Light breakfast and registration
Welcome Day 1
The power of little ideas
We tend to imagine innovation as slow, incremental change or else industry-shifting disruption. Yet for most companies, neither works. In The Power of Little Ideas, MIT Sloan professor David Robertson outlines a third way of innovation, actual working strategies for world-class companies. Building on his groundbreaking study of Lego’s rise from near-bankruptcy, Robertson shows us the organizational practices that lead to sustained innovation.
David Robertson, Author, The Power of Little Ideas and Brick by Brick, Senior Lecturer, MIT Sloan
David Robertson, Author, The Power of Little Ideas and Brick by Brick, Senior Lecturer, MIT SloanMay 23rd 2023
David Robertson has devoted his life to innovation, having studied, taught, and practiced the art of organizational change throughout his career. In his book The Power of Little Ideas, Robertson argues for a ‘third way’ of innovation: something between slow, incremental change and radical disruption. Instead, he champions a low-risk, high-reward strategy that calls for complementary innovations around a core product or service.Robertson is a Senior Lecturer at MIT Sloan School of Management, where he teaches Product Development and Digital Product Management. Previously, he was a Professor of Practice at the Wharton School, where he hosted the podcast Innovation Navigation, in addition to teaching. He was previously a LEGO Professor of Innovation and Technology Management at Switzerland’s Institute for Management Development (IMD), which received the #1 worldwide ranking by The Financial Times for its executive education programs. Robertson currently serves as a consultant to companies on innovation and technology management issues. He holds a PhD from the MIT Sloan School.
09:10am -9:50amThe power of little ideas
Shaping the future finance function
Marketplace models, ecosystem thinking, Web3.0, DeFi – it’s a boom time for buzzwords around new models for business and technology. But which of these, if any, describes a genuinely new way of doing business that requires fundamental changes to finance and treasury functions? One answer is that both marketplace models and DeFi explicitly embed financial functionality at the heart of the model. Marketplaces need to provide billing, payments, wallets, instant refunds, insurance and credit in multiple currencies 24/7/365. One element of the Web3.0/blockchain/DeFi nexus is the idea that financial assets, in the form of tokens are built into the inner workings of almost anything people do online. If these models become prevalent, the implications for treasury are huge. They blur the line between business and finance and should make corporate treasury a key stakeholder in dominant new ways to do business. These companies explain the new models they are embracing and how treasurers must get in front of the business now.
The art of successful change management
It’s easy to tell people to embrace change and not to fear it. But since (according to Gartner) 50% of all organizational change initiatives are deemed to be “clear failures.”, it’s not only employees who should worry. Management and other stakeholders should too. Today the emphasis in change management is technology and systems. This focus, without commensurate attention on the people left to operate the new processes, is likely to continue that record of failure. It also raises the risk that resource constraints will derail change programmes, especially as the economic outlook deteriorates. Technology budgets are often first to be cut even when that investment is vital for longer-term prosperity. And lack of resourcing is one of the key causes of failed change initiatives. This expert speaker outlines the journey and will use real-life case studies to show what makes and what breaks both adaptive and transformational change programmes.
Time to rethink….everything?
As we discover how Russian oil, gas, grain and fertilisers, timber and pulp are the foundations globally for a huge range of industrial sectors, and as we see the effects of sanctions amplified through the financial system, global tax reform and ESG regulations take a back seat. Geopolitical turmoil is here to stay and companies need to re-engineer supply chains, manufacturing hubs and treasury too. Banks are starting to look ahead and plan for the effects of sanctions on China, the possible fallout from aggression towards Taiwan and other potential areas where conflict will force them to offboard clients or withdraw entirely. Non-financial companies need to engage in the same kind of forward scanning. What should you do now to build resilience to the current environment? How should you plan for other worse case scenarios? How are you modelling your China risk, or the risk that key banking partners will pull out of countries in which you do business or even offboard you? How does treasury need to respond to possibly seismic changes to business models? This panel of three corporates describe their approaches.
Re-engineering risk management
The challenge is clear: a series of exogenous shocks have upended the global economy; assumptions on rates, inflation, energy and business models look obsolete; and the longer-term trends embed ever more uncertainty – whether the effects of climate change, the consequences of political upheaval or the ramifications of digital currencies and tokenisation, the metaverse and Web3.0. In the short term, treasurers must respond to protect businesses from risk and provide a foundation for growth. So, what are the key priorities and what are the potential pitfalls? Taking decisive action early looks necessary but should risk management today focus only on the immediate future or is there a more strategic approach to be adopted?
A crunch 12 months for the region?
