00:00:07: Welcome to a new episode of EFZ Talking Finance.

00:00:12: In today's episode, we explore a topic that is gaining increasing importance – the evolving strategic role of Treasury within organizations and how collaboration between CFOs and Treasury functions are changing.

00:00:27: Our discussion based on recent study provides insightful perspectives about priorities and challenges faced by CFO and Treasury professionals.

00:00:37: We will touch on topics such as rising market volatility, the growing importance of liquidity management and how finance functions can work more closely together to create real value.

00:00:49: I'm very pleased.

00:00:50: welcome an expert in Copper Treasury and Finance Transformation today.

00:00:56: Joining us is Sophie Boyle, a Treasury Consultant at Zaunders and FCT Qualifier Treasurer with more than fifteen years experience spanning corporate treasury and finance transformation.

00:01:09: She has built her strong advisory background through work with firms such as PWC & Zaundars combined with hands-on experience within corporate treasury functions guiding organizations as they evolve and strengthen their capabilities in an increasingly complex landscape.

00:01:29: In addition, she is a trainer on the Association of Corporate Treasures A-II Set of Treasury Program helping to develop next generation of treasury professionals.

00:01:40: Originally from UK and now based Switzerland Sophie offers well rounded perspective across treasury and transformation initiatives complemented by her entrepreneurial experience as the founder of a legal tech company.

00:01:55: So Sophie, it's great to have you with us today.

00:01:59: Thank You very much Thomas for that warm introduction.

00:02:01: It is an absolute pleasure to be here.

00:02:04: As mentioned we came together today To talk about recent study conducted by Zaunders.

00:02:10: Can you give some background on the respective survey?

00:02:14: So we designed a survey.

00:02:15: We targeted responses from the CFO and roles within the office of the CFA, so that's finance directors, treasurers, treasury team members, FPNA controlling accounting to really examine the shift is happening at the moment in finance with everything going on around the world.

00:02:34: Yeah this already leads me into first part.

00:02:37: our discussion And thats about strategic rise had a closer look at.

00:02:46: So one of your headline findings is that treasure's importance has increased significantly, so on my side I like to hear that because i'm also into treasury from let say developing sites in order to come up with the correct training for treasures.

00:03:06: and what's driving this shift?

00:03:13: There's a few things driving the shift and The key thing to know is that they're all pointing at one thing And that is that Treasury is now at the center of financial resilience.

00:03:24: So One thing for example interest volatility.

00:03:28: We've had years of stability, but now we're seeing a lot of movement in rates.

00:03:33: This has led to funding decisions being much more complex.

00:03:38: For example you know if you think about refinancing If you do it at one point in time versus another point, that can have a significant impact on cost.

00:03:48: And so timing market access things like this has become more strategic.

00:03:54: This is playing into Treasury's remit.

00:03:57: Then there are banking sector instability refinancing risk regional bank failures, we see that happening at the moment and this puts more emphasis on counterparty risk and liquidity diversification.

00:04:15: And then at the same time you have companies um At the same Time facing large volumes of debt which are maturing over The next couple of years so that bunches together a lot Of debt maturities from different companies.

00:04:30: refinancing is no longer routine, but it needs active planning.

00:04:34: It need scenario analysis.

00:04:35: again.

00:04:36: that sits with Treasury.

00:04:38: You have cyber threats payment fraud Treasuries on the front line of managing all these risks.

00:04:45: in some sectors The Ford rates are extremely high.

00:04:48: interestingly Its its where there's a lot to gain or were decision-making as very fast.

00:04:54: so online gambling Gaming sites banking crypto these industries and it's making controls and governance a lot more critical.

00:05:10: One more thing, liquidity resilience.

00:05:13: so companies need to know that they can withstand the shocks that are happening in the world at the moment whether thats market volatility supply chain disruption funding constraints treasury is really at key position of all factors playing in.

00:05:33: So yes, this is pushing Treasury really from being a control function to be like a pillar of stability enabling stability and also helping decision-making across the business.

