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The annual bonanza that is the AFP Conference has just wrapped up. More than 6,000 finance professionals headed up to beautiful Denver for three days of meetings, education sessions and possibly the occasional light refreshment. If you weren’t able to make it the conference, what did you miss?
This year’s event started off on an entertaining note, with the 43rd President of the United States showing off his comedic skills early and often. Interspersed between laughs, however, was some great advice on how to build trust: keep your promises - do what you said you would do. That was an interesting message and actually relates well to three driving themes that I observed at the conference:
1. Cash forecasting
2. Fraud and cybercrime
3. Technology replacement
Cash forecasting
Cash forecasting has always been important to treasury, in order to enable better deployment of cash, reduce borrowing expenses, and improve the effectiveness of hedging programs. Yet the key to forecasting is “doing what you said you would” which is enabled through forecast accuracy. A cash forecasting program is a complete waste of time – unless the forecast variances are measured at multiple points in time to identify at a detailed level which projections proved not to be correct. The goal of this variance analysis is to improve the forecast so that it can be relied upon to make key decisions for the organization. Executives need to know they can trust what treasury tells them is going to be forecast.
While many have that confidence in their process, everyone that visited at our booth felt there was an opportunity for improvement. Treasury wants to be a trusted advisor.
Fraud and cybercrime
Fraud and cybercrime were heavily discussed at this conference, just as it has been (unfortunately) for the past 12+ months. There are too many examples where data security and internal workflows failed treasury, leading to significant financial loss. We’ve all heard the stories, those written in media publications and those whispered at lunch time meetings.
The difficulty for treasury is that they have to trust their partners; treasury is not equipped with the skills, resources, or technical knowledge to ensure the right safeguards are implemented. Those safeguards typically fall into three categories:
1. Application security – protecting access to treasury teams
2. Data security – protecting treasury information from unauthorized access
3. Treasury workflows – protection of payment workflows and bank accounts are obvious examples
While treasury technology can provide secure solutions for each area, partnering with the CTO’s team is critical to ensure that the security and hosting infrastructure offered by your treasury system vendor meets your organization’s information security policies. They have the expertise to know if your vendor can actually do what they say they will do.
Technology replacement
One of the more interesting observations I noted was the high proportion of practitioners visiting our booth looking to replace existing treasury technology. In some cases it was obsolescence (e.g. moving to the cloud) but in many cases it was dissatisfaction with their current system provider who lost their trust, failing to do what they said they would. Fortunately, the flexibility of subscription models and standardized, lower cost implementations reduce technology switching costs. The old days of “being stuck” with bad technology are over.
See you next year in Orlando!