Nick Ashton (HSBC ): The Building Blocks to Treasury Transformation

The dynamic payments landscape, evolving business models and regulatory changes are rapidly driving the need for Treasury Transformation. In essence, the rise of real time payments and real time treasury, automated processes and the increased use of APIs are making payments faster, more transparent and secure.  At the same time the evolving business models are shifting to digital, direct to consumer and platform-based models. With new regulations like the Instant Payments regulation in Europe, the ISO 20022 migration, as well as the need to manage anti financial crime risks, require fit for purpose systems and solutions to operate in real time.

This means that treasury organizations need to move from traditional, manual and partially automated processes to more strategic, technology-driven functions requiring a transformation agenda, in which the target model and developments are defined transversely in the corporate organization.

To engage in a transformation agenda, it is recommended to have a structured approach that aligns with the business strategy and meets growth objectives. A clear and holistic Target Operating Model needs to be defined, addressing key focus areas, such as governance, people, processes, risk management and data analytics.

Each organization will have its own transformation journey linked to their business environment, maturity of their treasury function and culture of the organization. It will ultimately need to be scalable for the future and within the realms of a change management plan that is realistic in cost and timelines.

The Treasury Solutions Group (TSG) at HSBC accompanies its clients in their transformation agenda and although there is no right or wrong journey, has identified 3 generic paths that start with “transactional treasury”, evolving to “process efficient “and ultimately to “value adding treasury”.

To facilitate the deployment of these transformation agendas from a cash management angle, HSBC has invested in key treasury hubs, such as Luxembourg in Europe and Singapore in Asia, providing a large array of future proof solutions such as notional pooling and virtual accounts that can support fully integrated and centralized organizations that have or will set up a Regional or Global Treasury Centre.

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