Treasury has evolved substantially in recent years from effectively being a cash management function that operated in a largely siloed way from the rest of the organisation, to being a strategic and connected business enabler, whether across cash, liquidity, risk or financing. However, to achieve this transition, treasury needs the right tools to provide automation and control of treasury processes, visibility over cash and risk, and analytical tools to navigate the uncertain environment in which we operate.
When I joined ISS, treasury, payment and collection processes were manual and labour-intensive, with an entirely spreadsheet-based operation. The treasury function was largely decentralised, so activities were replicated in different parts of the business, with a lack of consistency in processes and controls. We have around 130 business units, each managing its own bank relationships, which totalled more than 40. With such a large volume of electronic banking systems, formats and security protocols were fragmented and costly to administer.
A catalyst for change
The result was that it was very difficult to create a timely, accurate picture of cash and exposures at a group level, and therefore we could not manage our liquidity or risk effectively. ISS had experienced significant growth, both through organic growth and M&A, and we recognised that we needed a new treasury organisation and infrastructure on which to base it to meet the changing needs of the organisation.
There were also external factors that emphasised the need for change. For example, we recognised that in an environment of risk and uncertainty, we needed to enhance our approach to credit risk management, which was difficult to achieve without either a global view of exposure, or the tools to manage it.