of the third Digital Treasury Summit; Source: KPMG AG Wirtschaftsprüfungsgesellschaft

Prof. Thorsten Sellhorn from the Ludwig-Maximilians-Universität München gave a keynote speech on digitalisation trends in the finance sector and the future changes and challenges. A core focus was on the presentation of the results emerging from a study on this issue, which he and Prof. Thomas Hess conducted with KPMG. The recurring themes relating to digitalisation continue to be the homogenisation and standardisation of data and processes. The study also shows that new technologies are currently slow to catch on.

An up-to-date overview of instant payments – the story of the "new normal" – was provided by Gerhard Bystricky (GTB Head of Product Development Payments) from UniCredit Bank AG and Sven Korschinowski, KPMG.
Currently, 95% of all transactions are conducted in less than 3 seconds via instant payments, which are available in 34 countries. They reported on new services and business models that have emerged due to instant payments. For instance, receipt of payment information via push notification or "request to pay" are leading to higher customer satisfaction (reverse transfers, ex-gratia payments, etc.) and payment for immediately available goods and services.
The challenges facing businesses lie in having to make adjustments to ERP, shop and Treasury systems. 

Live polling via an interactive app showed the evaluation of the meeting on instant payment as a new future standard, on the risks for real-time transfers and on the change of Treasury processes due to instant payment. The broad range of findings provoked lively discussion during the lunch break.

Fraud can affect anyone – in the truest sense of the word! Martin Bellin reported on a current case in his business. Hackers continue to evolve and are also using new technology. The variety of attacks, including ransomware, fake president or deep fake, make it difficult for businesses to respond appropriately. By backing up workflows, establishing black/white lists, considering sanction lists and using artificial intelligence (AI), businesses can better protect themselves from fraud. Especially in respect of payment transfers, new technology is of major benefit in identifying irregularities if it is provided with relevant data and integrated into decision-making for payment irregularities in terms of organisation. 

Viola Hechl-Schmied from ION Group presented one approach to machine learning in cash forecasting. Various statistical methods were initially compared with the manual forecast and machine learning. The deviations were then considered and evaluated using real historical data. The manual forecast already showed a high hit rate but one day is needed to generate this. An algorithm was trained for machine learning using the data, with the results from this exceeding the forecasting accuracy of the manual forecast. For the algorithm to further improve the quality of forecasting, continuous learning using real customer data will be necessary. Non-recurring effects will also need to be considered and integrated into the model. In return, it is possible to generate a cash forecasting report with higher forecasting accuracy in just a few seconds. 

Speaker DTRS

Speaker f.l.t.r.: Marvin Schmitt (SAP), Egbert Weibel (SAP), Martin Bellin (BELLIN), Kate Pohl (Treasury Intelligence Solutions), Gregor Opgen-Rhein (Omikron), Sven Korschinowski (KPMG), Gerhard Bystricky (UniCredit Bank), Viola Hechl-Schmied (ION), David Hoeren (Deutsche Telekom) und Christopher Lapp (COPS GmbH). Missing: Prof. Dr. Thorsten Sellhorn (LMU München), Prof. Dr. Matthias Schumann (SCHUMANN) und Josef Lueth (BASF); Source: KPMG AG Wirtschaftsprüfungsgesellschaft

Opportunities for implementing new technology in Corporate Treasury

In the subsequent breakout sessions, system manufacturers presented implementation solutions to the following topics: workflow-controlled fraud prevention and KYC processes, new digital banking via account lifecycle management and sanction screening for payment transactions.

Egbert Weibel and Marvin Schmitt from SAP SE presented the transformation path of SAP Treasury to the SAP S/4 HANA platform and the interactive Treasury Executive Dashboard. 
The Treasury Dashboard enables real-time insights into operative Treasury. Risks and opportunities can be identified and trends in key performance indicators analysed. 

Kate Pohl from Treasury Intelligence Solutions GmbH showed by way of example just how quickly an innocent overnight hotel stay in Berlin can result in a violation of the embargo list and to presumed support of a terrorist organisation. This underscores the explosive effect of just how quickly it is possible to violate a sanctions list; yet this is currently not given sufficient consideration by many businesses. Sanctions screening in payments is an opportunity to respond to the high demands of requirements.

Prof. Matthias Schumann from Schumann GmbH took a similar line in another session. He spoke about the relevance of compliance requirements regarding legal provisions and compliance with internal and external guidelines to prevent possible sanction penalties and image loss for businesses. Mounting requirements in the know-your-customer process (KYC) can be facilitated through the use of workflow-controlled fraud prevention.  

Using Account Lifecycle Management – a central information and control platform in new digital banking – Gregor Opgen-Rhein from Omikron Systemhaus GmbH & Co. KG showed how integrating all account-related business processes in an audit-compliant manner into the business organisation can result in lower litigation risks and costs.

Podium discussion DTRS

Picture 3: Final highlight: podium discussion with Christopher Lapp (COPS GmbH), David Hoeren (Deutsche Telekom) and Josef Lueth (BASF); Source: KPMG AG Wirtschaftsprüfungsgesellschaft

Future opportunities and obstacles

Prior to the closing podium discussion, all participants were asked their opinion of the biggest opportunities and risk of the new technology in Corporate Treasury via live polling. The majority of those attending saw opportunities and benefits due to the increasing transparency of Treasury processes and improved management of liquidity and risks. 

Current topics among the Treasury Community, such as potential job loss due to automation and an increasing dependence of the business due to technology providers in Treasury were the subject of – in part controversial – debate by the moderator Prof. Christian Debus (KPMG) with David Hoeren (Deutsche Telekom AG), Christopher Lapp (COPS GmbH) and Josef Lüth (BASF SE) in the podium discussion.

Corporate Treasury will also focus on automation and the use of cost-efficient mapping of core functions, also using SaaS solutions, in the future. In addition, the establishment of heterogeneous system platforms and the rigorous use of technology potential using best-practice approaches will actively accompany the transformation process in Treasury.

There was general agreement that the requirements profile of staff in Corporate Treasury will change. Business are increasingly deploying their staff resources on value-added activities and projects. The scope identified to reduce staffing due to the use of technology will also be made use of in future. Overall, panellists looked to the future with optimism and forecast the rising importance of the Treasury function in the business.

Approaches with practical relevance for Corporate Treasury were presented in the #DTRS events series; alongside various opportunities to obtain information on current issues and to network, this accounts for the steadily growing success of the series.

At the end of the conference, Prof. Christian Debus requested all participants to assist in further developing KPMG Treasury 4.0 and to participate in the KPMG survey on Intelligent Treasury. The results of the survey will be disclosed at the next Digital Treasury Summit, to which all are warmly welcomed. This will take place on 21 April 2020 in Frankfurt with the theme: "Corporates berichten aus ihrer Praxis" [Corporates reporting from their practice] offering participants even more opportunities to actively contribute to the topics.

Source: KPMG Corporate Treasury News, Edition 96, November 2019

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