Major central banks in the region have been increasing interest rates for more than a year, but above target inflation may lengthen the cycle of tightening. So predicting when rates may start to ease is difficult. Given the influence of the US economy, understanding the path of US growth and forecasting Federal Reserve actions are still key. Global growth drives the region’s export markets, and here again there is uncertainty around key economies in Europe as well as the US and China. Politics in the region will continue to drive economic instability: governments tend to swing violently from left to right during election cycles with each new regime undoing what came before it, including sensible policies and reforms. This is leading to the election of more extreme, “outsider” candidates. So is there is any likelihood of sustainable long-term economic growth? We hear from  for their answer to this perennial question.
Coping with the end of easy money
After a decade of exceptionally low interest rates, most companies have evolved capital structures, borrowing programmes and business models that depend on high levels of cheap-to-service debt. The monetary response to COVID prolonged the cycle to such an extent that despite the pandemic, in late 2021, US corporate bankruptcies had fallen to historic lows. Companies avoided the need to restructure and could stay afloat by borrowing more. Rising inflation and tightening monetary policy will make that strategy more difficult as input costs rise and debt service bills spike. ESG-related capex and a need for higher inventory levels may also put pressure on working capital and credit facilities. Treasurers need to maintain access to bank and capital markets funding. They need to keep ratings agencies onside. And they need to suggest a range of balance sheet options mapped to different economic and business scenarios.
Cash confidence in uncertain times
American companies are still sitting on near record piles of cash according to a June 2022 analysis of Fed statistics. About half that amount is held as cash and checkable deposits – an all-time high in terms of percentage of US corporate cash. Despite in-depth research that has shown that the key driver for these cash piles is tax, the shift to the most liquid forms of cash suggest other factors are at play. Treasurers are understandably wary of economic volatility, interest rates, inflation and access to capital markets especially given the unpredictable risks that will surface as quantitative tightening replaces a decade of ultra-easy money. So, what worries treasurers most? Have the old problems of cash visibility and forecasting been replaced by more fundamental concerns around counterparty risk and access to working capital? And can new technologies help with advanced scenario modelling and liquidity management? This discussion will touch on all aspects of cash strategies.
When traditional treasury is not enough
Treasurers at high-growth companies often struggle to cope with the increases in transaction volumes, currencies, and new locations that come with business success. This company’s cash grew from $88 million to $2.2 billion within four years, prompting a search for solutions that would not only automate and replace existing manual processes but also provide powerful analytics tools that enabled data-backed decisions. Implementing a traditional TMS would have been time-consuming and would have required a lot of support from internal IT resources, potentially delaying the journey. Thinking outside of the box, this treasury team chose disruptive technologies based on APIs and machine learning. So how did they come to this decision? How did they get internal support to take the non-traditional route? And how does their solution outperform those traditional systems?
Cash and risk management in Brazil: it’s getting easier
The regulations around hard currency flows, especially cross-border, are complicated, are different depending on which sector companies are in, and change frequently. However, recent regulatory changes signal a more modern approach to foreign currency controls and so an easier time for treasurers. In particular, rules around parent-subsidiary payments, licensing and royalties are being modernised to reflect the way modern business works. The tax treatment of bond purchases by foreign investors has also made local capital markets funding more attractive. The central bank’s commitment to modernisation is exemplified by its creation of the instant payments system PIX and the 2022 Open Finance project. So how are these initiatives feeding through to treasurers?
Avoiding rash decisions, sticking with an FX hedging strategy
When rates or volatilities spike, or when a new trend seems to be emerging, treasurers must weight their response: continue with the existing hedge programme, pull it or reset it? Pay up to lock in certainty, or wait for conditions to normalise? Few companies have formal procedures for evaluating the pros and cons of these choices at times of turmoil, leaving them open to decisions based on ‘regret aversion’ or on arbitrary benchmark hedge rates set when markets were very different. So, should treasurers stick with their systematic approaches or respond? What underlying business drivers inform these decisions? And if current conditions persist, will firms have to change the way they think about risk management and evaluate other more strategic options?