00:05:46: Yeah that's my intention or view on topic.

00:05:50: we have increased volatility.

00:05:52: We've had lots new threats and developments outside.

00:05:57: so Is it still just reaction to recent volatility?

00:06:03: or is this increased importance really a structural change within the whole finance function?

00:06:10: What's your take on that.

00:06:11: I would say it's both, you have like a cyclical element but you also have a structural shift and these are both happening at the same time.

00:06:22: so yeah as we just discussed there's a lot of accelerated treasury strategic role.

00:06:29: Suddenly, treasury has become more of a board level discussion.

00:06:35: Some other things you know liquidity funding counterparty risk.

00:06:38: the Board is now interested in these things and then that naturally pulls Treasury towards strategic decision-making.

00:06:47: But I would agree with you there is structural change happening as well And this side i think doesn't just go away when the market stabilized.

00:06:58: so Treasury is becoming more strategic because they have data available, there's digitalization.

00:07:07: You now have the possibility of things like real-time cash visibility.

00:07:13: There are APIs delivering data.

00:07:15: you've got advanced forecasting tools and so this means treasury actually can provide insights.

00:07:22: They're not just reporting yesterdays cash position but really forward looking useful insights.

00:07:29: this makes scenario analysis possible and then things.

00:07:34: so when the CFO can have a better picture they can make funding decisions, risk decisions capital allocation decisions earlier.

00:07:43: And also with more confidence.

00:07:48: yeah I think those are highly important.

00:07:50: to have a forward-looking Treasury department or Treasury function and leverage the data which you already have at hand.

00:07:57: To make it, make proper use of that as mentioned like having support role for decision making.

00:08:05: from financial perspective this makes sense.

00:08:09: going in this direction although I think is not so easy.

00:08:14: Yeah, these are very important points.

00:08:17: So from your experience is Treasury now truly positioned as a strategic partner already or it's still underutilized in many organisations?

00:08:30: I would love to say yes but i see that most significant number of treasury teams aren't fully there yet.

00:08:38: so historically Treasury was always seen as operational support and it takes a bit of mentality shift to move away from that.

00:08:47: You still see a lot of teams, treasury teams.

00:08:49: they're spending time on operational things like cash positioning payments debt administration And these are all critical you know?

00:08:58: These have to happen but its not where the real value sits.

00:09:03: Treasury is also sometimes brought into decisions pretty late once direction has already set.

00:09:11: Where where Treasury becomes a strategic partner is whether insights are integrated earlier, so particularly around capital allocation and risk.

00:09:20: I give you an example.

00:09:21: So if the company is considering an acquisition treasury can Give key insights on funding structure liquidity impact market timing And that could really make a difference.

00:09:36: or another example in a volatile environment Treasury's view on liquidity buffer or refinancing risk, this can shape the business' view of how much risks they are taking and how much risk their willing to take.

00:09:52: So yeah I mean it is not really just about treasury doing more.

00:09:56: its about connecting what they already do ,what positioning themselves as a strategic partner.

00:10:08: It's interesting that you mentioned this because, uh...this year we also have a treasury summit in September and the title is Unlocking Value.

00:10:16: so it's really good fit what you've mentioned by creating real value, creating value providing insights and helping to enhance risk management.

00:10:28: I think these are very important aspects In order to help the company move forward from a financial perspective and also yeah

00:10:39: Yeah, absolutely.

00:10:40: I mean it's is the future in and Companies that do this will have a competitive advantage compared those they don't.

00:10:50: This leads me also to our next kind of chapter which is that a treasure isn't operating isolated in its own world, it's always embedded into the company.

00:11:02: And one of most important other roles which a treasure is working together with CFO.

00:11:09: and you also shed some light on this kind of relationship and priorities.

00:11:15: so CFO vs Treasure is our next discussion topic.

00:11:20: we could title it One Agenda Two Perspectives.

00:11:26: They largely agree on priorities, and you made some really nice graphs.

00:11:32: We linked the study into show notes but you emphasise different aspects of how that came through in your report.

