Spring 2019 Spring Plus: AFP Risk Survey of the 2019 Results New CTPs New

APIs and Connectivity Applying Cost and Capital and Applying Cost Better Business and Sales Forecasting and Sales Business Better

Treasury and Finance Professionals Professionals and Finance Treasury Skills and Tools New Leverage LEARNING Enhanced

Association for Financial Professionals’ Quarterly Magazine Quarterly Financial Professionals’ for Association Exchange

Treasury and Finance AFP Exchange Spring 2019 We’ll focus on the day-to-day so you can focus on the days to come

Prioritizing your organization’s key strategic objectives can be challenging while managing its daily banking activities. That’s why trusted partners are critical. Rely on MUFG, one of the largest global ‡inancial groups, to support your organization’s treasury, trust, and trade ‡inance needs. Backed by a 360-year history and a commitment to innovation and long-term client relationships, we can help optimize your working capital and provide best-in-class asset servicing solutions. Let us focus on the details so you can focus on the vision. Your trust, your future, our commitment Learn more at mufgamericas.com/partner

MUFG Union Bank, N.A. A member of MUFG, a global ‡inancial group

©2019 Mitsubishi UFJ Financial Group, Inc. All rights reserved. The MUFG logo and name is a service mark of Mitsubishi UFJ Financial Group, Inc., and is used by MUFG Union Bank, N.A., with permission. Member FDIC. SPRING 2019 CONTENTS VOLUME 39 NUMBER 1

26 37 51 AFP Research Financial Planning & Analysis Blockchain Results of the 2019 AFP Improving data analysis skills New blockchain applications for We’ll focus on the day-to-day Risk Survey Dr. Bill Hu, FP&A, CTP corporate treasury AFP Research Department Dr. Sean Stein Smith so you can focus on the days to come 40 and Roberto Cruz, Jr., CTP 30 Financial Planning & Analysis Prioritizing your organization’s key strategic objectives can be challenging while managing AFP Aware Digital business partnering 54 its daily banking activities. That’s why trusted partners are critical. Rely on MUFG, one of the Giving back to Chicago Vivek Saxena Artificial Intelligence largest global ‡inancial groups, to support your organization’s treasury, trust, and trade ‡inance Andrew Deichler How AI can improve lease needs. Backed by a 360-year history and a commitment to innovation and long-term client accounting relationships, we can help optimize your working capital and provide best-in-class asset 44 Jeff Ellis and Ryan Drimalla 32 AFP 2018 Wrapup servicing solutions. Let us focus on the details so you can focus on the vision. AFP Pinnacle Treasury and finance pros Your trust, your future, our commitment Grand Prize Winner talking shop 58 Uber Technologies drives away Andrew Deichler December 2018B – Learn more at mufgamericas.com/partner with the award January 2019 Andrew Deichler 46 CTPs AFP Conversations 34 Reb Rebele on workplace collaboration 64 Forecasting Ira Apfel December 2018 – How BMC Software improved January 2019 sales forecasting 48 Certified Corporate FP&As Bryan Lapidus, FP&A Blockchain Blockchain’s impact on treasury MUFG Union Bank, N.A. A member of MUFG, a global ‡inancial group and finance Andy Fately

©2019 Mitsubishi UFJ Financial Group, Inc. All rights reserved. The MUFG logo and name is a service mark of Mitsubishi UFJ Financial Group, Inc., and is www.AFPonline.org AFP Exchange I 1 used by MUFG Union Bank, N.A., with permission. Member FDIC. COLUMNS SPRING 2019

4 From the President 14 Global Treasurer 22 Treasury Essentials & CEO Regional treasury center Best practices in treasury Jim Kaitz success factors connectivity Francois-Dominique Doll Andrew Deichler 7 Current Events and Susan Xu LIBOR replacements for 24 Payments Essentials cash products 17 FP&A Foresights APIs: the search for ubiquity John Hintze Applying cost of capital in and standards corporate finance Andrew Deichler 10 Current Events Bryan Lapidus, FP&A New IRS regs clarify 64 The Bottom Line tax reform 20 Risk Column But Seriously John Hintze Treasury must lead business Ira Apfel continuity planning Andrew Deichler

Take the AFP CE Recertification Quizzes After you’ve finished reading this issue, head over to the CE quiz page and take the latest Exchange quiz. CE credit quizzes allow CTP, CCM, and FP&A holders to test their knowledge on timely industry topics. They are accepted as credits for recertification. An online format allows for automatic pass/fail notification. Quizzes are valid for two years from the date the source material was originally published. You will have 90 days from the date of purchase to complete a quiz, although you should complete the quiz before the end of your reporting cycle. Purchase a quiz at www.AFPonline.org/CEquiz

2 I AFP Exchange Spring 2019 Raising deposits? Let us connect you to motivated investors.

When you choose Fidelity Capital Markets as one of your certifi cate of deposit (CD) underwriters, we’ll help you connect with an extensive retail investor platform, which allows customers to easily access and purchase your CDs directly on Fidelity.com’s award-winning platform.*

Call 800.343.2670 or visit capitalmarkets.fidelity.com/CDUnderwriting

*Investor’s Business Daily® Best Online Broker 2016, 2017, and 2018. Barron’s Best Online Broker 2016, 2017. StockBrokers.com Best Online Broker 2018. Kiplinger’s Best Online Broker 2016, 2017. The Fidelity Investments and pyramid design logo is a registered service mark of FMR LLC. Fidelity Capital Markets is a division of National Financial Services LLC, Member NYSE and SIPC. © 2019 FMR LLC. All rights reserved. 555140.27.0 www.AFPonline.org AFP Exchange I 3

37908_01_AD_FCM_CD_Exchange.indd 1 2/6/19 1:07 PM LETTER FROM THE PRESIDENT & CEO SAFETY. LIQUIDITY.

JIM KAITZ, PRESIDENT & CEO RETURN. A COLLABORATIVE PROCESS

Dear AFP Members,

orporate treasury and finance is your optimism and your concerns. You can fundamentally a balancing act. We have connect with them on Collaborate, AFP’s private Cto weigh the opportunity of deploying website exclusively for members. On Collaborate corporate cash against the increasing number of you can pose a question, or you can search on risks that could negatively impact our organization. virtually any treasury and finance topic and This reality was made crystal clear in two get advice from your peers; there are more than recent AFP surveys. Our January Corporate 18,000 conversations to choose from! Cash Indicators, which broadly measures Of course, we have our world-class events for treasury and finance professionals’ willingness in-person networking too. AFP 2019 is slated to deploy corporate cash, found in Q1 2019 for October in Boston while FinNext 2019 starts that practitioners were open to drawing down March 17 in Las Vegas. If you cannot attend these reserves for capex, buybacks and more. That’s a events there is plenty of thought leadership and sign of guarded optimism. peer insights at AFPonline.org. ® On the other hand, our 2019 AFP Risk Survey Treasury and finance professionals are Use ICS as a Cash identified three major risks that greatly concern not expected to have all the answers. In fact, treasury and finance professionals: strategic, navigating these risks and weighing them Management Tool cybersecurity and financial markets. They are against deploying cash is an ongoing process. With the Insured Cash Sweep® service, you don’t have to worried about disruption caused by competitors This journey is never over, but your peers at sacrifice safety for yield. You can earn a return, preserve and new technology; hackers stealing data; and AFP can guide you along the way with great daily liquidity, and access multi-million-dollar FDIC turbulent markets and rising rates roiling stock insight and advice. insurance coverage for large cash balances. prices and currencies. ICS is Now Available on FIS’ We want to be optimistic and help grow the Sincerely, SGN Short-Term Cash business, yet real-world concerns effect our Visit InsuredCashSweep.com/AFP to learn more. Management portal decision making. So what is a treasury and finance professional to do? Placement of funds through the ICS service is subject to the terms, conditions, and disclosures in the service agreements, including the Deposit Placement Agreement (“DPA”). Limits and customer eligibility criteria apply. In the ICS savings option, program withdrawals are limited to six per month. Although funds are placed at destination banks in It helps to understand that you are not alone. Jim Kaitz amounts that do not exceed the FDIC standard maximum deposit insurance amount (“SMDIA”), a depositor’s balances at the relationship institution that places the funds may exceed the SMDIA (e.g., before ICS settlement for a deposit or after ICS settlement for a withdrawal) or be ineligible for FDIC insurance (if the relationship institution is not a AFP has 16,000 members worldwide who share President and CEO bank). As stated in the DPA, the depositor is responsible for making any necessary arrangements to protect such balances consistent with applicable law. If the depositor is subject to restrictions on placement of its funds, the depositor is responsible for determining whether its use of ICS satisfies those restrictions. ICS and Insured Cash Sweep are registered service marks of Promontory Interfinancial Network, LLC.

FIS is a separate entity from, and is not an affiliate with Promontory Interfinancial Network, LLC. There is no form of legal partnership, agency affiliation, or similar relationship 4 I AFP Exchange Spring 2019 between FIS and Promontory Interfinancial Network, LLC, nor is such a relationship created or implied by the information herein. Fox River Execution Solutions and SGN brokerage services offered within the United States and Canada are provided by FIS Brokerage & Securities Services LLC, Member NYSE, FINRA, SIPC SAFETY. LIQUIDITY. RETURN. A COLLABORATIVE PROCESS

Use ICS ® as a Cash Management Tool With the Insured Cash Sweep® service, you don’t have to sacrifice safety for yield. You can earn a return, preserve daily liquidity, and access multi-million-dollar FDIC insurance coverage for large cash balances. ICS is Now Available on FIS’ SGN Short-Term Cash Visit InsuredCashSweep.com/AFP to learn more. Management portal

Placement of funds through the ICS service is subject to the terms, conditions, and disclosures in the service agreements, including the Deposit Placement Agreement (“DPA”). Limits and customer eligibility criteria apply. In the ICS savings option, program withdrawals are limited to six per month. Although funds are placed at destination banks in amounts that do not exceed the FDIC standard maximum deposit insurance amount (“SMDIA”), a depositor’s balances at the relationship institution that places the funds may exceed the SMDIA (e.g., before ICS settlement for a deposit or after ICS settlement for a withdrawal) or be ineligible for FDIC insurance (if the relationship institution is not a bank). As stated in the DPA, the depositor is responsible for making any necessary arrangements to protect such balances consistent with applicable law. If the depositor is subject to restrictions on placement of its funds, the depositor is responsible for determining whether its use of ICS satisfies those restrictions. ICS and Insured Cash Sweep are registered service marks of Promontory Interfinancial Network, LLC.

FIS is a separate entity from, and is not an affiliate with Promontory Interfinancial Network, LLC. There is no form of legal partnership, agency affiliation, or similar relationship between FIS and Promontory Interfinancial Network, LLC, nor is such a relationship created or implied by the information herein.www.AFPonline.org Fox River Execution Solutions AFP Exchange and SGN brokerage I 5 services offered within the United States and Canada are provided by FIS Brokerage & Securities Services LLC, Member NYSE, FINRA, SIPC AFP OFFICERS, COMMITTEES AND TASK FORCES

AFP OFFICERS AFP EXCHANGE EDITORIAL Exchange ADVISORY BOARD CHAIRMAN OF THE BOARD PRESIDENT AND Robert Whitaker, CTP CHAIRMAN DHL CHIEF EXECUTIVE OFFICER Suzanne S. Allen, CTP James A. Kaitz CompuDyne Corp. VICE CHAIRMEN OF THE BOARD COMMUNICATIONS DIRECTOR Terry Crawford, CTP MEMBERS Ira Apfel AMC Entertainment Inc. Nancy C. Griffin SunTrust Bank VICE CHAIRMEN OF THE BOARD EDITORIAL MANAGER Kari Kingori Jordan Krugman, CTP Andrew Deichler Laney College Invesco Ltd. Florie Petti SENIOR PRODUCTION DESIGNER PAST CHAIRMAN OF THE BOARD PwC Amy B. Cooley Jeff Johnson, CTP, CPA Michele L. Scott, CTP Amesbury Truth International Paper Co. CONTRIBUTING AFP WRITERS Bryan Lapidus, FP&A Joseph Tinucci, AAP PRESIDENT AND University of Colorado CHIEF EXECUTIVE OFFICER ADVERTISING James A. Kaitz Karen O. Trickle Kevin Boyle AFP Journal Communications, Inc. Sales Executive Eileen Zicchino BOARD OF DIRECTORS Bank of American Merrill Lynch CUSTOMER SERVICE Irena Barisic, FP&A [email protected] Brookings COMMITTEES, PROJECTS, Christopher Fulton, CTP TASK FORCES AFP EXCHANGE Selendy & Gay, PLLC 4520 East-West Highway, Jonathan Hall, CTP AUDIT COMMITTEE Suite 800 Matthew Skurbe, CTP Bethesda, MD 20814 Michael High, FP&A, CMA The Blackstone Group L.P. T: 301.907.2862 Royal Dutch Shell F: 301.907.2864 CERTIFICATION COMMITTEE www.AFPonline.org Ferdinand Jahnel, CTP Terri K. Mimms, CTP, FP&A Marsh & McLennan Companies, Inc. Purdue University [email protected] Joan Piscitello, CTP CTP BODY OF KNOWLEDGE COMMITTEE Iowa State University Jim Gilligan, CTP, FP&A Fred Schacknies Great Plains Energy, Inc. Hilton Worldwide, Inc. FP&A ADVISORY GROUP ABOUT AFP® Geetanjali Tandon Tamara Saront-Eisner, CTP The Association for Financial Air Liquide Bayer Professionals (AFP) is the Matthew Skurbe, CTP TREASURY ADVISORY GROUP professional society committed The Blackstone Group L.P. Sarah Schaus to advancing the success of its Allianz Life Insurance Company, N. A. members and their organizations. Gaileon Thompson, CTP, FP&A AFP established and administers CitiBank POLITICAL ACTION COMMITTEE the Certified Treasury Professional Jim Gilligan, CTP, FP&A and Certified Corporate FP&A Meredith Vance, CTP Kansas City Power & Light Co. Professional credentials, which set NTT DATA Services standards of excellence in finance. Each year, AFP hosts the largest networking conference worldwide for over 6,500 corporate finance professionals.

AFP EXCHANGE, Spring 2019 (ISSN 1528- 4077), is published quarterly at $90 per year for nonmembers by the Association for Financial Professionals, 4520 East-West Highway, Suite 800, Bethesda, MD 20814. Periodicals postage at Bethesda, MD, and additional mailing offices. POSTMASTER: Send address changes to AFP Exchange FOLLOW US ON 4520 East-West Highway, Suite 800, Bethesda, MD 20814.

