PwC view of trends in technology and treasury SAP/PwC treasury roundtable

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1 view of trends in technology and treasury SAP/ treasury roundtable 9

view of trends in technology and treasury David Stebbings M+ 44 (0) 7801 180018 E: david.stebbings@pwc.

2 view of trends in technology and treasury David Stebbings M+ 44 (0) E: Sanjay Bibekar M+ 44 (0) E: view of trends in technology and treasury Slide 2

3 Market overview Global Survey 2017 View of trends in technology and treasury Slide 3

4 s global treasury benchmark survey 2017 Current treasury agenda view of trends in technology and treasury Slide 4

5 s global treasury benchmark survey 2017 The CFO s priority for treasury view of trends in technology and treasury Slide 5

6 s global treasury benchmark survey 2017 Trends in treasury Specifically technology Trend 1 Trend 2 Trend 3 Trend 4 Treasury is a process and not a department Treasurers focusing on enterprise risk Treasury outsourcing Only 1/3 staff report to the treasurer More use of technology and more process automation Trend 5 Trend 6 Trend 7 Trend 8 Treasury subject to more regulation e.g. KYC BEPS will bring tax and treasury together Renewed focus to make cash forecast process work Need to response to cyber risk view of trends in technology and treasury Slide 6

7 Trend 1 Scope of good practice treasury is not just about the treasury function It is any cash, banking, FX, funding activity/exposure in the business even if not under the direct remit of the treasurer. view of trends in technology and treasury Slide 7

8 Market interfaces Trend 4 - Treasury and cash system functionality Good practice treasury and cash landscape with transaction flows depedent on your requirements External systems Treasury and ERP systems Internal systems Corporate intranet Information to BU s Treasury management system Front office/deal capture/analysis Key reports as required Dealing terminal FX Debt Int rate Commodity Cash FX/Debt/Positions/forecasts Market data Confirmation matching Electronic Banking or SWIFT Payments/Collections, bank statements Middle office/reporting Control Back office Payments settlement Treasury ledger/hedge accounting Analysis/Reporting In-House Bank Group Reporting and L-T Financial Planning Model Group consolidation system Oracle/SAP and Other accounting packages in BUs Trial balance Payment and forecast ERP/Accounting G/L I/C A/P A/R view of trends in technology and treasury Slide 8

9 Trends in treasury technology View of trends in technology and treasury Slide 9

10 Trends in technology Broader technology trends impact treasury technology Commoditisation of hardware Cloud computing Reduction in prices/increase in processing power Reduction in memory prices/ in memory technology Virtualisation Enterprise Hardware Consumer Technology 3D Printers Internet of things Social networking Big data Robotics e.g. self drive cars Robo advisors - growth in automated investment advisory e.g. Betterment Merging of Lifestyle and Payments - new modes of payments e.g ApplePay, pay button on Facebook and new providers e.g. transferwise Crowdfunding loans and equity New user interfaces e.g. wearable technology FinTech software Enterprise software Consolidation of vendors Growth of Saas vendors e.g. Salesforce.com In-memory computing will become a leading differentiator Subscription pricing for enterprise software Mobile CRM and other enterprise mobile apps view of trends in technology and treasury Slide 10

11 The future trends in technology Trend 1 Trend 2 Trend 3 Trend 4 Increase in robotic processing Improved data analytics and reporting Increase in functional coverage of products Increase in cloud computing services Trend 5 Trend 6 Trend 7 Trend 8 Consolidation of vendors Changes to technology costs Changes to user interface Response to cyber risk view of trends in technology and treasury Slide 11

Trend 1 Increase in robotic processing Algorithmic trading Treasury areas potentially impacted a Automated FX trading Impact on treasury organisation Treasury FTE 100% 80% b c Automated investment of

