• CASH MANAGEMENT

    One-way ticket

September 2020

The Covid-19 pandemic forced corporate treasury teams to suddenly adapt to working from home, but not all of them are planning a return journey to the office anytime soon, reports Rebecca Brace

Covid-19 has tested business continuity plans around the world, with workforces abruptly leaving their offices to work from home until national guidance indicated some form of return would be possible.

For many individuals, the benefits of not travelling to work are considerable, such as escaping the daily commute and achieving a better work-life balance. But it also brings significant challenges, particularly when limited space is shared with partners who are also working remotely, when children need homeschooling and university students are doing their exams at home, as they are all competing for precious bandwidth.

As Deloitte spelt out in its March 2020 report, Remote Collaboration: Facing the Challenges of Covid-19, “Working remotely under these circumstances means adapting to a new environment, battling a new set of distractions as well as experiencing an unprecedented fusion of work and private life. In order to continue working efficiently and creating value under these new circumstances, organisations need to understand, accept and support their employees’ specific situations and needs.”1

For corporate treasurers, whose day-today work involves analysis and oversight of risk management, liquidity/credit line management, corporate banking, and financial reports – to name just a few core functions that work well from an officebased digital boardroom – working from home brings additional hurdles. These range from ensuring that the required security controls remain effective to carrying out planned technology implementations without face-to-face workshops.

Starting a new role during a pandemic

As the UK entered lockdown on 23 March 2020, Daniel Jefferies was only days into his new role as Group Treasurer at Mundipharma, a global network of pharmaceutical companies across more than 120 countries. “Effectively starting a new job in lockdown is certainly a challenge – you haven’t yet had a chance to build up a network of contacts within the organisation,” he says. Like many others, Jefferies has also had to overcome various logistical challenges, from purchasing office equipment at a time of soaring demand to balancing the conflicting needs of work and the home education of his children while schools were closed.

Jefferies’ remit is to establish a treasury function for the Mundipharma network, a role which ordinarily would have included business travel. In addition, numerous faceto-face meetings with banks were replaced with phone calls. But, as other homeworkers have found, the inability to meet colleagues at the office has kick-started routines of regular team calls and more interaction with “people that you wouldn’t normally interact with as frequently”.

In the weeks post-lockdown, a bank request for notarised pieces of documentation during the account opening process suddenly became more difficult to fulfil. “Finding a notary who was willing to do it locally was challenging, and sending the documentation to the bank took longer than expected,” Jefferies says. “So what normally would have taken two or three working days actually took two or three weeks, which was quite frustrating.” Nevertheless, he adds that banks have been very willing to work with him on solving such tests of logistical agility.

Overnight transition

As most employees found – with corporate treasurers no exception – the switch to homeworking happened virtually overnight. With Greece entering full lockdown on 22 March, the treasury team at Athens-based food multinational Chipita had to adapt rapidly, explains Group Treasurer Marianna Polykrati. One person continued to travel to the office to pick up cheques, make payments and handle invoices, while the remainder of the team worked from home. While homeworking had been far from the norm for Chipita before Covid-19 struck, Polykrati says that the necessary measures were in place to continue treasury operations during lockdown, including remote access to servers, files and Bloomberg. From a cybersecurity risk perspective, new processes were adopted to double-check one-off payments or changes to payments.

For Martin Schlageter, Head of Treasury Operations at Swiss healthcare multinational Roche, the transition to working from home from mid-March was equally abrupt. “Until the end of Friday, everyone expected to be back in the office on Monday morning as usual,” recalls Schlageter, who is based in Basel. “Then over the weekend we were asked to individually consider working from home as of Monday. Since then, we have basically been running the show almost completely remotely.

Martin Schlageter, Head of Treasury Operations, RocheSince mid-March we have basically been running the show almost completely remotely
Martin Schlageter, Head of Treasury Operations, Roche

Roche’s treasury is well-known for being at the forefront of centralisation and the adoption of new technology; its work with SWIFT gpi being one example of this. In addition, the company was wellprepared for a remote working scenario and had previously undertaken pandemic preparations. “Many years ago everyone was supplied with a laptop, so that they could work from home if needed,” Schlageter recalls. Consequently, treasury continued to operate as normal, and the team even successfully completed a full system upgrade remotely during the second quarter of 2020. Nevertheless, there have also been several obstacles to overcome. As lockdown continued, it became clear that some staff would need more equipment to work effectively, such as additional screens or printers, which the company has facilitated. Schlageter admits the need to provide physical signatures has been a further challenge: “We have team members living in Switzerland, Germany and France, and physically shipping documents across borders takes additional time,” he says. “I think this is something the financial industry will hopefully improve on after the crisis.”

An April 2020 McKinsey report, titled The Digital-led Recovery from Covid-19: Five Questions for CEOs,2  makes the point that the pandemic has accelerated the quest for digital solutions: “For many companies, the only option is to accelerate their digital transformation. That means moving from active experimentation to active scale-up supported by ongoing testing and continuous improvement.”

