So you have enjoyed the light-hearted tone of Peter Matza’s blogs on the ACT Annual Conference 2019 (if you haven’t read them, then these provide a daily tongue-in-cheek summary of each event day, and are available here), but now you have the rather more detailed look at a selection of the key sessions that dominated this year’s Annual Conference on 21-22 May at Manchester Central, another visit to the capital of the north for the UK’s largest treasury event.
Following the welcome and opening by ACT Chief Executive, Caroline Stockmann, and conference chair, Peter Matza, the eminent broadcaster and journalist, Jon Snow, was welcomed to the stage and delivered a fascinating, yet at times controversial, presentation covering both his esteemed career and the times that we currently live in: from populism to the role of the press, and from the role of business to the challenges facing all sections of society. But despite the features of the speech, we now have a new collective noun for treasurers – a “remarkable of treasurers”.
Jon Snow was followed by a continued look at the bigger picture while focusing on wider economic issues with three economists and an expert in political risk, moderated by the well-known business correspondent, Jonty Bloom. From a lively discussion on the future of European integration between Pantheon Macroeconomics’ Chief Eurozone Economist, Claus Vistesen, and former Chief Economist at UBS and now Research Associate at Oxford University’s China Centre and at SOAS, George Magnus, with a debate on whether the European Union’s very survival is under threat. The forward-looking panel assessed where the world will be in the future. Interactive graphics from Elizabeth Stephens of Trendline Analytics showed the increase in political risk in recent years by country both worldwide and then in Europe – although rather negative, considering the challenges widely reported in today’s world, they are far from surprising.
The ACT Annual Conference over the years has showcased many treasury innovations and had many firsts, and this was by no means different for 2019, with Deutsche Bank showcasing an FX hedge live in their track session looking at ‘Managing FX risk in a volatile world’. Featuring Lisa Dukes, Head of Treasury, FX Operations, Drax Group and Stefan Karenfort, Yusen Logistics’s General Manager, Finance & Controlling, along with Deutsche Bank’s Jay Hoffman and Xavier Szebrat, the discussion focused upon the changes in foreign exchange rates and what treasurers can do to manage these, particularly in face of political challenges ahead and ongoing (as highlighted by Elizabeth Stephens in her graphics earlier in the day).
And innovation was front and centre during HSBC’s track session looking at ‘Survival of the fastest: treasury in the digital age’, including an interesting look at the technologies that will affect cash management – those that will have a tangible and worthwhile impact, rather than those mentioned for the sake of doing so. These technologies – including AI and machine learning, blockchain and biometrics, data analytics and IoT – will revolutionise cash management and treasury more widely – an interesting discussion about the role that technology will play in the future.
The second day opened with a discussion with the Bank of England’s Head of Sterling Markets, Rhys Phillips. The message was one of cooperation and the desire for corporates to be involved in discussions – the importance of working together is key and it is best for all when financial markets work well. The Money Market and Global FX codes are to embed better standards of practice by the front door, and is not regulation by the back door, as is often argued. The Money Market Code is useful as it’s a guide to good practice, it is a yardstick to measure counterparties and promotes positive change in one’s own organisation. It is not about creating boxes to be ticked – and if everything works well, then one can be back at home in time for the Archers.
The track session with NatWest explored the possibilities and current status of Open Banking and APIs, featuring NatWest’s Head of Open Banking, Dan Globerson, and Head of Innovation and Strategic Initiatives, Adrian Smyth and we were delighted to be joined by the trustee of the Open Banking Entity, Imran Gulamhuseinwala, who described Open Banking as the best kept secret in financial services – after all, 30% of the audience didn’t know what Open Banking was. It was argued that the revolution that Open Banking will bring will be here very soon, and there is a wish for it to be stable by the end of 2019, and ideally by September. The differences between the UK and Europe were highlighted with Globerson arguing that there was amazing foresight among regulators, the entity, banks and others, to proceed with the standards to make Open Banking a reality. As a result, Europe will be in a position in September where the UK was in January 2018, highlighting the divide between the two jurisdictions. And on an audience question regarding Brexit, Open Banking and PSD2 are here to stay; showing that at least on this, there is one element of certainty on Brexit!