12 Trend 1 Increase in robotic processing Algorithmic trading Treasury areas potentially impacted a Automated FX trading Impact on treasury organisation Treasury FTE 100% 80% b c Automated investment of surplus cash daily Cash forecasting based on historical trends, economic data and rules 60% 40% 20% 0% Now Future HQ FO HQ BO HQ ACCT Region BPO Robots This is in addition to current technology that allows automated compilation of cash positions, bank transfers for non-pooled accounts, trade confirmations, bank reconciliation, accounting and hedge accounting and generation of reporting packs. view of trends in technology and treasury Slide 12

13 Trend 2 Improved data analytics and reporting Big data analytics Treasury - What could change in the future? a All relevant data stored in a single environment instead of multiple databases and platforms b Improved risk management c Improved and potentially automated cash forecasting and bank spend analysis d Real time reporting No download to Excel view of trends in technology and treasury Slide 13

14 Trend 3 Increase in functional coverage of products Function 360T My Treasury Bloomberg SAP FIS Reval Kyriba Trading FX Trading FD Trading MMF Confirmation Market data Bank connectivity TMS Payment factory Hedge accounting Bank Rec Fee analysis EMIR reporting Original New This is not an exhaustive list of vendor and their functionality but indicative of increase in functionality and desire to be one shop stop for all treasury needs. view of trends in technology and treasury Slide 14

Trend 4 Increase in cloud computing services Enterprise applications, Cloud vs Non cloud revenue, $M 210,000 140,000 16,442 23,050 30,349 38,555 46,502 53,050 60,681 67,447 70,000 150,398 149,417

15 Trend 4 Increase in cloud computing services Enterprise applications, Cloud vs Non cloud revenue, $M 210, ,000 16,442 23,050 30,349 38,555 46,502 53,050 60,681 67,447 70, , , , , , , , , License and maintenance Cloud subscription Source: Apps Run The World, July 2014 Vendors already in cloud Trading platforms Confirmation matching TMS for SME market Vendors that will move to cloud Most TMSs excluding bank trading systems Payment systems for SME market Bank connectivity view of trends in technology and treasury Slide 15

16 Trend 5 Consolidation of vendors SAP IT2 SAP Kyriba ERP1 Sungard Richmond Oracle Bellin ERP2 Wallstreet Ecofinance Openlink Salmon TMS1 Reval Treasura Murex Misys TMS2 Kyriba XRT FIS Visual Risk Banking1 Bellin Reuters/KTP ION. Banking2 Salmon Trema Reval Visual Risk Integra-T CitiFinancial view of trends in technology and treasury Slide 16

17 Trend 6 Changes to technology costs 5 year TCO Total cost of ownership Effect on treasury Rental fee replacing license and maintenance fee Software delivered through cloud with no internal hardware/it costs Off-the shelf functionality to reduce costs and limited customisation in SaaS Now Future 4 Transaction based pricing bundled with outsourced labour License fee Maintenance fee Hardware/IT costs Rental fee Implementation costs view of trends in technology and treasury Slide 17

18 Trend 7 Changes to user interface Corporate desktop/laptop Graphical User Interface (GUI) Corporate desktop/laptop GUI Home computer Public computer Mobile phone Tablet iwatches Voice Activated Interface (Siri) Workflow based interface through s Significant increase in spend on consumer technology (phones and tablets) has led to proliferation of devices and user interfaces that a system needs to cater to. view of trends in technology and treasury Slide 18

19 Trend 8 Response to cyber risk Two factor authentication USB security locks Data encryption Penetration testing Third party cyber security certification Hardware solutions for example watermarking view of trends in technology and treasury Slide 19

20 To recap - Treasury is a process - Focus on enterprise risk - Treasury outsourcing - Process automation / robotic processing - Big data - One stop shop products - Cloud computing - Vendor consolidation view of trends in technology and treasury Slide 20

21 Thank you This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it PricewaterhouseCoopers LLP. All rights reserved. In this document, refers to the UK member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details SB-OS

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