6 I AFP Exchange Spring 2019 CURRENT EVENTS

JOHN HINTZE LanguageNew LIBOR-replacement initiative starts to address cash products

he initiative to replace LIBOR with so-called risk- free rates (RFRs) is moving into a critical stage Tfor corporates, as the market seeks to develop methodologies to smooth the transition and the forward- looking term rates commercial borrowers prefer. The Secured Overnight Reference Rate (SOFR) in the United States and the United Kingdom’s Sterling Overnight Index Average (SONIA) are the RFRs furthest ahead in terms of development, with similar benchmarks in Switzerland, Japan and the European Union in the works or planned. SONIA has been an active benchmark for several years, and the Federal Reserve Bank of New York began publishing SOFR in April 2018.

www.AFPonline.org AFP Exchange I 7 CURRENT EVENTS continued

In May, major derivative exchanges introduced the $800 billion in transparent overnight repurchase derivative contracts based on the two RFRs, and agreements used to generate SOFR. That has raised they’ve supported active if relatively small markets concerns about LIBOR disappearing even sooner than in the instruments. In addition, numerous banks and the 2021 deadline. governmental institutions have issued bonds and other Such a scenario is especially problematic for cash RFR-based loan products in support of the products, such as loans. They make up only about new benchmark. 5 percent of the $200 trillion in financial products Those early steps have gone smoothly and, in some referencing LIBOR, but they finance commerce globally. cases, occurred earlier than anticipated. The steps most The other financial products are derivatives, highly directly impacting corporates and other borrowers standardized contracts for which it is much easier began last fall and, if all goes as planned, should largely to develop contractual fallback language. Many cash be resolved this year. products, instead, are bespoke and changes must be negotiated individually. Term RFRs The ARRC released consultations in late September Key to corporate borrowers is the development of that sought public feedback to help develop fallback term RFRs that, similar to LIBOR, allow borrowers to language for syndicated loans and floating-rate notes. look forward and understand what their payments In early December it issued similar consultations for will be at the end of each term to better manage cash bilateral business loans and securitizations. flows. The pricing of most large commercial loans, for example, floats over three-month LIBOR, and borrowers Fallback language know what the payment will be at the end of each The consultations provide descriptions of fallbacks three-month term for the duration of their loans. envisioned by ARRC, comprising representatives from RFRs, instead, are overnight rates, so borrowers do mostly financial companies. A key issue is whether to not know their final payment until the end of the term, take a “hardwired” approach, favored by banks because when daily rate is compounded in arrears. In light of it would facilitate adjusting the thousands of lending SONIA’s head start, the ICE Benchmark Administration contracts they hold with customers, or a more flexible (IBA) has been able to derive a forward-looking term “amendment” approach. One exception is the Bank of version of the RFR from the trading of SONIA-based Nova Scotia, which supports a hardwired approach but futures at the Intercontinental Exchange, an affiliate. It expressed concern that for syndicated loans the ARRC displays that rate as well as the compounded-in-arrears has proposed a term SOFR to be the primary fallback rate for the one-, three- and six-month RFR, allowing rate, “although this benchmark has yet to be developed.” comparison with the term version. However the term RFRs and fallback language The ICE website (www.theice.com/marketdata/ for various financial products shape up—and the reports/244) also provides daily settings for active International Swaps and Derivatives Association is RFRs, currently SONIA, SOFR and Japan’s Tokyo developing fallback language for derivatives—corporates Overnight Average (TONA). should begin preparing for the transition away from The Alternative Reference Rates Committee (ARRC), LIBOR by familiarizing themselves with the fallback the NY Fed-sponsored body that chose SOFR to language the ARRC suggests in the consultations. replace LIBOR, announced last fall that it planned to Eric Juzenas, a director on Chatham Financial’s begin an indicative term rate for SOFR early this year. global regulatory solutions team, said there will very When that happens, the ICE website will be able to likely be variations to ARRC’s fallback language, driven display the forward-looking SOFR; it already provides by differences in products and market segments, but SOFR compounded in arrears. it will be used as a starting point for most dealers The clock is ticking to develop term RFRs, in part and lenders updating their documentation. Given the because the IBA may be unable to publish LIBOR uncertainty about when ARRC’s fallback language will after 2021, when large banks’ obligation to submit be operational, “corporates must preserve the flexibility their interbank lending rates expires, requiring existing to protect themselves if the fallbacks do not operate LIBOR-based products to use another benchmark as planned,” Juzenas said. “Particularly the ability to rate. In addition, banks’ submissions are dwindling and negotiate an appropriate spread adjustment in the often amount to less than $1 billion a day, compared to event of LIBOR unavailability.”

8 I AFP Exchange Spring 2019 “We expect to see increased focus on LIBOR transition as 2019 progresses. In particular, since a spread adjustment is the safety valve in any LIBOR transition protecting against value transfer, corporates should begin conversations with their banks about how a spread adjustment might be handled in the event of LIBOR unavailability.”

Spread adjustments are essential because the between parties to determine a successor rate and methods to calculate LIBOR and the RFRs are very spread adjustment. However, Juzenas said, negotiations different and so result in different rate levels, and inherently risk one party exerting leverage over the unwanted “transfers of value” could result. Juzenas said other, resulting in an outcome that diverges from the language from the ARRC proposals has already started originally negotiated intent. to show up in some loan documentation. He added “We expect to see increased focus on LIBOR that the hardwired approach provides contractual and transition as 2019 progresses,” Juzenas said. “In legal certainty should Libor become unavailable but particular, since a spread adjustment is the safety given term rates and spread adjustments have yet to be valve in any LIBOR transition protecting against value developed, it is uncertain how they will work in practice. transfer, [corporates] should begin conversations [with The amendment-based approaches, instead, their banks] about how a spread adjustment might be contemplate negotiation or reasonable consultation handled in the event of LIBOR unavailability.”

Your Business Moves Fast. Can Your Bank Keep Up?

COMMERCIAL SOLUTIONS Solutions at the speed you need from local bankers you can trust.

918.588.6448 | www.bokfinancial.com

© 2019 BOK Financial Corporation. Services provided by BOKF, NA. Member FDIC. BOKF, NA is the banking subsidiary of BOK Financial Corporation.

www.AFPonline.org AFP Exchange I 9 CURRENT EVENTS

More REGS IRS issues new regulations to clarify corporate tax reform JOHN HINTZE

he Internal Revenue Service is finalizing a bevy of regulations in anticipation of the 2018 filing season that will clarify and tighten up Tambiguous language in the recent Republican tax reform bill, potentially impacting corporate cash. The rushed passage of the Tax Cuts and Jobs Act on Dec. 22, 2017, and the resulting sparse or fuzzy language on important provisions has left corporate taxpayers and their advisors flustered about how precisely to apply the law. With the 2018 tax-filing season starting in earnest in March, regulators are

10 I AFP Exchange Spring 2019 “We had the law we were working from, and now we have a lot more guidance out there which may present upside and often downside, or things that need to be addressed.”

seeking to provide more detailed guidance on several fronts. Much of that recently issued or proposed guidance may impact companies’ available cash, whether that cash remains overseas or is brought back to the United States, and the amount of debt or existing capital the company uses to pursue acquisitions or capital-intensive projects. “If treasury hasn’t talked to the tax department lately about the impact of these regulations, it needs to be able to engage them,” said Kathleen Dale, principal, international tax, at KPMG. “We had the law we were working from, and now we have a lot more guidance out there which may present upside and often downside, or things that need to be addressed.”

Regulatory themes She said that a common regulatory theme has been anti-abuse provisions that give the government “significant discretion in disregarding or re-characterizing transactions entered into with—and this is the term [the IRS uses]—‘a principal purpose of avoiding the application of the provision.’” The new law, for example, lowers the corporate tax rate to 21 percent and eliminates corporates’ ability to defer overseas earnings, although its global intangible low-taxed income (GILTI) provision provides a route to cut the rate on those earnings in half. Still, 10.5 percent is more than if the taxes were deferred indefinitely under the old regime, and there are other unfavorable aspects, Dale noted. She added that some corporates have consequently restructured their operations to limit the earnings subject to GILTI, to minimize the impact of that tax. The proposed regulations, for which comments were due Dec. 9, 2018, and have yet to be finalized, essentially disregard those types of transactions. “To the extent companies planned to delay the effective application of the GILTI regime, they need to be aware of the ‘anti-abuse provisions’ in the proposed regulations that disregard many of those transactions,” she said. Since the introduction of GILTI, it is more likely that American companies’ overseas earnings will be taxed in the United States, in some instances at the lower rate, creating more of an incentive

Continued on page 12 CURRENT EVENTS continued

for them to bring cash home. Joseph Calianno, tax partner and international technical tax practice leader in BDO’s national tax office, noted several factors U.S. companies should consider when making that decision. They include: whether the foreign subsidiaries actually have the cash and whether it’s needed to fund their operations; and whether the cash is needed in the U.S. to make an acquisition or expand their facilities. In addition, the foreign jurisdiction may impose legal restrictions on distributing the cash to the U.S. parent, or a withholding tax. Another factor in whether to repatriate cash, Calianno said, will be the so-called “participation exemption” in Section 245A, permitting Another factor in certain U.S. corporations to receive a 100 percent dividend- received deduction on the distribution of dividends from their whether to repatriate foreign subsidiaries. The earnings that will generally qualify for the cash, will be the so- participation exemption are those of the foreign subsidiaries that have not already been taxed under certain anti-deferral rules. The new called “participation provision could enable a company to return overseas earnings in the form of a dividend, without being taxed. exemption” in American-based multinationals have been issuing record volumes Section 245A, of debt especially in Europe, to take advantage of ultra-low rates. In late November, the IRS issued a proposed rule under Section 163J that permitting certain may limit a US company’s ability to deduct interest expense. U.S. corporations “Depending on the company’s makeup, it will have to analyze the rules to determine whether it will be able to deduct the interest on the to receive a 100- debt it issues,” Calianno said. “After doing the necessary modeling, it percent dividend- could affect the company’s decision whether to incur debt to fund an acquisition or expand operations.” received deduction Dale noted that companies will have to reconsider the assumptions on the distribution underlying their business decisions. “If there’s incremental debt in the system that’s going to disallow interest expenses under 163J, of dividends then the company might decide it doesn’t want to deal with that from their foreign and make a capital contribution instead of funding through debt,” she said. “The company won’t get any deduction from a capital subsidiaries. contribution, but if [the interest-expense deduction] is already limited, it may just be simpler that way.” New regulations published Jan. 22, after being issued in proposal form last August, clarify how U.S. companies must pay repatriation taxes under Section 965 of the tax code. Dale said that companies made best efforts to calculate their mandatory repatriation tax liability for the 2017 tax year, based on guidance at that time. There are differences in the final regulations, however, and companies may have to recalculate that liability. There’s no materiality standard in tax, so accuracy is paramount to avoid triggering an “accelerated event” that could result in significant financial consequences, she added. “If you elected to pay your tax liability over seven years, and a company doesn’t do it the correct way, its taxes could become due all that year,” Dale said. “That would be a bad day for a lot of companies.”

12 I AFP Exchange Spring 2019 GENERAL HOUSING OPENS MARCH 21 We’ve partnered with some great hotels in Boston. Here are some fun facts about a few of them:

HISTORIC Omni Parker House In Parker’s Restaurant you can indulge in Parker House rolls or Boston Creme Pie – both creations of the Parker House.

ICONIC Fairmont Copley Plaza This hotel has hosted some grand individuals like John Lennon, Frank Sinatra, Elizabeth Taylor and every U.S. President since Howard Taft.

SPORTS-CENTRIC Hotel Commonwealth The official hotel of theBoston Red Sox, just down the street from Fenway Park. AFP, Association for Financial Professionals and the AFP logo are registered trademarks of Profes sionals. © 2/19.

MARCH CHECK OUT THE FULL HOTEL LIST AND BOOK YOUR STAY. www.AFP2019.org 21

AN19-AFPEx_FullPgAd_Spring_4.indd 1 2/14/19 8:29 AM GLOBAL TREASURER Center of Attention Four success factors for a regional treasury center

FRANCOIS-DOMINQUE DOLL AND SUSAN XU

leading practice in treasury management is to centralize operations into a treasury center, and an in-house bank (IHB) is Aconsidered as a best-in-class structure of a regional or global treasury function. The concept of IHB is not new and the benefits are self-explanatory. However, only a small number of companies have adopted this structure. The IHB’s roles and responsibilities include: • Cash management—to concentrate cash and to make or collect payments via payment and collection factories • Intercompany transactions—to perform nettings and arrange intercompany funding • Risk management—to monitor interest/foreign exchange/commodities/credit risk and enter into hedging scenarios where necessary • Bank relationship management—to manage bank accounts and negotiate terms & conditions • Treasury framework custodian—to standardize and enforce treasury policies and processes.

14 I AFP Exchange Spring 2019 Compared with decentralized or less centralized structures, IHBs will benefit companies with better visibility, stronger control, and a higher degree “The concept of IHB is not new and of standardization and economies of scale. The concept of IHB is not new and the benefits of the benefits of having an IHB are having an IHB are self-explanatory. However, so far, only a small number of companies (usually self-explanatory. However, so far, industry leaders) have adopted this structure. only a small number of companies A reason for the low adoption could be that companies are hindered by the lack of have adopted this structure.” knowledge to successfully transform their existing treasury operations.

Key steps Operating model Ideally, all treasury activities are conducted arrangement from professional services firms within the IHB; however, it is not always is a common solution to address a temporary feasible in practice depending on a company’s talent shortfall during the transition period. geographic reach. A single treasury center Meanwhile, ongoing engagement with is possible for a company with footprints in internal stakeholders is essential for a free markets alone; this structure might not successful transformation as treasury be a good fit for a company with footprints in activities such as cash forecasting and regulated countries where cross-border cash trade finance rely heavily on efforts from concentration and nettings are usually not other functions within a company. The permitted. A global treasury center supported treasury team needs to inform their internal by local or regional treasury functions is business partners of the changes in treasury a typical operating model to address the operations and elaborate on the benefits complexity of varying regulations. This model to each stakeholder. The team should also is also a prevalent approach if a company has articulate the follow-up actions that are to transact across multiple time zones. required, setting KPIs where necessary. By doing so, internal stakeholders are no longer Stakeholders passive information receivers but active Centralisation of treasury functions requires contributors in the treasury transformation. substantial spending and cross-functional A balanced change management approach collaboration. Therefore, it is vital to have is necessary to ensure project success and senior management champion the initiative positive outcomes. in order to secure financial support and Beyond the organization, engagement to obtain active inputs from other internal with external stakeholders such as banks and business partners. Within the treasury function, technology providers is equally important. As centralization means an organizational the treasury function evolves to become an restructure. Treasury teams may experience IHB, current banking relationships and system changes to their team dynamics with new capacity should be relooked. Can existing additions and exits. In such cases, it is critical banking relationships serve a new proposed to have an effective knowledge transfer cash management structure? Are legacy to minimize interruption. A secondment systems robust enough to execute treasury