“An interactive audience poll reveals that approximately a third of the delegates present are not fully up to speed with #OpenBanking NatWest’s Head of Open Banking, Dan Globerson, says the vote is pretty representative with what he’s witnessed in practice. #ACTAC19 #NWPayments
The impact, both economically and ethically, of late payments to suppliers was explored during the Barclaycard fringe session. Joining Barclaycard’s Rob Tuckwell was Small Business Commissioner, Paul Uppal. It explored that while there are challenges for a business’ suppliers of paying late – so there is an ethical responsibility to pay earlier – there are also negative impacts on your business to doing so. Earlier payments may lead to more favourable payment terms, and paying late may help your working capital, but it certainly hinders that of your suppliers, and should your suppliers have difficulties, then the entirety of your supply chain is at risk. In other words, pay early and it’s better for everybody involved.
Payments were again in the spotlight in Bottomline’s fringe session. The issue of cybersecurity and the importance of this fueled by the ease of which criminals can conduct payment fraud and the sophistication of the methods involved mean that treasurers do need to be on their guard with the key question being – do you know you are paying who you think you are paying?
And what a packed session the fringe session entitled ‘Libor transition – practical insights and latest market developments for corporate treasurers’ was. As shown by the record-breaking registrants for the ACT’s recent webinar on the Libor transition, this is truly one of a treasurer’s key challenges today. Featuring on this panel was Libor transition aficionado, Shaun Kennedy, Group Treasurer of Associated British Ports, who delivered a fascinating case study bringing together the transition and the challenges, as well as the route that Associated British Ports has taken in being an early adopter of the SONIA benchmark – after all, the presentation was entitled ‘I’m leaving you for SONIA’, a summary if ever there was one on Kennedy’s view on the inadequacy and unsuitability of Libor (even despite recent issues).
Kennedy’s Libor session was one of six corporate case studies that took place on the afternoon of day 2 that looked at a range of subjects from a host-to-host payments process and cash repatriation to funding subsidiaries and digitising finance from a range of organisations including Vodafone, Pearson, BT Group, Air Liquide and Virgin Media.
One of the key aspects of the Annual Conference is the launch of the year’s Business of Treasury report, providing a picture of the priorities, aims, focuses and concerns of treasurers worldwide, and this year was no exception, with key insights including that importance of wise counsel from qualified, skilled treasury professionals grows as organisations and the external environment becomes more complex, as well as the changing role of a treasurer to provide a more strategic and engaged contribution. The importance of qualifications and professional training was highlighted, as well as the ongoing discussion regarding automation and the profound effect that it will have on treasury. The full report can be read here: https://www.treasurers.org/thetreasurer/business-of-treasury-2019
Sustainability was a key feature of the two days, from a fringe session by Lloyds Bank asking whether ESG is the new CSR? to MUFG’s discussing understanding and using your ESG rating; and our VIP leaders’ breakfast, in association with The Prince’s Accounting for Sustainability Project (A4S) also looking at sustainable finance. In an age where environmental concerns near the top of the agenda, the rising importance of sustainable finance at the ACT Annual Conference is hardly surprising.
Day 1 ended with a gala dinner to celebrate forty successful years of the ACT with techno-illluminated dancers providing pre-dinner entertainment, along with the awarding of fellowships, both honorary and otherwise, before some fabulous food, ending with a performance by comedian Dominic Holland.
We finished with a scientific twist looking at the neuroscience of thinking differently, our closing keynote by Baroness Susan Greenfield, assessing the impact of the changing digital world on the human brain. And after a few closing remarks by Peter Matza, that was that; and the ACT Annual Conference 2019 came to an end.
This is very much a flavour of what the attendees enjoyed across the two with the focus here being those session that your author had the pleasure to enjoy, we enjoyed a wide-ranging mix of other track and treasury fringe session as well as the corporate case studies on the many different areas that treasurers have to think about and deal with on a day-to-day basis.
Two intense and successful days were over and we are already looking forward to the ACT Annual Conference 2020 – taking place on 12-13th May at the ICC Wales. See you then!