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Real-time spells the end of the treasurer

I’ve had a couple of good debates in the last week or so about the value of real-time everything.

Everything is instant, immediate, no waiting, it’s real-time.

We expect instant gratification in everything we do and, any waiting, it’s click and delete.

Case in point: the PC gets stuck. How long do you wait before you reboot? A minute? Ten minutes? An hour?

You don’t expect to wait and we now expect real-time instant gratification in all dealings in our personal lives.

I wouldn’t expect to make a mobile phone call to my mate in Hong Kong in d+5 so why should I wait that long for a payment?

I don’t.

So why should I hang around waiting for a payment to process?

I shouldn’t.

And yet, there’s very little real-time in the payments world.

It still takes D+5 for direct debits under the latest legislation – the Payment Services Directive (PSD) – and that is ridiculous. That’s five working days, so you send a payment on a Friday and it may take till past a week on Monday to get there.


Particularly when so many other things in banking are getting real-time.

Faster payments in the UK delivers real-time payments, or near enough.

In the City, low latency high frequency trading can move a transaction around the world faster than two quick blinks of the eye, or under 400 milliseconds to be exact.

In near real-time, PayPal allows me to send payments between individuals and small businesses not only domestically, but across most borders. That’s better than many banks who ask you to come down to the branch and fill in forms in triplicate for an electronic cross-border payment to be instructed.

And it all feels like real-time.

Meanwhile, some banks claim to be able to take a treasurer’s end of day position and switch the whole treasury cash pool to another centre half-way around the world, in the click of a button, in real-time.

The end-of-day for Global Widgets Inc approaches at 16:55 in Hong Kong and click, the whole thing switches to Brussels for at 8:55, ready for the opening of business.

All of this makes for an interesting new world as we need wait for nothing. It’s all in real-time.

But there’s a problem with all this.

The problem is that if you can switch and manage and track and see the global cash and financial operations of a multinational business in real-time from any desk with access, then why do you need a treasurer?

A treasurer is there to net and pool and settle and report the financial position of the company. They are not there to issue and track purchase orders and invoices, although they might get involved in that. No, all that stuff is for the administrators and financial controllers. The treasurer is there to deal with the complex analysis of cash positions and outstanding trades, clearing and settlement.

But if we move to real-time cash reporting, real-time netting and pooling and real-time settlement at trade execution, then what is the treasurer to do?

Oh dear, not a lot.

A bit of information analysis, a bit of supply chain improvement, a bit of profit maximisation.

Shoot, that’s all the stuff the treasurer is supposed to be doing anyway isn’t it?

Only with a tenth of the staff they have today.

And this is the rub.

I remember talking to COOs about Corporate Actions automation about five years ago, and most resisted the idea of automating the process as they would lose many of their empire as the staff who administered such areas reported to the COO.

In other words, the very person who has to make the decision for the new system is that same person who has to layoff all their staff and close down the old system.

No wonder (some) treasury heads don’t like the idea of real-time treasury workstations or information services for the business.

About Chris M Skinner

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here…

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