00:11:42: so what were your findings?

00:11:47: What we saw from the report very clearly is that CFOs and treasurers, they are aligned on the core priorities.

00:11:54: Things like liquidity capital structure cost efficiency digital transformation.

00:11:58: this they agree on but they rank them differently.

00:12:02: so CFO's tend to prioritize cost optimization transformation.

00:12:07: Treasurers have more emphasis or weight on liquidity costs of funding things.

00:12:15: Yeah, I mean liquidity for example.

00:12:16: it's important to both but for treasurers its of course number one and CFOs is slightly lower down the list.

00:12:26: It

00:12:27: was like number one for treasures as usual?

00:12:29: But like number three for CFO in the report

00:12:33: indeed And this makes a lot sense because treasurer they have day-to-day exposure.

00:12:39: Yeah,

00:12:46: maybe I also if I may add here.

00:12:49: I went on the respective graph and from a CFO It's more like having top priority.

00:12:55: number one is like cost optimization and efficiency And this second one it's like more going into the digital transformation overall of the company and The cfo function.

00:13:09: just to clear why it's only number three because there are other priorities on top, on the list of our typical CFOs.

00:13:19: Yes absolutely but there is an interplay between them as you cannot have cost optimization if you don't have good forecasting.

00:13:28: so this how they support eachother and this.

00:13:40: We have this difference, we have these different priorities.

00:13:45: What does this tell us about?

00:13:47: how the CFO office if you look at this organization and call it a CFO Office?

00:13:52: How does it actually operate in practice?

00:13:56: Yeah so what we see with report highlights is that The CFO offices has kind of two different perspectives but they are very complementary.

00:14:07: So one side strategic and one side is more operational.

00:14:12: Not to say that Treasury is only operational, but they have the operational lever which they can use to be strategic.

00:14:20: so on one hand The CFO of course is focused on the bigger picture.

00:14:24: They're looking at the long-term strategy And the enterprise performance how the business grows.

00:14:29: So they need to think more about where to invest?

00:14:33: And respond to the immediate market challenges How to position the company in a kind of thing Whereas the Treasurer on the other hand, they have their real-time financial mechanics if you like.

00:14:45: They are making the strategy possible and this is why they need to focus more on liquidity funding cost of funding Making sure that the company can meet its obligations as in when.

00:15:01: So yeah, you have a natural division of roles in that sense with the CFO setting direction and then Treasury enabling business to move in an agile way efficiently towards the CFO's direction.

00:15:17: It makes a lot of sense yes?

00:15:19: And nicely put...in an agile ways!

00:15:23: Imagine like a panther moving agile

00:15:26: through the jungle.

00:15:28: That would be great in a fashion like this.

00:15:32: So, in your view is divergence healthy or could it create also some blind spot when we have the strategic and more operationally focused views?

00:15:47: It's definitely healthy but up to a point The difference in perspective can actually be strength.

00:15:56: For example you've got one One side focusing on the long-term strategy and performance, then another time is grounded in liquidity.

00:16:09: This can be a powerful combination.

00:16:12: however when two perspectives are not connected that's where you have a blind spot for example if CFO underestimates certain financial risks or And that can happen if Treasury is not pulled into strategic decisions early enough.

00:16:34: An example I really like, this came through very clearly in the report... ...that the CFOs are focused on cost efficiency and it makes complete sense.

00:16:44: but you have to think about Treasury's perspective.. ..if they affect their automation or risk management.

00:16:55: This is how a blind spot can develop.

00:16:58: It limits their...

00:17:00: They can interfere what they are doing to certain extent, this makes...

00:17:06: The different views and not the issue but it's possible lack of coordination which really is

00:17:11: an issue.

00:17:13: That also one my key insights.

00:17:16: being active in a few years of treasury management this coordination amongst all the finance functions in detail, so more accounting looking back having controlling looking forward like more than one year or even a mid-term planning horizon and treasury within this spot between to certain extent.