Catching up with the rest of the world
Traditional issues in Latin American treasury have been the slow development of digital and automated solution, the prevalence of cash as a means of payment, legal complications around core treasury risk and liquidity management techniques, tax and, in some countries, trapped cash. On all these fronts there has been a great deal of progress. Central banks are embracing open banking initiatives and developing instant payment systems. Technology providers and local banks are rapidly building infrastructure similar to that which is now taken for granted elsewhere. And overall digitalization is accelerating – especially the use of cards, wallets and cross-border e-transactions. This panel of regional treasury veterans spare their perspectives on progress as well
Pamela Potrie Altieri
Latam finance sr director, PedidosYa / Delivery Hero
Pamela Potrie Altieri
Latam finance sr director, PedidosYa / Delivery HeroMay 23rd 2023
04:40pm -5:20pmCatching up with the rest of the world
Pamela is a Sr. Director in PedidosYa Latam finance team. She’s been at the company for almost 4 years, starting as Regional Treasurer and for the last two years leading a broader scope which includes Treasury, Tax Accounting. PedidosYa is the Latinamerican brand of Delivery Hero; the leading global quick commerce company. She’s Uruguayan and has held global, regional and local roles in companies like Citibank (Uruguay and NYC), Samsung Electronics (Sao Paulo) and Grupo Biotoscana (Latam specialty pharma company headquartered in Uruguay).
She’s highly committed with furthering the diversity and inclusion agenda that end, and is President and co-founder of PedidosYa´s ERG group for D&I (#HacktheGap)
Returns return on excess cash
For companies with liquidity to manage, rising rates are an opportunity. But the pandemic exposed significant shortcomings in treasury processes around cash, with analogue cash collection, Excel forecasting sheets, the manual use of multiple investment portals and TMS shortcomings all combining to highlight the need for more automation. In today’s environment, treasury needs the latest technology for an instant picture of cash allocations, collateral positions and counterparty exposures to boost returns but also to minimise risks. So what are best practice treasurers doing both in terms of investment management strategy and the technology used to maximise returns and monitor risks?
Optimize your balance sheet with ESG-linked financing
When this company looked at a large-scale refinancing of its outstanding bonds, it had a number of objectives. First, it needed to guarantee market access, and outstanding litigation risks complicated that access. Second, it needed to be able to raise around $4 billion cost effectively enough to make a tender offer for those outstanding bonds viable. And third, it needed to be sure that demand in the high-yield market would hold up despite record issuance in the preceding 11 months. The answer to this puzzle was the largest-ever offering of Sustainability-Linked Bonds (SLBs), which was also the first of its kind in the sector that is tied to both climate and access to medicine targets. Demand for the bonds was so strong that the multi-tranche Euro and US Dollar issue was upsized and sold at a yield below initial price talk. Following its successful SLBs offering, and the tailwind it gave to the company’s ESG journey – the company has adopted a more holistic and expansive approach towards linking its financial instruments to ESG targets, subsequently also linking its revolving credit facility (RCF) to annual ESG targets, with the aim to link additional instruments in the near future. In this session, the treasurer explains how the company came to identify the ESG-linked bond market as the key to the success of the refinancing, how it decided on the ESG goals embedded in the bonds and RCF and how they sold the story to investors.
Light breakfast and registration
Welcome Day 2
Throwing away the playbook
History is merely a list of surprises. Put another way, planning will only get you so far. While economists and treasurers ran scenarios based on minor divergences from the present, reality delivered the digital revolution, a pandemic, war, an energy crisis, the reversal of three decades of geopolitical norms and the upending of the economic assumptions built on them. So, while it is easy to say ‘expected the unexpected’, it’s much harder to do it. Which elements of the unlikely do you prioritize? How many? And since they are unlikely, how much time and money should you spend understanding their likely impact? In times like these, perhaps the idea of evaluating scenarios is itself pointless. Instead, should companies start with resilience and look at much broader parameters to understand their exposures and weaknesses? And what about growth? Most economic and treasury analysis of uncertainty focuses on risks on the downside. But ideally treasurers should be able to use information about strengths and weaknesses to come up with ideas on the upside too. In this session, our economist looks at how the current economic situation may play out and gives their advice on ways to deal more broadly with uncertainty.
You think you’ve got treasury tough?
Most companies avoid doing business in countries in the throes of war or famine. Treasurers may occasionally struggle with cash trapped by regulations or political upheaval, but it is their exception not their norm. For NGOs tasked with preventing humanitarian crises the opposite is true. Most often they are trying to get money to the neediest in the direst of circumstances, pay their staff on the ground and buy essentials to maintain operations. Electronic options are limited, local banking partners complicated, and regulatory hurdles high. Take the UK based INGO, Save the Children International (SCI), which provides education, health care, economic and emergency relief to children and families in 118 countries around the world. As a result of conflict, climate change and covid, SCI responded to 78 emergencies in 2021 helping over 17 million children. In this session, the treasurer shares how they have had to mitigate banking system failures, regulatory barriers and economic sanctions to help continue its humanitarian support in some of the most challenging locations in the world. There are critical lessons for traditional treasury too.