www.AFPonline.org AFP Exchange I 15 GLOBAL TREASURER continued

activities, support increased volumes and generate effective tools to help realize them. Today, technology reports on an IHB level? The treasury team needs is advancing at an exponential rate, making once to consider these questions as early as possible to impossible targets now possible, and turning assess if any replacement or upgrading is needed so insights into foresights. The move towards treasury that additional budget and human resources can be centralization offers a good opportunity to rethink discussed and planned for. the company’s treasury technology. To plan for this, Ultimately, establishing a treasury center is a full these key points need to be considered: programme management, with several projects and • Are there any gaps between the centralization initiatives running in parallel. vision and current technology capability? For example, in order to achieve centralization, an Location automated payment process is expected. Will Ideal IHB locations are countries/regions with low the existing connectivity be able to support this corporate income tax and wide tax treaty networks, automation? If status quo is no longer valid in the given that there are benefits such as reduced or context of a new treasury structure, what will be exempted withholding taxes on interest of cash the solution? Would it be to improve the legacy pooling and intercompany lending. Singapore has system or to deploy a new one? been the most preferred location for treasury centers in Asia because of its attractive tax rates, liberal • Besides mainstream solutions, are there any other currency control, competitive business environment, new technology that can be adopted? Fintech has efficient infrastructure and high-quality talent pool. become a buzzword in the treasury space and there Hong Kong, an equally popular location in Asia, is is great potential with Robotic Process Automation seeing a growing trend of corporates setting up (RPA) to automate repetitive, labor-intensive and treasury centers since it rolled out its CTC (Corporate high-volume processes. Blockchain based solutions Treasury Centers) tax incentive in 2016 to compete for KYC, supply chain, payments and confirmations Singapore’s FTC (Finance and Treasury Center) are also emerging. At present, treasurers are still incentive. People may say Singapore is the gateway cautious towards the application of Fintech but this to Southeast Asia while Hong Kong is for corporates will change as Fintech gains wider adoption. with strong commitment to Chinese market, but this • As companies increasingly utilize cutting-edge is just a general pattern observed. It would be unfair treasury technology, it is important to integrate to say which one is a better choice as the selection between the treasury system and other internal/ of location for treasury centers is determined not external platforms such as ERP, accounting and only by tax regime but also by other considerations the banking system. Effectiveness and efficiency including business strategies, cultural proximity and will be compromised if the information cannot local banking and government relationships. be interfaced cross platforms automatically, the Aside from Singapore and Hong Kong, other objective being to achieve real time availability of potential locations in Asia including Shanghai, data and full visibility. Manila, Bangkok and Kuala Lumpur for treasury The transformation of the treasury function centers are emerging mainly due to their cost- towards the centralized IHB structure is not a effectiveness and gradual deregulation. However, one-time endeavor but a continuous effort to due to factors such as business environment and do better. The business landscape is constantly availability of talent, these locations currently act, in evolving, providing an environment ideal for most cases, as regional treasury centers or shared innovation. The treasury function needs to keep service centers, not as an IHB. adapting in order to create sustained value with its business partners. Technology The motivation to set up an IHB is to improve effectiveness, efficiency and transparency of treasury activities. Previously, the capabilities of Francois-Dominque Doll and Susan Xu are, respectively, treasury centers were constrained by technological Director and Manager, Global Treasury Advisory Services, limitations. Treasurers had visions but did not have Deloitte Singapore. The views expressed are their own.

16 I AFP Exchange Spring 2019 FP&A FORESIGHTS What's the

COSTApplying cost of capital in corporate finance

BRYAN LAPIDUS, FP&A

have previously written about cost of capital, covering the components of the calculation, where to find the data, and comparison to Icost of equity and cost of debt. In this article, we discuss how corporate finance professionals apply the cost of capital in their daily work.

How the cost of capital helps valuation Investors often faces the challenge of how to compare different sets of cash flows. For example, from an external perspective, how do you compare the value of companies that range across different sizes, maturities, industries, markets, and management? From an internal perspective, how do you select projects with many of these same variables? You can view both companies and their component projects as cash flow streams, then apply a net present value calculation using the cost of capital as the discount rate to create a risk-reward trade-off that allows for comparisons.

www.AFPonline.org AFP Exchange I 17 FP&A FORESIGHTS continued

The challenge of comparing project with different cash flows and time characteristics

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Project 1 10 10 10 10 10 10 10 10

Project 2 25 50 5

When used this way, the cost of capital cost or automation investment that saves $100 of capital helps solve many different kinds of of cost? By focusing on net cash flows challenges for investors and business managers. (revenue less expenses for marketing, and expense savings for infrastructure), or other Time value of money hard-to-value measures, investments can be Which would you rather have, $100 dollars standardized across different businesses. today, or the promise of $100 dollars in 10 If both projects reflect net cash flows to years? How about $1,000 in 10 years? We a company, it does not matter that one is understand that risk increases over time, so revenue based and the other is expense we value near-term payments more than savings, they are compared on their cash distant payments due to the eroding effects flow relative to company capital charge. of inflation, the risk of non-payment, or the option to take the money today and put Apply across capital stack it to work for the future. The discount rate As an investor, is it riskier to have a company devalues payments further in the future. or project that has capital contributions that • In the above example, if both projects are are 0 percent, 50 percent or 100 percent debt discounted by the same cost of capital financed? The cost of capital adjusts to reflect at 12 percent, Project 2 is preferable with the change in financing mix over time. its higher NPV). The variables of time and discount rate have an impact on the NPV; Always use cash flows for valuation. note that if the cost of capital is 4 percent, Accounting returns include non-cash then Project 1 has a higher NPV as cash distortions such as amortization/depreciation flows further out become more valuable. and revenue recognition. • This analysis enables us to compare Are the cost of capital and hurdle rate projects with very different cash flows on a absolute determinants? similar basis. If a project is independently financed, then yes, you may choose to make an investment Apply across risk determination based on whether its return is Which is more valuable, a forecasted $100 greater than the cost of capital. This is because from an investment in a new international the company capital is entirely aligned with the market or $100 from an established market? project (independent of other capital uses), Cost of capital can be adjusted for different such as buying a company (and its capital risks based on where the company operates stack) or investing in a project with its own or product is sold. Emerging markets would project financing, such as a joint venture, legal have a higher rate than established markets. entity or subsidiary. In the above example, if project 2 is in a new, If you are inside a company and looking at emerging market, as opposed to a higher, specific initiatives, the answer becomes current market, it will have a higher discount murkier because a company’s capital is rate which would give it a lower NPV; Project expended over items that drive sales, others 1 is then preferable. that are overhead (the CEO needs to be funded Standardizing comparisons across assets somehow!) Here is a hypothetical portfolio of Which is more valuable, a marketing investment options and how a CFO may think campaign that brings in $1000 of revenue, about the investment decision.

18 I AFP Exchange Spring 2019 Project Return metric* Decision

Project 1: Sales 18 percent Approved, higher than hurdle rate

Project 2: Marketing 14 percent Approved, higher than hurdle rate

Project 3: Infrastructure 13 percent Approved, higher than hurdle rate

Project 4: Sales 13 percent Not approved, other projects are more highly rated

Hurdle Rate: 12 percent

Project 4: Infrastructure 8 percent Potentially approve; it is possible that not all returns to an infrastructure project are accounted for.

Project 5: Sales 8 percent Not approved; revenue generating projects generally need to have higher hurdle rates

Project 4: Marketing test 3 percent Potentially approve; possible that the strategic or educational benefits are worth the low returns

Project X: Regulatory requirement 0 percent Approved, required for compliance

Weighted average portfolio IRR 13 percent Higher than cost of capital, includes growth, infrastructure, strategic and regulatory investments

*Return metrics need to be consistent with the cost of capital used. IRR can be compared to WACC, after-tax cash flows (EBIT*(1-tax rate) can be compared to WACC, and return on equity can be compared to cost of equity. Accounting earnings are discouraged due to timing and noncash treatments.

IT’S NOT JUST ABOUT CRUNCHING THE NUMBERS. It’s about how YOU give those numbers MEANING.

Showcase your unique skill set by earning your FP&A credential.

Visit www.FPAcert.org to Learn More

FP&A, Certified Corporate FP&A Professional and the FP&A logo are trademarks of the Association for Financial Professionals. © 2/19.

FPA-19_AFPEx_HalfpgAd_Spring_3.indd 1 2/14/19 2:24 PM RISK COLUMN

When ANDREW DEICHLER DISASTER Treasury needs to be a leader in business Strikes continuity planning

xtreme weather events like Hurricane Florence Determine your critical assets in 2018 and Hurricane Maria in 2017 are The first thing a treasury department needs to do happening more and more frequently. That’s when creating a business continuity plan is figure Ewhy it is more important than ever for companies to out all of its critical assets. One of the best ways to have a business continuity plan in place. determine this is by calling a meeting with the CEO Since the treasury function is at the forefront of a and CFO to hash out the business’ priorities and the company’s money, there may be no better department risks that can impact them. That way, when an event to be a leader in business continuity planning (BCP). occurs—be it a natural disaster, a power outage, or But to be successful, treasury needs to have a well a change in the marketplace, a change in a certain thought-out strategy in place. A recent Treasury in customer environment—the company will fall back on Practice Guide, underwritten by Kyriba, provides the “vision” it has set for itself. tips on how treasury departments can implement It is important to note that meeting with the CEO successful business continuity plans, so that the next and/or CFO is not a one-time thing. A company’s time disaster strikes, you’ll be ready. priorities can change, and treasurers need to stay on

20 I AFP Exchange Spring 2019 top of those changes. Therefore, treasury should be like that. People should have a folder at home with meeting regularly with high-level executives. that contact information.” Sarah Schaus, assistant treasurer and assistant vice Use a template or standard president for Allianz Life Insurance Company of North Once you iron out the business’ priorities, it’s time to America and chairwoman of AFP’s Treasury Advisory actually write the plan. Writing out a plan is not easy, Group, explained that her company has actually however, which is why many organizations utilize BCP appointed a business continuity management (BCM) templates to get started. Jeff Johnson, CTP, CFO of team to be the “first line” in any type of black swan Amesbury Truth and former Chairman of AFP’s Board event. Should the event last longer than 24 hours, then of Directors, believes that treasury departments should a second line gets called in. “Everyone knows their begin with a generic BCP template and adapt it for accountability before we get into a situation,” Schaus their needs. “The challenge a lot of organizations have said. “We even make little laminated business cards is that often they want to put something together but for people so everyone has the phone numbers of the they have no template,” he said. team that is part of that first line.” Sample templates can be found rather easily online. Although corporates may not always be the target Test it out audience for a particular template, many of these Once you’ve drafted your plan, it is crucial that you samples can be adapted for their uses. A good plan test it. If you don’t, how do you really know if it works? will provide an overview of the organization, identifying Even treasury departments who have strong plans in ANDREW DEICHLER key assets and the risks to them. It will specify place often find some aspects need to be tweaked the measures that can be taken in the event of an once confronted with a real black swan event. So emergency, what their objectives are, and who is tasked testing, and testing regularly, is a very important step with putting them into motion. It should also include in implementing BCP. a full distribution list of the plan recipients, as well as Schaus noted that Allianz performs regular BCP tables where any updates to the plan can be recorded. exercises across the organization, including groups like treasury, investment and operations. “We do tabletop Don’t forget the basics exercises, where we’ll sit in a closed room for three In early 2015, Akamai Technologies, a content hours and go through a scenario,” she said. “We’ll say, delivery network (CDN) and cloud services provider, ‘There’s a fire on the fourth floor, it’s noon and no one had to exercise its business disaster recovery plan. can get back to their desks or get home.’ Then, the Cambridge, Mass., where Akamai is located, was next level is, ‘Now it’s 5:00 at night, these people are forced to close its offices for non-network operations stressed and they need to get their kids from daycare. command center employees due to snowstorms. They’re starting to panic.’ So we do all that scenario “In order for our employees to be able to work role playing.” from home, our company failed over to our disaster recovery center elsewhere in the country,” said David Be a leader Neshat, treasurer for Akamai. “Had that not happened, Although BCP is not, and should not be, treasury’s working remotely would not have been an option. sole responsibility, it is an area where treasury must Employees wouldn’t have had the ability to logon to be a leader. Again, who better to make sure things emails/ERP systems/HR systems/etc.” stay up and running better than the one function that But if work email is down, that’s when treasury truly understands the inner workings of the business? needs a “plan B” to communicate. Members of Treasury is heavily involved in risk management, the treasury staff should have each other’s mobile is accustomed to taking an analytical approach to numbers and even personal emails so that they can address problems and is well-versed in compliance— get in touch with them as needed. It’s also a good idea simply put, treasury a perfect fit for BCP. to have personal contact information for key members of the IT staff, as well as departments that treasury works frequently with, like accounting. “If you can’t For more insights from treasury practitioners, reach them through work email, how do you reach download Business Continuity Planning: them?” Neshat said. “BCP goes back to simple things Why Treasury Needs a Plan B at www.AFPonline.org

www.AFPonline.org AFP Exchange I 21 TREASURY ESSENTIALS Connecting the DOTS Best practices in treasury connectivity

ANDREW DEICHLER

onnectivity is the glue that holds all of the key functions in modern corporate treasury together. Without it, there’s very Clittle that a treasury department can accomplish. In the latest Treasury in Practice Guide, underwritten by Kyriba, AFP examines best practices in treasury connectivity. We go through the systems that treasury connects to; the different connectivity protocols; external connectivity through treasury management systems (TMS) and internal connectivity through enterprise resource planning (ERP) systems; and new technologies that are, essentially, the future of connectivity.

What to know Bank connectivity is among the most essential for treasury teams. There are multiple facets to bank connectivity, from downloading reports, to uploading payments, to considerations around how technology is changing.