00:17:42: Having these real time cash liquidity in focus Twelve months into the future also especially from a liquidity perspective.

00:17:54: This makes a lot of sense and needs a lot Of cooperation within the whole CFO office or see for organization.

00:18:03: Absolutely,

00:18:04: this leads me to the next topic which I kind of highlighted And would like to discuss with you due to the survey, so it's about forecasting volatility and financial resilience which were already mentioned earlier on as one of the main reasons for shift.

00:18:25: Which we see that treasury becomes more important.

00:18:29: And One finding was highly interesting my eyes Amongst many is that forecasting accuracy And market volatility are two sides of the same problem.

00:18:45: So what did you mean by that?

00:18:47: Could you

00:18:48: elaborate on that?

00:18:50: I love this point.

00:18:51: so we mean, but that is CFOs and treasurers.

00:18:54: they're listing these different problems But there's kind of listening to the same program CFO.

00:19:02: They see volatility at a macro level.

00:19:04: So they looking at market uncertainty geopolitical risk And treasurers are also seeing that, but they're experiencing it in a more direct way.

00:19:15: So there's seeing you through forecasting errors or liquidity gaps or unexpected cash movements and It is basically the same problem.

00:19:24: so if the problem is how do you translate uncertainty externally into your internal financial forecasts?

00:19:33: How to get that visibility?

00:19:35: because You know, I'm sure you agree that volatility is only an issue if it cannot be accurately reflected.

00:19:42: If it can not be planned for in scenario planning Yeah, because

00:19:48: yeah would also add stress tests Being sure what happens?

00:19:53: What could happen?

00:19:54: being kind of prepared if if you expect a certain market movement Then you can prepare yourself for that as a Treasury organization, but if it comes highly unexpected then You're running into a problem.

00:20:09: Yes indeed Depending on the level That's the size of the problem right?

00:20:15: So yeah there The solution is really connecting the external shocks in to your internal planning making sure I think as well that Forecasts are dynamic.

00:20:25: they not static But they really are scenario-based, and then you can see the impact.

00:20:33: And

00:20:40: why has this forecasting suddenly become such a strategic capability for finance teams?

00:20:48: This is because of decision making.

00:20:59: We won't go into why now, but I think we all agree that.

00:21:03: But finance teams are really expected to support faster decision-making and not only in a more crazy world you know?

00:21:12: In a more dynamic environment And You cannot do this with backwards looking data.

00:21:22: Do need real time.

00:21:23: That's another question.

00:21:28: visibility or just full visibility across the organisation would really help.

00:21:37: Yeah, that's not the same as real-time payments.

00:21:39: But there is also we could do another whole podcast on this whether it's necessary to have real time payments.

00:21:45: but Real Time Visibility On Your Positions can be very helpful if you see a lot of fast shifts going around in The World and those who We Have This Have Had These Tariff Shocks Lately.

00:21:58: They're Not Over Yet I Dare To Say And We Have Geopolitical Uncertainties so It It's good to be forecasting quite accurately or dynamically, as you put it earlier on a child.

00:22:14: I think that is an important characteristic for modern finance team and Treasury department.

00:22:23: These things we mentioned have actually increased the value of getting the forecast right.

00:22:30: When everything is stable the small inaccuracies don't really, you know it doesn't lead to anything.

00:22:36: but if a forecasting gap turns into big liquidity issue then there's real money behind that and its cost.

00:22:44: That can create value.

00:22:47: we have already talked on.

00:22:49: so another question from your experience what are the biggest weaknesses in how companies approach forecasting today?

00:23:01: The top one for me is fragmented data.

00:23:04: So forecasts.

00:23:05: they pull in data from multiple systems across the business, maybe ERP or TMS.

00:23:12: The business units also have a different way of doing it and so this makes it difficult to get one single golden source-of truth you know?

00:23:22: Then you'll also have disconnect between Treasury & FPNA.

00:23:26: So Treasury is focused on cash liquidity and FPNA has more P&L budgets.