A catalyst for change

The pandemic has already proved to be a powerful catalyst for changes that might otherwise have taken longer to achieve. “We’ve been talking about it for the past few years – going digital, taking away manual payments, taking away the dependency of sitting in the office,” says Dennis De-Weerdt, Global Head of Service and Implementation, Cash Management for Deutsche Bank Corporate Bank. “However, sometimes change can be a slow process. With the arrival of the crisis, there was no choice anymore – and that boosted the willingness to adopt change for both treasurers and banks.” Greater readiness was something De-Weerdt’s team acted upon promptly. They devised a solution for digital signatures that enabled clients to be onboarded to Deutsche Bank’s products without the need for physical documents to go back and forth.3

A poll of more than 300 CFOs and finance leaders, conducted at the end of March by US research and advisory group Gartner, suggested that nearly three in four plan to permanently move at least 5% of their team to remote working once conditions return to normal,4 as illustrated in Figure 1.

Figure 1: 74% of companies plan to permanently shift team members to more remote working after the pandemic

Source Gartner (April 2020)

In July 2020, a Deutsche Bank Data Innovation Group (dbDIG) survey covering nearly 500 market professionals around the world found that enthusiasm for working from home among respondents, which was high in the early weeks of the pandemic, might be starting to flag, with 65% admitting they missed the office either a little or a lot, compared to 59% when a similar poll was conducted in June.

Alongside this there is, in general, a greater confidence about getting back to the workplace. “Compared to a month ago, there have been slight uplifts in willingness to return to work, send children to school, and use public transport,” said Deutsche Bank analysts in the Back to Work Monitor issue of 6 July 2020, which was also based on dbDIG data. “The pattern is uneven, with Germany, the UK and the US showing small/zero gains. While the majority of continental Europeans are content to go back to their respective workplaces, the US continues to demonstrate greater hesitancy.”

Many European countries began to loosen restrictions once the first wave of virus cases peaked in the spring – but will some treasury professionals continue to favour homeworking arrangements in the longer term? Schlageter says that since Switzerland’s lockdown lifted, some members of Roche’s treasury team have opted to return to the office, but many are continuing to work from home. For other treasurers, working from home is already a thing of the past: Polykrati reports that since Greece started lifting its lockdown in early May, Chipita’s entire team has returned to the office – and she doesn’t expect working from home to become the ‘new normal’.

“Banks and large auditing companies are still working remotely a lot, but for production companies like Chipita it’s not that easy,” she explains. “You really want to be able to have face-to-face discussions, as our company has production facilities, research and development for new products, marketing and promotions.” Nevertheless, the prospect of a second wave of the virus has sparked several changes – for example, the company’s treasury team may adopt a treasury management system so that more can be done electronically.

Treasurers may also face various practical hurdles where remote working is concerned in the long term. “Our workplace is in Switzerland, but we have colleagues living in Germany and France,” says Schlageter. “There are certain legal restrictions, whereby cross-border commuters shall not spend more than 24.99% of their time working from home.” He adds that while the rule was temporarily suspended during the crisis, “the question is whether this will be reinstated afterwards.”

Figure 2: How many times a week do market professionals think they will work from home in the future?

Source dbDIG Survey, Deutsche Bank Research

Future challenges

Looking ahead, one topic many are considering is the likely impact of future Covid-19 outbreaks – but with important lessons already learned, treasurers should be in a better position to handle any second wave. “Treasurers can have more confidence in cash forecasting in a second wave, as their assumptions would be stronger,” says Johnny Grimes, Managing Director, Global Head of Liquidity Product, Transactional FX at Deutsche Bank. “They will have a clearer idea of how the markets might react from a foreign exchange perspective, or whether there may be tighter controls or changes to funding windows when moving money in and out of a particular country.”

Additionally, Grimes says, the outbreak has accelerated the development and adoption of digital solutions, which can better support treasurers in working from home. “They have more experience of using these services in stress scenarios, so they can factor them into how they want to work going forward,” he adds. “I do think that will have an impact on treasury practices in the future.”

In the meantime, while there are still issues to be resolved, it seems likely that working from home will become standard practice for more treasury professionals – particularly once learning to live with Covid-19 becomes business as usual. “I think people will go back to offices, but what will change is the mix between how much time they spend in the office and how much time they spend working from home,” says Jefferies. “From an employer’s perspective, there will be a change of approach. This has been a massive test in terms of seeing if people can still get their work done with the expected dedication – and they can.”

Rebecca Brace is a freelance business and financial journalist and a former editor of Treasury Today


Sources

1 See https://bit.ly/2OknBep at deloitte.com
2 See https://bit.ly/32eIDDe at mckinsey.com
3 See Sign of the times at flow.db.com
4 See https://gtnr.it/3eq6ZfN at gartner.com

Rebecca Brace

freelance business and financial journalist and former editor of Treasury Today

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