The Net Zero Treasury: how do you measure up
Quantifying ESG claims and achievements is now not simply a matter of marketing or reputation management, it is the subject of intense regulatory focus. ESG-linked financial products have been called out partly because the data supplied by corporates that underpins ESG-linked loans, bonds and indices, itself has been questioned. ESG-related claims are now being more heavily scrutinised from a standpoint of accurate disclosure and reporting and so investor and consumer protection. ESG-linked financial products mean that ESG data must now be as accurate as financial data itself. This increasingly makes it the responsibility of the finance function – and not marketing or investor relations – and bodies such as the ISSB and EFRAG are working hard to create new standards for accounting and audit functions. In this panel, our experts look at measurable achievements in the drive for sustainability and ask what finance teams can do to turn those achievements into data the market and regulators can accept.
Cash and risk management in Argentina: still tough for treasurers
Argentina is a problem for treasurers. Inflation is 80%. The gap between official and unofficial exchange rates is so high it’s hard to know the real price of anything and acquiring dollars at the (very favorable) official exchange rate is very difficult. Unorthodox, but legal, mechanisms (e.g. blue chip swaps) are used to move money into and out of the country. There have been some attempts at deregulation: in June 2022 the requirement to settle through the official foreign exchange market was removed from companies exporting certain services. And in 2022 the central bank started the ball rolling on open banking. But the country remains extremely difficult to operate in and a number of the solutions to the problem of effectively trapped pesos involve transactions that, while legal in Argentina, may fall foul of other legislation such as the US FCPA. In this session, treasurers describe how they minimise risks while preserving the value of their fund in the country.
The two sides of treasury digitalization
Treasurers must cope with a double dose of digitalization. First, their businesses are undergoing repeated waves of digital transformation, as legacy infrastructure is upgraded, new e-commerce channels are opened and, sometime, entirely new digital businesses or business models are created. These need treasury input to ensure that the right payment channels and options are embedded in these new services and that critical data is fed into core treasury systems. But treasury itself is also digitalizing. Operationally, treasury is making increasing use of new technologies such as APIs, robotic process automation (RPA) and machine learning (ML)/artificial intelligence (AI) as it addresses its perennial challenges across cash and risk. So how are treasurers prioritizing? Where are companies prepared to add resources? And is anyone measuring the benefits?
The case for digitization of debt capital markets
In August 2018, the World Bank issued bond-I, the world’s first bond to be created, allocated, transferred, and managed through its life cycle using distributed ledger technology (DLT). In the years, since, other issuers have joined the fray. Continued improvements in technology and the exploration by central banks of digital currencies (CBDC) hold the potential to transform payments and debt capital markets. Furthermore, these changes can serve as a template for emerging markets to leapfrog developments in capital markets infrastructure and broaden access to finance for the masses. So why is it taking so long to move from POC to BAU? What opportunities and risks do they introduce for users of capital markets and payment rails? And what do treasurers and other financial professionals need to know about them to use them?
Practical innovation versus tech hype
There is ‘innovation’ and there are useful, practical solutions for treasurers today. Few treasuries want to be at the bleeding edge of technology adoption; most simply want the elimination of error-prone, manual processes, better third-party connectivity and joined-up systems that deliver speed, visibility and accuracy. Fintechs offer many platform and point solutions for typical treasury pain points. Robotic process automation is a proven technology being used by treasurers now to do just that. Suggested blockchain use cases in treasury and finance range from credit tokenisation and securitisation to trade finance and SCF, and there are working solutions in a number of these areas. For treasurers who want better insight and analytics the technology of choice is AI, and here there are many more real-world solutions. But in all case, the devil is in the detail. So, in this panel, three treasurers take us through their experiences with new technology and give us the lessons they have learnt about that detail.
Understanding the new dynamics of global treasury operations function (Corporate Panel)
Treasurers have spent much of their time over the last decade tweaking existing systems and processes. In a largely stable environment, their focus has been on incremental gains in efficiency and risk mitigation.. But incremental evolution is no longer the best approach in a world of rapid, extreme and sometimes chaotic change. This requires new approaches not just to treasury staples like forecasting, liquidity and risk management but also to the fundamental structure and management of the treasury function. So, if tweaking is not enough, what should treasurers really be thinking about? As industries and business models get upended, this session will look at three companies in a period of great transformation and why treasury needs to understand and respond to the underlying company’s business vision. What might treasury look like in the future and how are banks and tech partners supporting this change? These treasurers have a plan (or already started in that journey) and supporting vision for changes to talent, required skillset, changes to the structure of treasury operations and changes to both treasury and enterprise technology and data governance. They know that to be an effective and strategic treasurer requires in-depth understanding of the business, address implications of business changes on liquidity and risk management, and continuously evolve treasury operations talent, tools and structure to respond to these changes. In this session hear from treasurers as they describe their visions for their own operations and the drivers of those transformations
NEW FORMAT: Cocktail and conversations at our Open Spaces: Back to basics for working capital management
The disruption to core supply chains caused first by COVID and now by conflict forces treasury to focus on resilience, not clever financial engineering. At a basic level, higher inventories need to be financed; firms need to work with fewer suppliers with whom they have better relationships but this may lead to higher prices; and treasurers suddenly find themselves needing to know in much more detail about things like materials management and where cash is really tied up in the supply chain. So where should treasury focus first? What happens when historical data is useless as a guide to today or tomorrow? And are their technologies that can help? This special Open Spaces format is chance for cocktails and conversation on the floor moderated by working capital experts and leading corporate examples.