22 I AFP Exchange Spring 2019 “When we start talking about bank connectivity, workstation; some of the newer workstations have an most will think about bank formats,” said Bob Stark, easier setup in the cloud. So we’re probably on the vice president of strategy for Kyriba. “While formats back half when it comes to automated connectivity.” are a big part of connectivity, it’s best to start with the Sprint has used its treasury workstation for about protocol—how you actually connect to a bank.” a decade and is in the market for a new one, and will When connecting to banks there are many options likely go with a Software-as-a-service (SaaS) module that treasury can choose. In North America, FTP (File that is managed by a TMS vendor. And connectivity Transfer Protocol) is typically the standard for domestic between the treasury workstation and the banks could connections, whereas SWIFT is the most common for possibly be simplified, depending on the relationship connectivity to international banks. While there are global between the TMS vendor and the banks. “If the protocols such as EBICS that are for specific countries, vendor already has a relationship, then it could just these are not often used by American companies. be a matter of signing an authorization,” Smith said. However, as banks begin to open up their platforms “It could be as easy as flipping a switch. Or maybe it via APIs, many predict that both FTP and SWIFT works well with the bigger banks, but maybe with the connections could become obsolete, especially as smaller banks, you have to involve IT.” banks identify opportunities to expand real-time cash Most corporations that have large domestic and management services via APIs that were not possible international banking relationships will look to an using protocols such as FTP. intermediary for some or all of their bank connectivity When it comes to bank formats, there are many needs. The volume of what treasury sends and choices, largely dictated by geography. For bank receives becomes much more important, because reporting, we often see BAI files in North America and an intermediary such as SWIFT factors transaction MT formats internationally. Banks are starting to offer volumes into its pricing. XML ISO 20022 CAMT files as an alternative to these Nevertheless, sometimes choosing different bank traditional formats. Many expect XML CAMT formats connectivity methods can ultimately save money. The to become the market standard, a position SWIFT has treasury department at multinational courier FedEx is endorsed as it looks to replace MTxxx formats with in the process of moving over to SWIFT for all of its ISO 20022. payment files. Currently, when a bank wants to send treasury an MT940 statement, it has to go through What to choose one of FedEx’s two aggregator banks. “We connect To determine the most appropriate methods for to the aggregator, and they transmit a BAI file to us bank connectivity, a good place for treasury to start and those files are structured like MT940s,” said Kyle is with its banking profiles. For example, if you have Kremser, CTP, treasury systems and controls principal three domestic banks, and one is your “lead” bank, for FedEx. that network would likely be best managed by host- But now by moving to SWIFT, treasury will be to-host connections. You probably won’t require third- able to connect to those banks around the globe party software or the use of a network like SWIFT to and receive those statements directly. FedEx be able access your banks. You can connect to them should achieve substantial cost savings with this through FTP or an API directly, which would allow you effort. “Internationally for treasury we see that the to download statements and upload payments without connection will be more expensive, but we are any middleware or intermediary networks. eliminating the aggregation in the U.S. as well, and net The treasury department at telecommunications we will be saving money for our treasury connections,” giant Sprint typically uses the online portals that its he said. banks offer. Treasury manually logs in and pulls the This is part of a larger initiative from FedEx’s bank file and imports it into its treasury workstation. treasurer to move to SWIFT payments enterprise-wide. “Because we’re on the website for multiple reasons “We are already moving to SWIFT for the treasury like initiating payments, we just go ahead and payments, but we’re being challenged additionally to download the BAI formats that our banks offer for our move everything to SWIFT, including accounts payable workstation,” explained Howard S. Smith, CTP, treasury and reconciliation statements coming in,” said Kremser. manager. “It’s a small enough operation. We just got in the habit of doing it this way so we don’t have For more insights, download Best Practices in Treasury to compete for IT resources. And we have an older Connectivity at www.AFPonline.org

www.AFPonline.org AFP Exchange I 23 PAYMENTS ESSENTIALS Setting the Standard APIs: the search for ubiquity and standardization

ANDREW DEICHLER

pplication programming following the adoption of the EU Kong, Singapore and Mexico have interfaces (APIs) are Directive, the Revised Payments also embarked on API initiatives. Aemerging as the key to Services Directive (PSD2) by the As for the United States, it is improving payments between European Commission, which went unlikely that there will ever be a corporates and banks. And with into effect in Europe a year ago. mandate like PSD2. Nevertheless, new initiatives like the Revised The directive’s goal is improving U.S. banks have begun to migrate Payments Services Directive competition in banking and towards open banking, as it (PSD2) in Europe, APIs are payments in the European Union. presents significant opportunities quickly infiltrating the psyche of Similar open banking initiatives for them. As Magnus Carlsson, businesses around the globe. But have also arisen in other regions. AFP’s manager of treasury and without standardization, APIs In the UK, the Competition and payments explained in a 2018 cannot be as effective as they Markets Authority directed nine article, “there do seem to be some need to be. banks to allow their customers to indications that U.S. banks are share their data with other banks already realizing that this trend Open banking initiatives and third parties. In Australia, the would actually open up not only A number of initiatives have been four major banks are slated to their data, but potentially also new launched over the past several begin to sharing information with business opportunities.” years that have brought APIs to the other financial services providers Open banking also presents forefront. Some of these endeavors next year as part of a government opportunities for corporates; are centered on APIs themselves, mandate. And in Japan, regulators Carlsson noted that if corporate while others apply them as a critical have been taking cues from Europe customers grant them permission component to achieving a goal. and have amended the Banking to use their bank account details The use of APIs in treasury is a Act, requiring at least 80 banks and receive the payment straight fairly recent development, largely to open their APIs by 2020. Hong from the customer’s bank, they

24 I AFP Exchange Spring 2019 Standard

could bypass intermediaries. “In app will be required to interact with that supports long-term standards other words, this could mean that each bank. With standardization, and adoption. According to corporates could get paid directly, a developer could design and NACHA, Afinis is a collaborative and potentially much cheaper,” implement one app that would venue for developing API he wrote. interact with countless banks products for financial institutions, without needing modifications.” technology providers, businesses API standardization NACHA noted that if 1,000 banks and governments. In the United States, no enable a common service using Janet Estep, president and CEO of organization has been more 1,000 different APIs, that's far from NACHA, called API standardization proactive on APIs than NACHA. efficient. Thus standardization— “critical” for the financial services Over the past year, the payments and standardization with the industry to achieve its full potential. organization has made major proper governance—is a “critical “Afinis is a membership-based strides in furthering the progress of component to ensure consistency, organization that collaborates API standardization. compatibility, effectiveness, openly with groups from around In a recent whitepaper, NACHA sustainability and interoperability.” the world to share learning, reduce made the case for standardization, In the fall of 2018, NACHA took duplicative efforts, and create and noting that banks currently use its biggest step in its push for API adopt standards that lessen friction “disparate and customized formats standardization with the launch of and improve the ability to bring to share information, employing a new organization and three new innovations more quickly to market,” different nomenclatures for APIs that could benefit corporate she said. common terms and processes. treasury functions. Without standardization, every The ASIG and IFM partnership Download APIs: The Search for time a developer tries to create or is now known as Afinis, a Ubiquity and Standardization at update an app, changes to that membership-based organization www.AFPonline.org.

www.AFPonline.org AFP Exchange I 25 AFP RESEARCH: 2019 RISK SURVEY

The Big

Results of the 2019 AFP Risk Survey, Supported by Marsh & McLennan3 Insights AFP RESEARCH DEPARTMENT

reasury and finance professionals believe percent of respondents anticipate using more that strategic, cybersecurity and financial non-traditional vendors in the future. Non- Trisks will remain the top areas of concern traditional vendors include vendors other than for the next three years, according to new research banks that are offering niche services, such by the Association for Financial Professionals. as technology providers, payment providers, In a poll of nearly 400 practitioners, the fintechs and task-oriented contract employees. 2019 AFP Risk Survey—The Evolving Treasury Treasury professionals believe they will mostly Ecosystem, supported by Marsh & McLennan use non-traditional vendors within treasury Insights, found that 60 percent cited strategic services technologies and merchant services risk factors such as competitor and industry technologies. Flexibility, adaptability and disruptions as their biggest area of concern. customization are the primary reasons treasury Cybersecurity risk ranked second at 51 percent practitioners are choosing to use these vendors. while financial risk stemming from credit, The survey found that despite the challenges, liquidity, currency and interest rate risk came in treasury professionals are anticipating, treasury third at 39 percent. departments expect to maintain their current While fintech is a growing challenge and level of full-time staffing over the next three opportunity for treasury and finance, only 34 years, the survey found.

26 I AFP Exchange Spring 2019 “With the top three risks having a direct rank strategic risks, which include competitor link to the treasury department, corporate and industry disruptions, as the top risk treasury more than ever needs to become a impacting their organization. This percentage stronger business partner to management is slightly lower than the 62 percent from the and other business units,” said Jim Kaitz, 2018 AFP Risk Survey. president and CEO of AFP. “Additionally, the Meanwhile, 51 percent report that skills within treasury will need to evolve with cybersecurity risks need to be watched closely, the increasing use of non-traditional vendors a result similar to the 52 percent last year. and technologies.” Ranked third is financial risks, cited by 39 percent of respondents, followed by political Strategic risk and cyberrisk risks and regulatory uncertainty in the United As companies’ scope of operations widens, States (34 percent). In last year’s survey, their risk profiles are becoming complex. The political risk and regulatory uncertainty ranked majority of survey respondents (60 percent) third followed by financial risks.

Strategic Risks and Cybersecurity Risks are of Significant Concern

Current Risks and Anticipated Concerns for Risks over the Next Three Years (Percent of Respondents Who Rank Risks in Top Three)

Current Anticipated Current Anticipated Current Anticipated

60% 58% 34% 33% 23% 20%

STRATEGIC RISKS POLITICAL RISKS REPUTATION RISKS 3 (e.g., competitor, industry disruptions, etc.) AND REGULATORY UNCERTAINTY (risk of loss resulting from WITHIN THE U.S. damages to a firm's reputation)

51% 52% 31% 39% 14% 12%

CYBERSECURITY RISKS TECHNOLOGY RISKS EXTERNAL RISKS (e.g., disruptive technologies) (e.g., natural catastrophe, terrorism)

39% 39% 31% 28% 12% 11%

FINANCIAL RISKS GEOPOLITICAL RISKS ENVIRONMENTAL RISKS (credit, liquidity, interest rate, currency/FX, etc.) (e.g., political instabilities and (managing environment performance impacts, regime changes that impact supply chain) e.g., sustainability demands, climate change regulations, chemical hazards, etc.)

Source: AFP 2019 Risk Survey.

www.AFPonline.org AFP Exchange I 27 AFP RESEARCH: 2019 RISK SURVEY

Earnings Uncertainty Today versus Three Years Ago (2015) organizations with annual revenue less (Percentage Distribution of Organizations) than $1 billion have on average 6.76 FTEs on their treasury teams, while respondents from privately held organizations report an average of 9.52 FTEs in their treasury departments. Within three years, organizations estimate the average number of FTEs in Treasury will be 15.59. 50% 37% 13% Over time, treasury professionals have built strong relationships with their banking partners and other entrenched vendors. Building new relationships requires keen effort and hard work from all parties involved—and that can be time consuming. As such, is it not surprising that one-third 50% 37% 13% Exposed to the same level Exposed to Exposed to of survey respondents indicate that the need of uncertainty more uncertainty less uncertainty to develop relationships with non-traditional vendors is the greatest drawback in using Source: AFP 2019 Risk Survey. one. Furthermore, non-traditional vendors may have limited experience. Financial Less Exposure to Uncertainty leaders are primarily concerned about A lower percentage of treasury professionals whether these vendors have the necessary report their organizations are exposed to and relevant experience when partnering greater uncertainty compared to three years with organizations of their size—a concern ago (37 percent versus 49 percent). At the cited by 29 percent of survey participants. same time, half of respondents report no Among the drawbacks to using change in the level of uncertainty, a larger non-traditional vendors is establishing share than last year’s 40 percent. relationships that cannot be leveraged across other products (much like a traditional bank Staffing levels vendor could), which leads to higher costs. The typical organization currently has In addition, organizations may also face six full-time employees in its treasury the challenge of being “a big fish in a small department, on average has 14.75 FTEs, pond;” this is because some non-traditional and anticipates only a slight increase in the vendors do not have customers with similar number of FTEs over the next three years. characteristics due to their limited size and Larger organizations with annual revenue capabilities. As a result, an organization of at least $1 billion and publicly owned could become a very important client for a companies have on average 18.61 and 18.88 non-traditional vendor, while the vendor’s full-time employees, respectively. Smaller credibility remains a concern.

Download the full results of the AFP 2019 Risk Survey at www.AFPonline.org/Risksurvey.

28 I AFP Exchange Spring 2019 AFP RESEARCH: 2019 RISK SURVEY KEY HIGHLIGHTS

STRATEGIC TREASURY SERVICES MITIGATING RISK with (cited by 60% of respondents) TECHNOLOGIES non-traditional vendors CYBERSECURITY (51%) and (46% of respondents) and is done by conducting FINANCIAL RISKS (39%) MERCHANT-SERVICE DUE DILIGENCE (76%) are seen as key challenges TECHNOLOGIES (33%) and obtaining over the next three years. are using non-traditional CUSTOMER REFERENCES vendors more than other (62%). operational areas.

A smaller percentage of Treasury functions appreciate A large share treasury professionals report the FLEXIBILITY AND of organizations (81%) their organizations are ADAPTABILITY (58%) are NOT fully confident EXPOSED TO GREATER of non-traditional vendors. that they are UNCERTAINTY PREPARED TO USE compared to three years ago NON-TRADITIONAL (37% vs. 49%). VENDORS.

Treasury departments have LACK OF Despite increased YET TO EMBRACE RELATIONSHIPS (32%) concerns of risks NON-TRADITIONAL VENDORS; and INSUFFICIENT TREASURY DEPARTMENTS only (34%) of organizations EXPERIENCE (29%) ARE EXPECTED TO MAINTAIN plan to increase their use of with an organization are primary THE SAME LEVEL OF FTEs non-traditional vendors. DRAWBACKS OF or see a modest increase in NON-TRADITIONAL VENDORS. the next three years.

Source: AFP 2019 Risk Survey.

www.AFPonline.org AFP Exchange I 29 AFP AWARE

AFP Aware Giving back to Chicago

ANDREW DEICHLER

AFP 2018 attendees gathered in Chicago for the tenth Safe Haven Foundation annual AFP Aware Community Service Project. AFP AFP Aware partnered with A Safe Haven Foundation Aware gives back to the region where the conference (ASHF), which provides shelter and services to Chicago- is taking place by partnering with a local nonprofit area residents who are struggling with homelessness, organization. addiction, abuse and other issues. The nearly 25-year- For the ninth straight year, AFP Aware was sponsored old nonprofit operates a network of over 36 multifamily by BBVA Compass. “For BBVA, one of our goals is to be locations for permanent and senior affordable housing, an integral part of the communities in which we service, as well as a temporary housing program that includes and to give back,” said Ernest Smith, CTP, FP&A, Senior meals, case management, drug and alcohol treatment, Vice President, Regional Sales Manager, Texas TM Sales healthcare, and job training and placement. for BBVA Compass. “We’ve sponsored [AFP Aware] for ASHF offers classes for GED test preparation, resume nine years and each time, it allows us to partner with building, relapse prevention, financial and computer AFP and make a tangible difference in the communities literacy, health, and nutrition. The organization also has where the conference is being held.” apprenticeships in welding, landscaping and culinary Smith himself has been to eight of the past nine AFP arts, as well as vocational training in housekeeping, Aware events, and each one has made an impact on him security and customer service. personally. “Every time I go, I learn something different, The offsite AFP Aware project took place at ASHF’s I learn about the needs of the community, and I have a main building, which houses 400 of its clients. Volunteers great time,” he said. “It’s one of the most well-attended assisted in painting hallways throughout the facility, as events because as people come, they have fun and they well as minor kitchen services. For the onsite project, realize that it’s something different; it’s not your typical volunteers assembled hygiene kits for homeless conference activity.” individuals throughout the greater Chicago area. Fully 92

30 I AFP Exchange Spring 2019 Giving back to Chicago

Patricia Hui, CTP, Director, Tax and Treasury PMO for Oracle, has also been coming to AFP Aware for the past conference attendees participated in both events. For the nine years and echoed Johnson’s sentiments. “I think onsite event, more than 800 kits were assembled. it is very important for the members to give back to “This is 10 years of AFP Aware, and I have been to the community—especially the host city where AFP is nine,” said Jeff Johnson, CTP, CPA, Chief Financial hosting the event,” she said. “You also meet a lot of your Officer for Amesbury Truth and former AFP Chairman. peers, so it is a great networking opportunity.” “I have to say that it is an opportunity to do something Tom Wolfe, CTP, Director of Treasury Services for good—to give back to the community. So you’re able Avmed Health Plan, has been volunteering for the AFP to do something that benefits the world, and makes it a Aware event for the past four years and he wishes better place.” he had been part of it from the very beginning. “The Johnson added that AFP Aware is also an incredible primary reason people come to AFP Aware is to give networking opportunity. “You are meeting people, and back,” he said. “We get so much out of AFP every year in a very informal manner—you’re shoulder-to-shoulder with the conference; we go to a city, and we’re there and elbow-to-elbow as you’re packing soap into bags for several days. It’s great to have that opportunity on for the homeless or you’re planting trees on the side of Sunday morning to come in and be able to give back to the San Diego River—it’s a tremendous event,” he said. the community and really make an impact.”

www.AFPonline.org AFP Exchange I 31 AFP 2018: PINNACLE AWARD

In the Fast Lane Speeding up payments for its drivers won Uber Technologies the AFP Pinnacle Award

ANDREW DEICHLER

Uber Technologies was announced as the AFP 2018 Pinnacle Grand Prize at the Opening General Session of AFP 2018 in Chicago. The Pinnacle Grand Prize, sponsored by Mitsubishi UFJ Financial Group, recognizes excellence in treasury and finance. “AFP is proud to honor Uber Technologies with the 2018 Pinnacle Award Grand Prize,” said AFP President and CEO Jim Kaitz. “Uber’s initiative is the kind of smart, innovative solution that exemplifies what the Pinnacle Award is all about.” MUFG donated $10,000 to the charity of Uber Technologies’ choice, Meals on Wheels San Francisco, whose mission is to provide a network of services that allows seniors to live in their homes with dignity and independence as long as possible. Ranjana Clark, Chief Transformation Officer, Head of Transaction Banking Americas, and Bay Area President for MUFG, hosted the ceremony. “MUFG is honored to partner with the AFP in recognizing companies for their achievements in treasury and finance,” said Ranjana Clark. “Uber Technologies’ submission demonstrates how an innovative approach can transform payments and business. We congratulate Uber Technologies on receiving this year’s Pinnacle Award and we are proud to support their Bay Area charity Meals on Wheels of San Francisco.”