00:23:31: that two are not always linked And so then there's a gap between what the business is planning, but then what actually happens in terms of cash.

00:23:42: Another thing and I think actually you know under five years ten years we'll look back at this and laugh.

00:23:48: But actual manual processes.

00:23:51: that does a huge reliance still on Excel spreadsheets.

00:23:55: This makes forecasting very time-consuming it difficult to scale It also tricky update And especially if you're trying to be in a dynamic, fast-moving environment.

00:24:06: It just doesn't cut it.

00:24:08: so... ...it's not about the lack of effort or time but its integration and scalability of the forecast.

00:24:19: So I would like to summarise The main weaknesses are first of all fragmented data.

00:24:26: disconnect also two other departments or teams like FPNA and you also have manual processes still a lot in time.

00:24:38: You always hear that the Treasury Management System number one is still Microsoft Excel, I know it's kind of handy to have your own calculations this interconnection you mentioned, and it's not a straight-through processing.

00:24:58: And that is what we are also diving into in our courses at the university which I feel time to create value, think about more strategic points as you mentioned earlier.

00:25:29: Exactly!

00:25:29: You get the foundation right and then you can build on it?

00:25:32: Yeah so this was already like three points...you could try to enhance your finance function or trash department in the future.

00:25:42: within your study also went into the Future Finance Leader.

00:25:51: having a look into the future five to ten years, what would you mention as the skills which then define the next generation of Treasury and Finance leaders?

00:26:04: Yes.

00:26:05: So I had a bit fun reading looking at graphs and interpreting the data And i came to conclusion that if your building your perfect humanoid You want combine traditional finance experience of course yes but with also data skills, data analytics technology savvy know-how and a much more enterprise wide strategic view.

00:26:34: So I mean pick out a few examples from the reports.

00:26:38: we saw that data science and analytics will become core.

00:26:42: That's what the report tells us.

00:26:44: so finance leaders they They won't just have to understand numbers, but they'll.

00:26:48: I've had to understand how to interpret data.

00:26:51: How to build scenarios?

00:26:52: How to generate these forward-looking insights.

00:26:57: and To do that there going to need technology technological understanding or savviness.

00:27:03: you know Not saying every.

00:27:07: everyone needs to go out and learn Python But they need to understand at a basic level.

00:27:12: How does the TMS work?

00:27:16: used to give the right insights.

00:27:19: What does real-time data mean for me, from my organization?

00:27:24: Where can I use APIs to be more

00:27:26: efficient?".

00:27:29: Yeah and an interesting part actually in their reports is that there's all this focus on finance transformation but collaboration with IT departments it still very low.

00:27:42: so you know if these gap needs business partnering more across the organization and using each other's skills to build something bigger.

00:27:56: The IT department should be one of your best friends if you're working in Trashy, because today it's really so much a technical function with using TrashY management systems or especially OneTMS which we know by heart.

00:28:16: You also mentioned Python coding.

00:28:19: Today there is an interesting development that Vipe coding.

00:28:28: maybe you already heard of this term that you have no idea Of the language itself, but you are able to code with the help of kind of AI tools.

00:28:38: Maybe I don't know whether you also have an a view on all the whole AI angle in these.

00:28:45: Yeah when we dive into the future and then next generation

00:28:50: Yes.

00:28:50: I think there's a lot that AI can be useful.

00:28:52: There's you know their classic use cases.

00:28:56: forecasting is a big one.

00:28:59: I read something very interesting recently that if you think about what AI does, it can automate boring tasks.

00:29:08: but humans they need a certain level of engagement... They need a number of tasks on their plate to have the right level of concentration.

00:29:23: and i give an example air traffic controllers quiet, they will actually combine different air spaces to get them

00:29:35: the right level of input which you need to sort out in order not to fall asleep.

00:29:39: Exactly!

00:29:40: To put it like this a bit bluntly okay.

00:29:43: so

00:29:43: we need be very careful with AI needs to do doing the right things.

00:29:47: We also consider that people like to finish tasks and This can give motivation.