NEW FORMAT! Cocktails and conversation in our OPEN SPACES on the treasury technology ecosystem.
The treasury technology ecosystem is getting larger and more complicated. Some want to solve traditional treasury roadblocks. Others want to drive a more fundamental treasury transformation. But almost every solution promises increased efficiency, effectiveness and connectivity. So how can treasurers work out which to trial? What types of supplier are best to work with? And how do you make those relationships work best for both sides? This open space discussion will be led by three corporates and a moderator looking at how companies are adopting the new core technologies in blockchain, AI, robotics and specific fintech solutions. The highly interactive session will allow benchmarking for companies.
OPEN SPACES with Latam experts and speakers.
Light breakfast and registration
Day 3 welcome
Riding the Bitcoin rollercoaster
Three of the biggest corporate holders of Bitcoin are Block (formerly Square), Tesla and Microstrategy. All bought heavily as BTC ran up to its peak of around $60,000, and all have since taken heavy losses on the position. Data intelligence company, Microstrategy, has by far the largest position of any public company and is the third-largest listed stock with a bitcoin balance sheet. The company even took on debt to buy BTC and its fall prompted worries of a margin call/ The firm is down around 36% (or $1.4 billion) on its BTC holdings. Its stock is down from a peak of around $810 to $261, a larger fall than either that of the Nasdaq or BTC itself. The rationale for using BTC rather than a fiat currency as a core balance sheet currency was – and still is for the believers – that the latter have been fatally devalued by QE and measures taken to counter the economic shocks of COVID and the war in Ukraine. Even with rising rates inflation is destroying the real value of those fiat currencies and, if you believe that central banks have lost control of inflation, an alternative is potentially sensible. But have central banks lost control of inflation? And is BTC a better store of value than the dollar? US regulators are leaning to the view that BTC is a commodity, so why not choose oil or gold? Well, Microstrategy are here to tell us what they think.
Can anyone explain Web 3.0?
For believers, web 3.0 is the future of the internet – the combination of blockchain and tokenization (including cryptocurrencies) with decentralized applications that run on platforms (like Ethereum) without interference from centralized intermediaries. Interactions in this new world occur directly between participants, mediated by smart contracts (like DeFi protocols) typically run using open-source software. If that makes no sense, you’re not alone. If you equate Web 3.0 and DeFi to cryptocurrency scams and the creation of unregulated financial entities whose lack of oversight and authentication exposes users and the system to large and unpredictable risks, again, you’re not alone. Is web 3.0 a transformational democratic reinvention of the internet, or just a way to make everything on the web about money? In this session our expert will try to explain why Web 3.0 matters to you and your business.
Taking your business seat in the metaverse
The metaverse land-grab is on: around $1.93bn worth of cryptocurrency has been spent buying virtual land in the past year alone, with banks, retailers, fashion houses, drinks companies and even staid consultants now present in one of the many different virtual worlds we’re calling the metaverse. But what has the use of augmented reality to sell customized T-shirts or show customers around a new car (Ferrari) got to do with treasury? The answer is that ultimately the metaverse will only exist if it can attract customers who want to buy things in it or through it. Like in-app purchases now they may do that with fiat currency using traditional payment channels; or they may prefer to use virtual currencies as many do inside video games today to buy skins, better avatars and other game enhancements. Just as in today’s marketplace models, making sure customers can shop as they want will dictate success. In this session learn what this metaverse pioneer thinks treasury should do next.
New worlds; new ways of living
As the world changes, many individuals and companies are looking for different ideas on how to live, both smarter and better. The Seasteading Institute promotes the creation of floating ocean cities as a revolutionary solution to some of the world’s most pressing problems: rising sea levels, overpopulation, poor governance and more. Learn what a new world might look like.