32 I AFP Exchange Spring 2019 Uber Instant Pay Uber Technologies’ submission focused on enhancing payments for its drivers. Uber, which previously paid drivers once a week via ACH, introduced Instant Pay, a daily, on-demand payments process that utilizes debit cards. The new system actually pays drivers before riders’ funds are deposited—a decision by the company to place drivers above the bottom line. “The Any Debit product allows any driver who has a debit card to give us their card details, and we would, upon request, pay them instantly,” said David Tao, treasury manager for Uber. The real-time aspect of the Instant Pay product allows for immense flexibility around when and how Uber drivers want to get paid, Tao added. “All they do is provide us a debit card number, and we can provide real-time payments to them with the push of a button. They receive the payment to their card within seconds—if not milliseconds,” he said. “If they want to get paid in the morning or the evening, depending on when they drive, we’re not subject to any clearing system cutoff time, and this lets them use funds as they earn them.” By giving the driver the option of when to cash out, it allows them to receive payments in the way that best suits their lifestyle, explained David Watt, CTP, former treasury director for Uber. “We didn’t want to be constrained by the business hours and the delays in the ACH system,” he said. “So that’s why we looked for something that could really, truly give them the funds instantly, after they cash out. We think this is something that really suits their needs and makes them want to work with Uber more than our competitors.” Looking the future, Uber’s treasury believes it can improve upon its system even further. “We want to make it cheaper and even faster,” Watt said. “We also want to roll it out beyond just the U.S. There are a number of major countries in the works right now, and we’re also looking beyond cards, to all of the faster payments systems that the banks are rolling out around the world—Faster Payments in the UK, [the New Payments Platform (NPP)] in Australia, etc. We want to do this for everybody, everywhere.” Uber Technologies beat out two other Pinnacle finalists—BMC Software and OpenText. These three organizations were selected as the Pinnacle finalists because their innovative solutions helped their treasury and finance operations run more effectively.

“Uber’s initiative is the kind of smart, innovative solution that exemplifies what the Pinnacle Award is all about.”

www.AFPonline.org AFP Exchange I 33 FP&A

The Right Ingredients How BMC Software baked up sales forecasting success

BRYAN LAPIDUS, FP&A

34 I AFP Exchange Spring 2019 Accurate sales forecasting is hard. Here are four steps BMC Software took to improve its sales force accuracy. AThis fall, for the first time, an FP&A project was among the three finalists for AFP’s prestigious Pinnacle Award, sponsored by Mitsubishi UFJ Financial Group. Pankaj Tamrakar, treasury manager, submitted on behalf of BMC Software in Houston, Texas. The description of his project is below, but it is important to note the underlying factors that made it possible. The story of the effort reads like a well-stocked kitchen, where the ingredients are available and waiting to be put to use. You can look for these ingredients in your own cupboard to see if you too can bake up success in your organization:

• CROSS-TEAM COMMUNICATION: every week, the business unit president met with sales, marketing, product and finance.

• SKILLS AT THE POINT OF ACTION: Tamrakar has a background in IT and programming, and by nature is looking for ways to improve efficiency. He also had a ready set of data in the form of quarterly results.

• ITERATIONS OF SUCCESS: Big ideas were built on smaller ones. Tamrakar had previously upgraded existing databases from Access to SQL, gaining familiarity with data and tools, and expanding his concept of what could be accomplished. Sales created a new metric, “New Bookings vs. Renewal Bookings.”

• CULTURE OF INQUIRY: “It starts with a question, and everyone at the table has always been willing to answer,” Tamrakar said. “We have a culture of challenging the status quo and fostering innovation. No one ever shuts me down. My VP of FP&A is a very encouraging and supportive of new ways of analyzing data and getting business insight from it.”

The challenge BMC Software (BMC) sells software licenses and post-contract maintenance and support for the software it sells. The maintenance is renewable on a periodic basis and is a recurring revenue stream that makes up a large portion of overall revenue. The company wanted to put increased focus on growing the business through sales of new license and maintenance contracts. The company added a metric to measure this differentiation called “New Bookings (sales) vs. Renewal Bookings.” To make the best use of this data, the sales team needed to understand the relationship between new and renewal bookings and how they could leverage this information to increase the sales pipeline and revenue while improving forecast accuracy. Additionally, in a sales workshop, BMC noticed that sales was struggling with the identification of cross-sell opportunities, and BMC thought there should be a better way to do this. “That’s when we started building the bSMART tool,” Tamrakar said. “The biggest ‘Aha!’ moment for us was coverage ratio insight that we got the from the historical close-rate analysis: Closing a deal with a net new customer needed a much larger sales pipeline than we ever thought. That was consistent across all the product lines. That’s where it made sense to implement the solution at the BMC level.”

www.AFPonline.org AFP Exchange I 35 FP&A continued

The sales teams had to manually review the Four steps for sales forecasting success customers in their space to see which products customers did and did not own; bSMART achieved that in an automated fashion. Also, Analyze current/ future pipe across bSMART uses level of detail (LoD) functionality 3 core NB buckets Find the in Tableau to analyze which customers own a gap in pipe BMC product but not a complementary BMC product in a quick and visual way to highlight and quantify new sales opportunities. One of Hist. the most valuable and synergistic additions Close was the leveraging and inclusion of the bSMART Rate Propensity to Buy model, an algorithm that uses Analysis historical sales data to identify which customers were most likely to buy. The result was a multifunction tool in a single screen. This tool ULTRA helps to facilitate pipeline generation by using business intelligence, analytics, and automation to identify cross sell opportunities within existing BMC customers with a high likelihood of converting. “Existing customers are already Generate pipe Leverage renewals aware of our brand, and we can leverage existing using bSMART using ULTRA relationships with champions and executive buyers,” Tamrakar said. Finance was partnering with the business annual bookings plan creation and predicted and realized that by using analytics, it could how much of that plan should come from help the business draw insights into the new renewals attach vs. standalone new bookings. metric of new versus renew, and that’s where This insight in the plan helped sales manage the ULTRA solution was born. ULTRA identifies sales productivity and sales headcount the correlation between new and renewals sales allocations very effectively and efficiently. pipeline and predicts how much of new business Success was not automatic, however. “The should come from existing customers versus net biggest setback/roadblock was adapting to new customers in current or future quarters. Sales this new way of looking at the business and management can visually see how much of new change management as a result,” Tamraker pipeline is coming from existing customers versus said. “The other product lines initially ignored net new customers and design strategy around or didn’t believe our analysis, but later when sales execution and sales force allocation. our forecast accuracy improved and leaders saw our financial performance improved and we The results won an operational innovation award from our The first insight was that acquiring new CEO, it really highlighted the solution and other business from new customers required business leaders also came on board.” generating much a larger sales pipeline than What makes it unique is that the tools were new business from renewing customers. Sales developed by finance employees who identified could leverage this insight to allocate resources the opportunity for improvement and created an more efficiently by optimizing the sales coverage automated, home-grown solution using Tableau. ratio for current and future quarters. “ULTRA and bSMART are excellent examples The second insight was that due to the high of how finance planning and analysis at BMC correlation between new bookings and renewal is applying predictive business analytics to bookings, there was a large opportunity to support decision-making and improve business leverage existing renewals to increase new partnering resulting in increased revenue, sales in terms of additional capacity or cross operational efficiency, and cost savings,” sell. Sales and FP&A leveraged ULTRA for Tamrakar said.

36 I AFP Exchange Spring 2019 FP&A ANALYZE THIS Improve your data analysis skills with three steps

DR. BILL HU, FP&A, CTP, CFA

hile data is everywhere and statistical tools are proliferating in software, there is a rising premium placed on critical thinking related to data analysis Wprojects. Knowing what could go wrong, and the questions you should ask to help it go right, will make you a better producer and consumer of statistical and data analyses. During the AFP webinar on this topic, Professor Bill Hu touched on several questions he considers. By popular demand, he has elaborated on his points during that webinar. He has arranged his questions according to three general phases of an analytical project: preparation, analysis and conclusion.

www.AFPonline.org AFP Exchange I 37 FP&A continued

Q: How to deal with low quality and/or unstructured data? Do you trust your data? If you have doubts about the “Do you trust your data? data, what do you do? You have to prepare and clean the If you have doubts about data, taking into consideration the limitations of the source. In the early years when transaction data was the data, what do you do? recorded manually, there were lots of errors. Using it You have to prepare and required cleanup via various filters based on business knowledge, such as transaction value cannot be clean the data, taking into negative or larger than the U.S. GDP (that would be some trade!). This was intensive but necessary before consideration the limitations getting to the analysis stage. of the source.” In a different example looking at unstructured data, I studied the impact of stock spam emails on stock prices and volumes. These seemingly nonsensical spam messages do increase trading volume and have significant price impacts, however, it’s no easy task to Preparation analyze the spam messages. There are lots of misspelled A data analysis project starts with a business question words, intentionally or unintentionally. For example, the to be answered. It involves three steps. First, are we number four would be spelled as f0ur. To process this solving the right problem? The second is about data and data, we first select a random sample and read through methodology. The third is about results and actions. these to get a rough idea of what might go wrong. Then we developed a plan to address these challenges, applied Q: Are we solving the right problem? machine learning to analyze a pilot dataset at a scale If we are not on the same page with the stakeholders, beyond what people could do, and then extended the everything could go wrong. Therefore, we need to analysis to the full dataset. understand the business question, define goals explicitly, and make sure these goals are agreed to by relevant Q: What’s the right sample size? parties. Write them down as a shared agreement! It depends on the planned significance you have set In a simple example, let’s say we are trying to assess with your stakeholders. Pro tip: for customer surveys or the earnings management of selected companies. Sounds polls, if we are looking for margin of error of 5 percent, simple, but in practice we need to discuss and define simply inverse the 5 percent to get 20. Then square it to “earnings management.” Is that an earnings surprise get the sample size of 400. relative to management guidance, an analyst forecast, or a benchmarked group? What are “earnings”—net income, Analysis EBITDA, EBIT, operating earnings? Do we normalize for Q: Why and how do we transform data? unusual events or accruals? We need to be mindful about the underlying data In a second example, let’s consider the case of characteristics and perform transformation as needed. I’ll Blackberry, a smartphone company whose products discuss two types of transformations. are out of favor, trying to reduce their inventory. Their First, pro tip: in forecasting, we can calculate the search for efficiency would come through partnerships forecast error as the actual value less forecast. However, and alliances, which requires out-of-the-box thinking if we simply sum up the forecast errors, the positive ones and has little to do with statistical analysis. Retailers, cancel out the negative ones to lead to a false conclusion. however, will benefit from just-in-time inventory Here we can transform the error to either absolute values management, which relies on accurate, timely forecasts or square the errors and then take a square root. to match supply and demand. This led to an investment Second, pro tip: when the ratio of max/min is greater in “smart shelf” technology in order to underpin the than 10, we may look into log transformations. The larger goal of forecast accuracy, a few steps away from log transformation is particularly useful for skewed simply focusing on reducing inventory! data as small numbers get spread out more and large

38 I AFP Exchange Spring 2019 numbers are squeezed closer together. The result of time periods? How about business cycles? How the transformation is close to a normal distribution: about countries or locations? How about across symmetrical and with equal spread. The normal departments? distribution is typically necessary for t-tests that are used Obviously, the objective of the analysis will drive to evaluate whether the results are significant or not. these partitions. In summary, for data transformations, it’s important to look at two factors: the shape of the distribution and the Q: How do we interpret and communicate results? ease of interpretation. In the AFP Guide, we present a case to predict customer churns by running a logit regression. One Q: How do we deal with outliers? of the predictors is whether the account involves any We generally use visual plots to locate outliers. We customer disputes or not. The regression coefficient then compute statistics with and without outliers. If for variable Disputed is 1.885. How do we interpret conclusions are not affected by outliers, we report results this coefficient 1.885? We undo the log transformation with the full dataset. Otherwise, we need to examine and calculate an odds ratio by raising e to the power outliers carefully to see what else can be learned. Are of 1.885. The result is e1.885 = 6.6, i.e., a customer there recording errors? – then correct it. Do outliers come is 6.6 times more probable to churn if the account is from different populations? If yes, report results excluding Disputed, while keeping all other factors constant. the outliers and the reason for exclusion. If not, report We may anticipate a question such as “Why do results of both analyses and call for further investigations, we take all the trouble doing the transformation from such as performing a residual analysis. Sometimes, much probability to log odds?” It is usually difficult to model can be learned from studying true outliers! a binary variable. Transforming a binary variable into real numbers (from negative infinity to positive infinity) Q: How do we decide which variables to include in is desirable in statistical analysis and involves three or exclude from the analysis? steps. The first step is to transform it into a probability, There are two good reasons for reducing a large number which is a continuous variable with a restricted of explanatory variables to a smaller set. First: simplicity is range between 0 and 1. To extend the range from 1 to preferable to complexity. Second: unnecessary terms in the positive infinity, the probability is further transformed model yield less precise inferences. to an odds ratio. Finally, a log transformation maps We can use statistical tools to see whether a variable positive numbers into real numbers. Although the log adds value to the equation or not. Statistical models transformation is not the only choice for this purpose, are almost never exact, so most software estimates the it is the easiest to understand and interpret. This information lost by applying different models.; the smaller transformation is called logit transformation. The other the information loss, the better is the model. A general common choice is the probit transformation. three-step strategy for dealing with many explanatory The lesson here is that if you were to use some variables would look like this: statistical tools, it’s essential to understand it well so 1. Identify the key objectives. that you can interpret the results correctly. Moreover, 2. Screen the available variables using exploratory it is equally important to communicate the results in analysis to decide on a list that is sensitive to an easy-to-understand manner to the audience. In the objectives. summary, as finance professionals, we wear many 3. Use information criteria to find a suitable subset hats: knowledge of finance, statistical skills and art of of explanatory variables. The two most common communications. That’s why finance is a highly valued approaches are called Akaike and Bayesian and respected profession. Let’s keep it up! information criterion (AIC or BIC).