00:29:53: then You know Do The Next Thing.

00:29:54: It Can Be A Bit Of downtime to do your expenses, for example.

00:29:59: I'm not suggesting everyone...

00:30:01: I don't like that all the time but yeah you're right.

00:30:07: so sometimes also enjoy doing tasks which i feel are not hard and give me some kind of relaxation by doing something which is not using too much cognitive power can be depleted the right level.

00:30:27: And now if we're going back to our future question, how should CFOs and Treasury leaders start to prepare their teams for this shift?

00:30:36: So what can they do?

00:30:38: I mean The whole CF organization or also even though you are kind of a group treasurer have a team Of two three four five Treasury experts?

00:30:49: What Can You Do To Prepare For The Shift?

00:30:53: I think there's three key areas to focus on.

00:30:56: The first one is digital and analytics, so the teams need to be comfortable with working with data as we said earlier using forecasts interpreting insights not just churning out the same old report but understanding how it's built and can used.

00:31:17: this second is closer collaboration across finance functions.

00:31:23: The report shows actually one of the biggest gaps between, is between Treasury and FPNA.

00:31:29: So you can get a much clearer view of liquidity or improve your processes with collaboration with the right department.

00:31:37: And on the collaboration we were speaking about in collaboration at IT earlier I think it might be good idea to explore having IT Treasury person, so a dedicated IT person just for treasury because it is different to the rest of the business.

00:31:55: I've heard off this example that also Treasury teams in Switzerland which were Okay not not the smallest teams but they looked for or higher dedicated SAP specialists which then could make the connects to SAP in order to get data right and also take out the right data points, which are relevant from a treasury perspective.

00:32:21: And therefore this collaboration I think it's really important.

00:32:25: yes absolutely

00:32:27: But we are two treasury people sitting here saying, Treasury is important.

00:32:31: We know that this connects to ITs.

00:32:35: for the future really key... ...to success.

00:32:42: So one of my last questions or even my last question would be if you had to highlight one insight from The Report That finance leaders should reflect on.

00:32:55: what

00:32:56: Would

00:32:56: This Be?

00:32:58: Yes, well I invite everyone to read the report and confirm that i've picked out The right thing but.

00:33:05: I would Emphasize That treasury at the moment is in the middle of a transition.

00:33:11: we're moving from operational support To really strategic partnerships And I think A lot Of organizations haven't started That shift yet.

00:33:21: so it's very important to realize that Treasury has the data They have visibility on liquidity, things that are essential but not always integrated into the strategic decision making.

00:33:35: And this is an opportunity for Treasury.

00:33:38: it's actually a very exciting time to be in Treasury and what makes even more relevant Is that its easier than ever been.

00:33:47: Treasury has had these data But now barriers coming down.

00:33:52: Yeah, Treasury is optimally placed to use their insights To help decision-making and to drive strategy.

00:34:00: Mm-hmm

00:34:02: yeah I also would fully agree that this is a very important point too.

00:34:08: have this transition towards strategic Partnership strategic partner of the management of the CFO.

00:34:14: as a treasury department.

00:34:17: It's moving more and more away from day-to-day operation, I know they are very important.

00:34:23: They need to work but you would agree that this needs to be kind of automated And then the shift can also set free some resources.

00:34:35: You already have to do more strategic thinking, strategic work enabling better decisions

00:34:41: in the end.

00:34:42: Absolutely

00:34:44: Yes, so I think it's a nice final word to conclude with you Sophie and thank You very much for sharing your insights With us today.

00:34:55: It was a real pleasure having you on the show And as mentioned Earlier on the link to the detailed report will be provided in the show notes and Therefore thanks again for being here.

00:35:09: Thank you very much for having me, Thomas.

00:35:11: And thanks to all of you for listening to this episode of EFZ Talking Finance.

00:35:16: If you enjoyed the discussion feel free To subscribe our podcast and share it also with your network.

00:35:23: We look forward to welcome you back For next episode.

00:35:26: until then Take care Stay ahead in finance and treasury.