Conclusion Q: Is the analysis robust? Here we shall do lots of partitions of the data, by Dr. Bill Hu, FP&A, CTP, CFA is president of Techfin and a slicing the data from different angles to test whether professor of finance at Arkansas State University. Email the results still hold. Is the analysis sensitive to him at [email protected].

www.AFPonline.org AFP Exchange I 39 FP&A Becoming a

DIGITALBusiness Partner New skills needed in the workplace for today’s digital world

VIVEK SAXENA

40 I AFP Exchange Spring 2019 ew skills needed in the workplace for change at light speed. Organizations need more today’s digital world may seem obvious to predictive and prescriptive capabilities. many. However, some financial planning • Inability to forecast risk: The world is becoming Nand analysis teams still have some catching up to harder to predict. As political, economic, and do. FP&A needs to improve its digital skills to make technology developments create realities nobody finance greater than the sum of its parts. could expect, companies are struggling to prepare Every second that you spend reading this, Google for new risks and the potential impact on growth, is answering more than 40,000 search queries, revenues, and overall performance. harnessing the power of two billion people. The • Failing to provide the right tools: While most search engine connects what users want with what of us readily connect digitally in our private lives, they choose, producing a body of information that is workplaces have been slow to take advantage of infinitely greater than the sum of its parts. the opportunities from voice, mobility, or advanced The analogy holds true for finance, specifically technology. Few have the infrastructure or functions like FP&A and enterprise performance applications that provide the real-time, prescriptive management (EPM). To make finance greater insights needed to act quickly. than the sum of its parts, we need to make similar connections. For example, to become a true business Filling the information gaps partner we must link: The best finance teams use digital advancements to • An organization’s vision with finance’s role in fill the gaps between the information business teams that vision want, what finance delivers, and what actions are • Execution speed with capacity and quality achievable. There are four key ways to achieve this. • How insight is consumed and acted upon. Focus only on those things that are important to the For many organizations, gaps still exist on all enterprise. As such, it’s essential for organizations to three fronts. But new skills and technologies can constantly refresh the leading and lagging indicators change finance and EPM capabilities for the better. they rely on. An unwillingness to change and a lack of As this article outlines, they can provide better, faster scale contributes to the huge volumes of information insights that result in solid strategic decisions. that can paralyze decision makers. Focusing on what is truly important drives action. What causes the disconnect? Harness large amounts of structured and Before finance can fully connect with the business, unstructured data on customers, finance, and it faces four common challenges: operations. Digital tools handle it all with much less • The data deluge: Is your data a strategic asset? time and effort, empowering organizations to make Data is no longer a competitive differentiator predictive decisions. One aircraft manufacturer, for for most companies, given how much of it example, uses the internet of things and sensors on they create and bring in. About 80 percent of aircraft to capture data in real time. The result: fewer it is unstructured in the form of emails, social grounded aircraft and operational costs cut by up to media ‘likes’, call scripts, news, audio, etc. As 40 percent. a consequence, finance teams are drowning in Use artificial intelligence (AI) to turn analytics data instead of using it to drive action. into insights. Progress in computing and AI has • Lack of insight: “I’ve noticed that when the significantly improved the accuracy of analytics- anecdotes and the data disagree, the anecdotes driven predictions. Our third-party risk management are usually right,” Amazon CEO Jeff Bezos solution, for example, analyzes vendors’ past recently said at in a recent discussion at the behavior and patterns to predict how they will act and Forum on Leadership at the Bush Center. Trend recommend whether companies should use them analyses and other descriptive analyses don’t help again. That has resulted in fewer compliance issues in today’s dynamic environment where scenarios and more robust supply chains for global firms.

www.AFPonline.org AFP Exchange I 41 FP&A continued

Figure 1: As technology takes on left-brain activities, EPM becomes a better business partner

Logical Creativity

Robots Sequential Imagination Data Scientist

Report Generation Risk Management

Financial Analyst Rational Intuition Behavioral Scientist Commentary Writing Business Analytical Visualization Strategists Financial Modeler Business Reporting Language Feelings Partnering Helpdesk Innovation

Computational Non Verbal

Facts Rhythm

Source: Genpact.

Using apps to drive user experience and action: A data scientists, chief economists, statisticians, and consumer packaged goods company has improved user even anthropologists. experiences with an app that quickly connects the right • EPM centers of excellence will become more cost-center analytics to the right cost owners in time to specialized focusing on tax, risk, compliance, drive the right action. analytics, technology, and more.

New skills needed The differentiator: Maximizing human and digital skills While technology is one part of the solution, finance The widespread adoption of digital technologies will teams need broader business acumen to become true free up people to do what they do best—activities such as business partners. There are a number of trends we expect reasoning, planning, creativity, and problem-solving. That’s to see over the next four to five years that could influence where we have a clear advantage over machines. whether they get there: With the right blend of skills—across both humans and • The digital workforce will take on left-brain activities machinea—EPM will enable better business partnering (see figure 1). by eliminating the gaps between the information desired, • Talent will become more adaptable and mobile, and delivered and actioned. The result is a hybrid workforce that the gig economy will change the shape of finance. helps businesses make faster, more informed and accurate • Finance teams will develop new capabilities: strategic decisions—a new source of competitive advantage. - New skills to supervise robots and improve AI, for example Vivek Saxena is Global Record to Report Leader, Genpact. He - Specialists will emerge in EPM: cash or risk czars, is based in New Delhi, India.

42 I AFP Exchange Spring 2019 Got questions…?

What is the most efficient and cost effective way to import bank data? We have to manage over 140 bank accounts.

Who can help me to identify the best way to create a model for forecasting different currencies in Emerging markets?

Your peers have answers. Visit collaborate.afponline.org to get your questions answered.

AFP, Association for Financial Professionals and the AFP logo are registered trademarks of the Association for Financial Professionals. © 2/19

MBSP-19_AFPEx_FullPgAd_Spring_2.indd 1 2/12/19 3:33 PM AFP 2018 FINDING ANDREW DEICHLER COMMON SOLUTIONS Treasury and finance professionals gathered for the Industry Roundtables at AFP 2018

“After just a few questions, everybody knows we’re in the same boat. We’re looking at the same problems and looking for the same solutions that we can implement in our respective organizations and make them work for us individually.”

44 I AFP Exchange Spring 2019 or nearly a decade, treasury and finance professionals have gathered for the Industry Roundtables at AFP’s annual conference. The roundtables, sponsored by Fifth Third FBank, provide practitioners with a forum to discuss key challenges they face in their respective industries, including retail, banking, energy and utilities, government, healthcare, education and non-governmental organizations, insurance and manufacturing. Fully 471 practitioners attended this year’s event.

Education and Non-Governmental Organizations Treasury management system (TMS) selection Over 40 practitioners attended the Education and cash forecasting were two major topics of and Non-Governmental Organizations (NGOs) discussion. “A lot of people have not [purchased] roundtable. Denise Laussade, CTP, director of the TMS, so they were really interested in finding out office of treasury operations for Purdue University, about the systems,” Straw said. “And a lot of people facilitated the roundtable, noting that while attendees are frustrated in their ability to forecast cash—not hailed from institutions and organizations of many just cash flow, but FX as well.” different sizes, their challenges are relatively similar. It likely comes as no surprise that repatriated “After just a few questions, everybody knows we’re earnings were also discussed at length in the in the same boat,” she said. “We’re looking at the same manufacturing roundtable. “Cash repatriation is a big problems and looking for the same solutions that we deal because everybody is taking money out of these can implement in our respective organizations and stranded countries, and now we’re looking at liquidity make them work for us individually.” needs in all of those different countries,” Straw said. One key issue that many attendees are struggling As for solutions to these issues, Straw admitted with is how to do business abroad. Many academic that unfortunately, manufacturers across the board institutions and NGOs operate in countries with very had trouble coming up with a panacea. “Cash unique payment issues that need resolved, Laussade forecasting was the biggest frustration and no one explained. “How do you do payments in Africa? had a really good answer for it,” she said. Where do you go? There aren’t a lot of established banks,” she said. “Some of our schools mentioned Common problems and solutions that they were having difficulties making those Straw has attended multiple manufacturing payments. So people offered the solutions that have roundtables and she noted that many of the same worked for their institutions or NGOs—whether it’s issues are discussed year after year. Even if no mobile or cash payments.” perfect solution emerges, practitioners in the Another hot topic of discussion was what manufacturing sector return each year to explore institutions and NGOs are doing with their potential new ways to solve their common problems. intermediate investment portfolios in the current Likewise, Laussade has been coming to the rising-rate environment. “So many of us have taken a roundtables for a number of years and has seen many beating in fixed income instruments,” Laussade said. of the same issues come up regularly, though some “And what do you do? Do you liquidate and take the have grown in importance over time. “Fraud is different loss? Do you hold on? Do you change your strategy? level of interest to us these days; it wasn’t as big in the That discussion was something very relevant to past,” she said. “We’re also looking for new payments schools; many of us have operating cash pools or mechanisms; that’s something that keeps coming endowments that need active management.” back, and that’s because the technology continues to change. So how do we stay up with technology as Manufacturing we try to solve the issues for our students, our human Elizabeth Straw, treasury manager for electric motor subjects or our faculty? How do we get payments manufacturer Regal-Beloit, led the manufacturing made to our suppliers? How do we receive payments roundtable, which saw a turnout of nearly 90 from our international students? All of those problems practitioners. She noted that the roundtable was able to kind of ebb and flow. Today, they’re important. They connect different types of manufacturing groups that might subside for a year or two, and then they’ll be were working on the same types of projects. important again in the future.”

www.AFPonline.org AFP Exchange I 45 Pardon the Interruption Reb Rebele explains why treasury and finance can’t get its work done

IRA APFEL

“You could just hear people hy is it so hard to collaborate in today’s workplace? complaining about meetings Reb Rebele explains why FP&A workers can’t get or talking about their in- their work done. box being overloaded. WIt’s easier than ever to connect with your co-workers and And starting to connect theoretically get things done. You’ve got email, text, private messaging, conference calling, and more. the dots that hey, these So why, in reality, is it so challenging to collaborate at work? are all different flavors of Robert “Reb” Rebele calls it the paradox of the connected workforce. collaborative activities, We are so connected yet at the same time so disconnected, he argues right? It’s like people are in and adds that employees are suffering from collaborative overload. meetings or responding to What can finance executives do about all this? Rebele will offer his advice when he speaks at FinNext 2019, March 17-19, in Las Vegas. emails. But it’s all part of the A researcher for Wharton People Analytics who teaches in the Master ground level work that goes of Applied Positive Psychology program at the University of Pennsylvania, into collaboration and what it Rebele recently was a guest on AFP Conversations podcast. Here is an means to work together.” excerpt of Rebele’s conversation with host Ira Apfel:

46 I AFP Exchange Spring 2019 Ira Apfel: How might a CFO or a FP&A executive emails. But it’s all part of the like just ground level work check to see if his or her workplace has a strong that goes into collaboration and what it means to work collaborative culture? together. I heard some people including ourselves talking Reb Rebele: I think if you’re at that level of the about, “Hey, this is a challenge.” that led us to think, organization, one of the key things to think about is what “Yeah, there is an issue here.” are your sources of data on the people and collaboration Highly collaborative employees then feel burnt out by side. A lot of CEOs or CFOs could tell you a lot about all of these collaborative demands, by all of these help their financial metrics and the suite of financial metrics requests and end up leaving the organization or staying that they could look to could tell them whether things and being less effective and potentially grumpier and are going well or not. Do you have the same range therefore spreading ill will among colleagues. That’s and quality of metrics on the people side and the actually a much more substantial cost I think than we collaboration side? do you actually know at an individual necessarily would’ve hypothesized going in. employee level who’s performing well and who’s not? It’s actually a less common thing than you would expect. Ira Apfel: What’s the first step a finance executive Organizations have all sorts of productivity metrics should take to address this problem? in a lot of cases. But they’re not always actually that Reb Rebele: If you’re in a leadership role, I would start useful in identifying which individuals or in the context by looking at your data infrastructure on the people side of collaboration, maybe even more importantly, which of things. If you invest in a robust data infrastructure on teams and groups are working most effectively. people management and culture and collaboration issues, So part of it is performance and productivity. But then you’ll set yourself up to be able to ask lots more questions part of it is engagement, motivation, attention, and energy. going forward. As it stands, if you don’t have reliable, Some of the low hanging fruit in terms of where to collect easy to access data in terms of how engaged people are, some of this data, we talked before about communications where their time and attention is going, what the sort of meta data, that’s one place where you got some existing productivity and output benefits are from that, then even if data that you could actually start to analyze. Things you come up with an answer, it’s going to be an educated like 360 or network surveys within organizations are guess at best. And sometimes that’s all you have to work really helpful. So getting employees to talk about who with. But the more you can invest in data infrastructure, they actually interact with to tell you here are the people the better off you’ll be in the long run. I’m actually interacting with day to day. And you’ll be At sort of lower levels and even at the individual employee surprised at how often that doesn’t map onto any kind of level, I think the one piece of advice is to just start paying organizational chart. And you’ll be surprised at how often attention to where your time, attention, and energy is some of the people who you think are your star employees going. There’s an exercise that turns into a sort of structure are far more isolated than you would necessarily want activity that you can do in like an hour and a half called them to be in an ideal world once you start to ask them the job crafting exercise where you just sort of map out who are you actually connecting with and how helpful are using effectively post it notes to say, “Here’s where my you all being to one another. time, attention, and energy’s going right now. Here’s what I’m good at, what I value, what sustains my energy and Ira Apfel: When you started to do research on productivity,” and then you sort of recraft your existing this topic, did you hypothesize that there was job to better align with those things and look for what are a problem, or were you surprised at the level of the small changes that I can make that will make a big dysfunctionality? difference. Even something like doing that for an hour/hour Reb Rebele: I’d say yes! I think we heard a lot about and a half, or just like paying attention as you go about your this from talking to lots of people as they went about day and saying, “Could I be a little bit more efficient here? their day to day work lives. You could just hear people Can I do this in a way that’s actually less efficient but more complaining about meetings or talking about their in- productive and more enjoyable?” That reflective attitude will box being overloaded. And starting to connect the dots help you identify places where you can make some changes. that hey, these are all different flavors of collaborative activities, right? It just sounds like communication, Hear the entire conversation at right? It’s like people are in meetings or responding to www.AFPonline.org/Conversations.

www.AFPonline.org AFP Exchange I 47 EMERGING TECHNOLOGIES

EYE on TOMOR ROW Blockchain anking and finance face intriguing challenges in the near future. As the world adopts more technology’s Btechnological innovation, navigating the minefield of new ideas will require increased agility. Blockchain will impact on the almost certainly play a significant role in these changes. How will blockchain-based financial tools fit into the future of treasury traditional understanding of finance? By itself, finance is an elusive concept to describe. From company to and finance company, finance can mean anything from liquid resources to a scientific study of funds and global trends. Yet one definition captures several elements worth exploring. ANDY FATELY Finance includes the circulation of money, the granting of credit, the making of investments and the provision of banking facilities. To a corporate treasury department, these are their collective charge, their raison d’etre. These qualifying factors appear to be fruitful ground for study and form a hypothesis of how blockchain may impact the financial sphere.

48 I AFP Exchange Spring 2019 TOMOR ROW Circulation of money Finally, Bitcoin’s greatest failure is in the primary function Of the four features, money is the one that has changed of money—its ability to act as a unit of account. Regardless most due to advances in technology. It is easy to point to the of how much crypto enthusiasts discuss their holdings, advent of cryptocurrencies and describe them as the ‘new’ they are always converted into fiat currency amounts. Those money. But it would also be premature to do so. Money has assets are described as X dollars worth of Bitcoin, not X a very specific definition; it must serve as a unit of account, Bitcoins. By this qualifying factor, it would be incorrect to a medium of exchange and finally, a store of value. define cryptocurrencies as money. Using Bitcoin as an example, and working in reverse, a Traditional money, however, has changed a great cryptocurrency might be considered a store of value, albeit deal over time. Moving from paper currency to digital an imperfect one. Based on Bitcoin’s demonstrated volatility, representations has enabled payments to be made quickly no one would consider the coins a safe store of value. As to and more efficiently with less risk of theft. As well, allocation a medium of exchange, Bitcoin does serve that purpose in and segregation of funds is far more timely and secure. very limited circumstances. In nations where the economy There is every reason to believe that blockchain technology is has collapsed, e.g., Venezuela, and the local fiat currency has going to continue that trend, reducing the time lags from hours essentially become worthless, citizens who are able have been and days common today, to seconds or minutes in the future. willing to use Bitcoin as money. Yet that is the exception, not It’s even viable that there will be an eventual tokenization of the rule, and there is no indication that mainstream economic fiat currencies by national central banks, which will require activity is moving toward Bitcoin acceptance. blockchain, though admittedly that is still a hazy prospect.

www.AFPonline.org AFP Exchange I 49 EMERGING TECHNOLOGIES continued

Blockchain in corporate treasury Looking ahead, blockchain is ripe Looking ahead, there are three significant ways to enhance the speed of transaction blockchain technology can impact corporate treasury: settlement, reducing errors and saving • Cash management: Blockchain has the power to significant costs in the operational disrupt many aspects of this process; in investments, by reducing the time and resources necessary to aspects of investment. It is the perfect insure investments are made when and where desired vehicle to change settlement timelines, with limited human intervention; and in payments, which are currently more appropriate for by enabling a more efficient payment systems for paper documents than for the digitized corporates, whether to enable vendor payments or move world in which we live. cash internally. • Credit: One of the trends in the wake of the financial crisis in 2008 was the significant buildup of cash on Granting of credit and the provision of banking facilities corporate balance sheets. Corporate treasurers are It is hard to separate these two features of finance as, tasked with the offsetting goals of highest returns historically, banks have been the primary grantors of credit with least risk. The development of blockchain-based to borrowers. In fact, lending money is half their mission systems that enable P2P lending may be exactly what is statement, which is generally defined as ‘taking deposits necessary to achieve that dual mandate. and making loans’. There has been greater caution in • Money: Banks are developing highly specific products the utilization of new technologies in the credit granting on a private blockchain designed to represent specific business, with arguably credit scores and agency ratings the values of fiat currencies and not to have their own most recent changes. underlying market. For treasurers, this means it is A fair question is, which technology will have the greatest critical that better cash management information is impact going forward? Of the three natural candidates, available internally, as well as proper investment and artificial intelligence (AI), machine learning (ML) and payment guidelines are put in place for the future. The blockchain, right now blockchain is the only one getting benefit will be reduced risk of non-market loss. serious consideration in this area. A survey of bank announcements1 demonstrates that AI and ML are seen as An evolving process having the most potential to impact customer service or risk We have already witnessed significant changes in the management. Credit allocation is not even a consideration. investment process due to technological change. Whether On the other hand, because of its inherent characteristics, discussing the remarkable reduction in equity brokerage blockchain is likely to have a much different, and more fees, the advent of ETFs and algorithmic trading, or the disruptive, role in the granting of credit in the future. It use of AI in the investment decision process (think robo- has the ability to lead to the democratization of lending by advisors), this is the part of finance that has already expanding the nascent peer-to-peer (P2P) lending networks changed the most. That doesn’t mean we have reached an that already exist, as well as enhancing banks’ ability to end state, however. improve their lending process. Looking ahead, blockchain is ripe to enhance the speed P2P lending is already gaining traction with numerous of transaction settlement, reducing errors and saving companies competing in the space. However, at this time, significant costs in the operational aspects of investment. It it remains focused on personal and small business loans. is the perfect vehicle to change settlement timelines, which It is also an extremely small slice of the overall lending are currently more appropriate for paper documents than for market. The latest estimates indicate that as of 2015, the the digitized world in which we live. total global P2P loan books were ~$64 billion2 and an Finance as we know it today will continue to evolve as analysis by Statista forecast that to grow to $1 trillion by technology improves. Blockchain, in particular, is certain 2025.3 In contrast, according to the Bank for International to be a major element that will shape and direct the finance Settlements (BIS), as of the end of Q1 2018, total bank credit industry for many years to come. to nonfinancial counterparties totaled $69.9 trillion across all currencies!4 So at this stage, P2P lending is still a tiny fraction of the loan market. Andy Fately is Chief Strategist, 9th Gear Technologies.

50 I AFP Exchange Spring 2019 BLOCKCHAIN

NEW on the BLOCK What's new in blockchain applications for treasury and finance

DR. SEAN STEIN SMITH AND ROBERTO CRUZ JR., CTP

f 2017 was the year blockchain burst into the mainstream, 2018 could best be categorized as the trough of disillusionment as many once promising projects were either shelved Ior relegated to pilot phases. The truth about blockchain and finance applications lies somewhere in between, with institutional fund flows and enterprise-ready applications steadily entering the marketplace. While it is true that the majority of investment and interest in the cryptocurrency and blockchain space in the early stages was concentrated among individual investors, institutional interest continues to increase.

www.AFPonline.org AFP Exchange I 51 BLOCKCHAIN continued

process that renders traditional bitcoin processing unwieldy for enterprise scaling while still maintaining the security and peer-to-peer Cryptocurrencies without the price nature of blockchain itself. Issues remain with securing and attesting to the data contained volatility (up or down) represent a potential on these different chains, but the development new asset class for both investment of faster and more efficient blockchain-based and utilization as collateral or other payment systems is a promising development. underpinning for financing arrangements. Tokenization Demonstrated most notably by the debut of Currency.com, a European trading platform In no order, then, here are several using tokenized securities, the concept developments treasury and finance professionals of tokenization represents an interesting should watch: development. Underpinning tokenization is the desire to connect blockchain with physical Stablecoins assets or other real-world items or pieces of Whether it is the launch of an institutional information. Tokenization allows the transfer trading and investing platform at Fidelity, and representation of ownership of physical the granting of custodial banking licenses to assets using a blockchain to secure and organizations like Coinbase, or the proposed underpin the history and evidence of ownership. 2019 revision of BitLicense requirements in New Tokenization offers several benefits for York, it is clear that the blockchain ecosystem is treasury and finance. First, the decentralized evolving toward an enterprise-driven space. In and distributed nature of blockchain itself addition to the work currently underway on the allows investment funds to be transferred and blockchain side, the introduction and refinement handled by individuals and institutions on a of stablecoins represents a trend that finance global basis, bypassing the need for dealing with and treasury professionals should be aware of for different legal and geographic issues. Second, enterprise adoption. the ability to invest in partial ownership of Cryptocurrencies without the price volatility assets on a global basis allows the funds under (up or down) represent a potential new asset management to be more diversified since the class for both investment and utilization as assets open for investment are more numerous. collateral or other underpinning for financing This increased ability to invest in a truly global arrangements. While the cryptocurrency and diversified portfolio also allows organization market, both from a product as well as a to unlock liquidity of physical assets that may regulatory perspective, remains an emerging have otherwise remain underutilized. Third, space the development of products that fills a the reduced costs and organizational friction need of institutional players is encouraging for associated with blockchain are clearly associated organizations seeking enterprise ready solutions. with the tokenization of physical assets.

Lightning Network More treasury applications Two other blockchain-based applications also There has seen an increase in the buzz bear watching. The Lightning Network, although surrounding blockchain technology and its based on bitcoin, has broader implications. This potential applications for the financial world in network utilizes concepts such as sidechains general and the treasury function specifically. and payment channels to use blockchain to Various blockchain options have resulted in proof- anchor the opening and ending balances related of-concept consensus methodologies being used to transactions. Such an approach allows in applications such as private placement note counterparties to sidestep the costly and time- issuances, letters of credit, know your customer, consuming proof-of-work transaction validation and transactional payment processing.

52 I AFP Exchange Spring 2019 Figure 1 illustrates the benefits and savings possible via future blockchain integration with treasury processes:

Standby and Trade Letters of Credit

80,000 75,000 250,000 233,500 70,000 200,000 60,000 56,250

50,000 150,000 40,000 37,500 116,750 100,000 30,000

20,000 50,000 10,000 38,917

0 0 1 2 3 4 5 6 7 8 9 10 11 12 6 7 8 9 10 12

——­ 6 months —— 9 months —— 12 months ——­ 6 —— 7 ——8 ——9 —— 10 ——11 ——12

If an LOC is issued for six month but the paperwork The impact of receiving payments from a Blockchain is not received back for an additional three or six issued Trade LOC could potentially reduce the time of months, you can see how the cost increaases 50% paperwork confirmation and acceptance by weeks if not -100% vs immediate release from Blockchain. months. Illustrated above is the impact on a 6 month trade LOC being paid immediately vs 3 and 6 monts later to a company with CoC of 4.67%. Source: Stein Smith and Cruz.

KYC. Blockchain offers this opportunity for Trade Finance: Last year saw the first trade further streamlining and resource optimization finance transaction using blockchain technology. by managing the information sharing This is the next step in replacing this paper- between all blockchain network members dominated trade business. simultaneously in real time. The benefits Other blockchain introductions include: increase when the information is utilized in • World Bank issuing bonds exclusively repetitive processes such as initial account set- through blockchain in conjunction with the up, account updates including signatories, and Commonwealth Bank of Australia (CBA) annual reviews. dubbed “Bondi” Letter of credit (LOC) processing. • Contract creation and payment by Aeternity Negotiations that occur during the initial set-up • Replacing current processing for Australia may last longer than one month. A blockchain- equity Transactions of the Australian based process can handle these transactions Securities Exchange (ASE) by 2020 and updates on a real-time basis and automate • The first structured product to be registered, the downstream action items. The backend cleared, and settled using distributed ledger completion provides further benefits and technology was created and implemented by opportunities for treasury. Another challenge Marex Solutions. is liability associated with outstanding LOCs. Treasury, as the department closest to the For example, a $10-million LOC at 75 bps fee financial institutions building many of these closing immediately versus a four-week delay blockchain systems, needs to take the lead and will result in hard cost savings of more than identify the KPIs that are impacted and how they $6,000. This also works on the payment side for align with the overall business plan. the beneficiary/recipient organization. Dr. Sean Stein Smith, CPA, is an assistant professor at the City University The payment will be released immediately of New York, and a member of the advisory board of the Wall Street once the requirements are satisfied resulting in Blockchain Alliance. Roberto Cruz Jr., CTP, is the Treasury Director for the improved cashflow. North American Parent Subsidiary of an international company.

www.AFPonline.org AFP Exchange I 53 ARTIFICIAL INTELLIGENCE The RACE On

54 I AFP Exchange Spring 2019 JEFF ELLIS AND RYAN DRIMALLA isOn Implementing strategic AI to comply with the new lease accounting standard

he long-anticipated effective date for updates to lease accounting standards (January 1, 2019 for companies applying TIFRS 16 and public companies applying ASC 842) has come and gone. Still, many companies with large volumes of leases are scrambling for solutions to help them identify and analyze lease data quickly and accurately. To address the lease analysis requirements under the new standards, organizations with sizeable lease volumes will likely need to rely on a combination of expertise and software. Automated contract extraction software (powered by machine learning or artificial intelligence) can provide a substantial lift to an organization’s lease analysis efforts. However, those tools have limitations when it comes to addressing the complexities of accounting standards and cannot fully replace the need for human accounting expertise and contract analysis. Teams responsible for adopting the new standards should not overlook the time required to complete these activities and implement appropriate technology to support them in advance of the deadline. Lease analysis as part of implementation of the new standards is comprised of several processes including: • Initial identification of all lease agreements and contracts potentially containing leases (to the extent these documents are not already identified by internal lease or contract management systems); • Abstraction or codification of basic leasing information necessary to understand obligations and input the data to lease accounting systems; • Determination of how to implement at the lease portfolio level (electing the practical expedient instead of accounting for individual leases); • Separation of lease and non-lease components for separate accounting; and • Identification of embedded leases in goods and services contracts. These processes can be time-consuming and complex. While some can be streamlined through targeted application of contract extraction software, others require more significant expert (i.e., human) attention.

www.AFPonline.org AFP Exchange I 55 ARTIFICIAL INTELLIGENCE continued

In or Out To effectively locate embedded leases, extraction software Most contract extraction software tools provide several could require close to 100 hours of training depending on “out of the box” clauses that identify and extract some the complexity of the contract set. The process of training relevant lease information (e.g. contract title, agreement the software requires accounting experts to provide type, parties, effective and commencement dates, term, guidance on what elements of a contract are important to termination, general pricing terms). These core clause the determination of whether the arrangement could contain extractions can be effective for identifying leasing contracts a lease, technologists to manage the machine learning, across a company’s contract or document population and both to engage in the iterative refinement of the and providing basic data required to record leases as part extraction logic. By deploying an implementation strategy of adopting the new standards. For companies starting that coordinates accounting expertise and technology, the lease identification and analysis effort from scratch companies can ease the adoption of the new standard. or working from relatively immature lease or contract Examples of these coordinated efforts include the management systems, this assist from automation can spare following: hundreds of manhours. • To train the software to capture more nuanced However, out of the box, these tools are mostly trained clauses and content, accounting experts can provide to extract terms relevant for lease administration and may “seed” interpretations and guide the technology not be adequate to capture all provisions needed to account experts in developing a sophisticated machine- for the lease properly. The types of information that may learning training program. be overlooked without manual analysis include purchase options, fiscal funding clauses, residual guarantees, • In instances when the software is unable to adequately deposits, lease incentives, services that could give rise to capture certain extractions, proficient accounting non-lease components and supplier substitution rights. expertise ensures all key information is identified in the Further, companies that did not previously assess lease for appropriate analysis. whether their agreements for goods or services contained • To transform verbatim extractions into usable data or leases, should take a measured approach when using abstractions, accounting expertise can be applied to contract extraction software to facilitate the review of understand the adoption requirements and data models agreements entered into or modified for periods beginning utilized by lease accounting systems. Technology after May 28, 2003 (the effective date of the guidance for expertise can provide data structuring and mapping determining whether an arrangement contained a lease support to bridge the lease analysis with adoption under U.S. GAAP). Because the guidance in the existing practices and downstream systems. lease standards requires extensive judgment to determine whether an arrangement involving the use of property, • When warranted by large lease volumes, experience plant, or equipment not located on the customer’s premises in delivering tech-enabled managed contract review, or being operated by the customer contained a lease, out guided by protocols developed by accounting experts, of the box tools require expert-directed training to locate can be leveraged to efficiently and accurately harvest content indicative of embedded leases; those tools should relevant data for implementation. not be relied upon, without an additional layer of manual As companies face lease volumes that overburden their interpretation, to conclusively identify embedded leases. resources, the most efficient strategy for tackling lease Additionally, when dealing with relevant contract clauses analysis is to combine automated contract extraction tools and content, software can only identify and extract the with accounting and technology expertise. The right team verbatim text from the document—often entire and numerous of experts can facilitate and expedite implementation and paragraphs. While this eases the transition to the new give corporations the best chance of accomplishing and standards, a company will still need to either input the maintaining compliance. extracted information into the lease accounting software or spreadsheet or convert the extractions to a structured data format for upload to the lease accounting software. Further, Jeff Ellis is a Senior Managing Director at FTI Consulting. He the software used to extract information from the lease is a member of the Forensic & Litigation Consulting segment. agreement cannot automatically generate an abstract based on Ryan Drimalla, Esq., leads operations and solution development interpretations of, or make judgments about, that information, for FTI Technology’s Contract Intelligence service. He focuses such as whether the exercise of a renewal or purchase option on enterprise contracting requirements related to regulatory, was reasonably assured at the inception of the lease. compliance, risk and corporate transactions.

56 I AFP Exchange Spring 2019 OVER 35,000 PROFESSIONALS HAVE ALREADY EARNED THEIR CTP CREDENTIAL.

SO WHAT ARE YOU WAITING FOR? Gain instant credibility and recognition among your treasury peers. Become a Certified Treasury Professional.

Apply by March 22 to Save $100. Visit www.CTPcert.org CTP, Certified Treasury Professional and the CTP logo are registered trademarks of the of the trademarks registered CTP logo are and the Professional Treasury Certified CTP, © 8/18 Financial Professionals. for Association DECEMBER 2018B – JANUARY 2019 CTPs

Tony Avila, CTP Michele Bogardus, CTP AFP would like to recognize all of the newly designated CTPs Treasury Analyst Financial Analyst from the 2018B (December 2018 – January 2019) testing window. Aecom City of Manchester NH San Gabriel, CA Manchester, NH When working in treasury and finance, achieving the Certified UNITED STATES UNITED STATES

Treasury Professional designation denotes credibility in your Badawi Badawi Shahin, CTP Briana Booker, CTP profession. These are professionals who have demonstrated Assistant Manager Treasury Specialist Arab Bank Academy Sports + Outdoors the required knowledge, skills and abilities to meet this global Amman Katy, TX standard of excellence. JORDAN UNITED STATES The following financial professionals have successfully completed Sean Baenziger, CTP Caroline Bove, CTP Sr. Financial Business Analyst First Financial Bank the rigorous examination requirements to earn their CTP designation. Amazon.com West Chester, OH They should be congratulated for their achievement and praised for Renton, WA UNITED STATES UNITED STATES reaching this level of finance professionalism. William Boyle, CTP Coreen Bank, CTP CIBC Sr. Director of Tax & Treasury Halifax, NS PKC Group CANADA CERTIFIED TREASURY Nathan Albers, CTP Tyler Anaya, CTP Plymouth, MI PROFESSIONAL (CTP) Treasury Management Sale Treasury Professional UNITED STATES Megan Boyles, CTP PNC Bank CoreLogic VP Shahab Abidi, CTP Troy, MI Irvine, CA Nabani Banks, CTP SunTrust Senior Consultant UNITED STATES UNITED STATES Senior Treasury Analyst Atlanta, GA FIS Rollins, Inc. UNITED STATES Morton Grove, IL Abdulla AlBurshaid, CTP Brett Anderson, CTP Atlanta, GA UNITED STATES Assistant Manager Director UNITED STATES James Brand, CTP National Bank of Bahrain Huron Consulting Group Analyst Yasmine Aboulkheir, CTP Isa Town Chicago, IL Arun Batra, CTP PNC Bank Treasury Section Head BAHRAIN UNITED STATES Sr Treasury Manager New York, NY EG Bank Agilent Technologies, Inc. UNITED STATES Giza Shady Alian, CTP Evan Anderson, CTP San Jose, CA EGYPT Treasury Manager Corporate Cash Manager UNITED STATES Elizabeth Bravacos, CTP Schneider Electric Doterra International LLC Treasury Management Officer Darren Abrams, CTP Cairo Pleasant Grove, UT Amine Bega, CTP PNC Bank Director | Corporate Banking EGYPT UNITED STATES HSBC Philadelphia, PA Regions Bank Montreal, QC UNITED STATES Dallas, TX Zeina Allaf, CTP John Andres, Jr., CTP CANADA UNITED STATES Senior Process Analyst AVP - Treasury Marsha Brenton, CTP LCBO Ditech Financial LLC Scott Beilharz, CTP Cash Manager Amanda Adams, CTP Toronto, ON Mendota Heights, MN Vice President CIBC SunTrust CANADA UNITED STATES Erie Indemnity Company Amherst, NS Baltimore, MD Erie, PA CANADA UNITED STATES Jeffrey Allen, CTP Vasyl Andrishak, CTP UNITED STATES Commercial Banking Manager Treasury Manager, EMEA Jared Brewster, CTP John Adams, FP&A, CTP Regions Bank CHS Europe Sarl John Benoit, CTP Assistant Vice President Regional Manager - Finance Knoxville, TN Kyiv CVP, Tax and Treasury Chatham, NJ Oracle UNITED STATES UKRAINE PAREXEL International UNITED STATES Minneapolis, MN Billerica, MA UNITED STATES Nuha Alminqash, CTP Zachary Anello, CTP UNITED STATES Jarryd Briggs, CTP Treasury Analyst Global Treasury Analyst III Assistant Treasurer Marissa Adams, CTP Arasco Blackbaud Wesley Benson, CTP Umpqua Bank Director, Corporate Finance Riyadh Mt Pleasant, SC Senior Financial Analyst Portland, OR & Treasury SAUDI ARABIA UNITED STATES Altura Credit Union UNITED STATES J.D. Irving, Limited Riverside, CA Grand Bay-Westfield, NB Hesham Alosail, CTP Kim Huat Lionel Ang, CTP UNITED STATES David Blair Brown, CTP CANADA Relationship Manager, Senior Treasury Analyst Senior Manager & Team Leader Corporate Banking Toshiba Alicia Berry, CTP CIBC Shashank Agarwal, CTP The Saudi Investment Bank Singapore Regional Vice President, Trea- Halifax, NS Manager Riyadh SINGAPORE sury Management CANADA PwC SAUDI ARABIA German American Bancorp, Inc. Gurgaon, Haryana Arifuzzaman Apu, CTP Madison, IN Jennifer Brown, CTP INDIA Nayef Alsmairi, CTP Treasury Financial Analyst UNITED STATES Assistant Director of Cash Treasury Specialist Toronto, ON Management Ahmed Ahmed, CTP EQUATE Petrochemical CANADA Ryan Betz, CTP University of Illinois Chief accountant Company K.S.C.C. Treasury Analyst Urbana, IL TQAQ Arabia Yarmouk Katie Armstrong, CTP Kimball Electronics Inc UNITED STATES Cairo KUWAIT Manager, Treasury Solutions Jasper, IN EGYPT Royal Bank of Canada UNITED STATES Michael Brown, CTP Diana Alvarez, CTP Toronto, ON Manager Omobolanle Akomolafe, CTP Cash Management Sales Officer CANADA Khrystyna Bezkosta, CTP EY Treasury Analyst Popular Bank Senior Treasury Specialist Chicago, IL Cameco Corporation Bayside, NY Shehryar Arshad, CTP Denso International America Inc UNITED STATES Saskatoon, SK UNITED STATES Head, Financial Market Sales Southfield, MI CANADA Standard Chartered Bank UNITED STATES Frank Buda, CTP Raquel Alvarez Mateos, CTP Doha Sales Manager, Global Liquidity Cagri Akova, CTP Cash Manager North America QATAR Andrew Blair, CTP and Cash Management Treasury Supervisor Hexion Inc. Treasury Consultant HSBC Star Rafineri A.S. New Albany, OH Sebastien Auclair, CTP G Treasury SS, LLC Maple, ON Aliaga UNITED STATES Director Corporate Sales & Chicago, IL CANADA TURKEY Structuring UNITED STATES Louri Amador, CTP Banque de Montreal Mark Bumann, CTP Jose Alba, CTP Sr. Treasury Manager St-Hubert, QC Husein Bochor, CTP Corporate Treasury Analyst Global Treasury Solutions Officer PVH Corp. CANADA Manager, Treasury Risk Management Eaton Vance Corp. Bank of America Merrill Lynch East Brunswick, NJ Maple Leaf Foods Revere, MA Chicago, IL UNITED STATES Toronto, ON UNITED STATES UNITED STATES CANADA

58 I AFP Exchange Spring 2019 Carley Burns, CTP Mrudul Chillarige, CTP Brad Dale, CTP James Edwards, CTP Dorota Foley, CTP Sr. Product Manager Solution Advisor Treasury Analyst Senior Analyst Cash Manager BBVA Compass Deloitte Bayer Corporation First Tennessee Bank Lyondell Chemical Co Birmingham, AL Hyderabad, Andhra Pradesh Pittsburgh, PA Memphis, TN Pearland, TX UNITED STATES INDIA UNITED STATES UNITED STATES UNITED STATES

Patricia Bush, CTP Darrell Chinnery, CTP John Davies, CTP Takayuki Eguchi, CTP Matthew Fong, CTP Content Development Manager Treasury Management Specialist Treasury Analyst Senior Treasury Analyst Treasury Management Officer Fiserv Solutions, LLC Happy State Bank Western Union Business Solutions Freescale Semiconductor, Inc. J.P. Morgan Chase Lawrenceville, GA Carrollton, TX Peterborough Phoenix, AZ Brooklyn, NY UNITED STATES UNITED STATES UNITED KINGDOM UNITED STATES UNITED STATES

Emily Byrd, CTP Daria Cho, CTP Tyler Davis, CTP Aly El Feky, CTP Linda Foun, CTP Treasury Analyst Mgr, Sales Enablement & Senior Treasury Analyst Manager, Group Treasury & Cor- Consulting Treasury Analyst Inspire Brands Servicing Coordination Micron Technology, Inc. porate Finance Management Raytheon Company Atlanta, GA RBC Royal Bank Boise, ID Abdul Latif Jameel Co. Ltd. Waltham, MA UNITED STATES Toronto, ON UNITED STATES Jeddah UNITED STATES CANADA SAUDI ARABIA Catherine Cantasano, CTP Pritpal Dayalal, CTP Lisa Francesca, CTP Senior Vice President, Treasurer Young Jae Cho, CTP Analyst Yasmine Elgamil, CTP Treasury Consultant W.P. Carey & Co., Inc. Treasury Manager Sumitomo Mitsui Banking Corp. Senior Treasury Analyst MassMutual Financial Group New York, NY LG Electronics Canada Br Electrolux Egypt for Home Springfield, MA UNITED STATES Englewood Cliffs, NJ Brampton, ON Appliances UNITED STATES UNITED STATES CANADA Cairo Hector Carrasquillo, CTP EGYPT Katherine Freedman, CTP Corporate Treasurer Charles Chuman, CTP Jarrid Dekovitch, CTP Sr. Treasury Analyst Keystone Foods VP of Revenue Senior Treasury Analyst Jed Ellis, CTP Lennar Corporation Ambler, PA CHD Expert Element Fleet Management Treasury Analyst Miramar, FL UNITED STATES Chicago, IL Corp Advanced Energy Industries Inc. UNITED STATES UNITED STATES Sparks, MD Fort Collins, CO Krista Carroll, CTP UNITED STATES UNITED STATES Daniel Furman, CTP Regions Bank Joseph Clark, Jr., CTP Senior Treasury Analyst Birmingham, AL Cash/Debt Analyst Ashley Desmond, CTP Emir Erkan, CTP Cummins Inc. UNITED STATES Huntsville Hospital System Cash Management Advisor Treasury Analyst Indianapolis, IN Huntsville, AL Northwest Bancshares, Inc. Adyen N.V. UNITED STATES Coral Cass, CTP UNITED STATES Williamsville, NY Amstelveen Staff - Global Treasury Services UNITED STATES NETHERLANDS Kyle Gaffaney, CTP EY Nick Clasen, CTP Treasury Analyst Charlotte, NC Cash Management Assistant Stacy Donohoe, CTP Paul Espanol, CTP The Mosaic Company UNITED STATES Ohnward Bancshares Inc Sr. Manager, Treasury Vienna, VA Plymouth, MN Fulton, IL bluebird bio, Inc. UNITED STATES UNITED STATES Graham Casselman, CTP UNITED STATES Waltham, MA Toronto, ON UNITED STATES Dionne Essie, CTP Bharathi Gajendran, CTP CANADA Damon Coakley, CTP Senior Treasury Analyst Senior Executive, Corporate Treasury Sales Consultant Matthew Doughty, CTP Oracle Corporation Treasury Robyne Chambers, CTP Citibank Financial Operations Supervisor Reno, NV Aster DM Healthcare Global Treasury Business Partner Oakland, CA Social Finance Inc. UNITED STATES Dubai Rio Tinto UNITED STATES Murray, UT UNITED ARAB EMIRATES Singapore UNITED STATES Justin Fanning, CTP SINGAPORE Cormac Conahan, CTP Director of Debt and Capital Timothy Gallagher, CTP Treasury Manager Arvind Dube, CTP Financing Assistant Director Treasury Victor Chan, CTP City of Boca Raton Treasury Finance Consultant FSU Operations Vice President Boca Raton, FL Arvind Dube Tallahassee, FL The Hartford Morgan Stanley UNITED STATES Gurgaon UNITED STATES Hartford, CT New York, NY INDIA UNITED STATES UNITED STATES Deborah Connell, CTP Matthew Ferguson, CTP Cash Manager Monte Dunlow, CTP Regions Bank Sean Gannon, CTP Dipesh Chandarana, CTP Driscoll International Financial Analyst Chattanooga, TN Senior Analyst Assistant Vice President Watsonville, CA Maersk Line, Limited UNITED STATES PFM Asset Management LLC Deutsche Bank UNITED STATES Norfolk, VA Winter Park, FL Jersey, NJ UNITED STATES Kristin Ferraro, CTP UNITED STATES UNITED STATES Julie Cook, CTP Director - Treasury Operations Treasury Management Jennifer Earyes, CTP Blackstone Julian Garbaccio, CTP Hee Chang, CTP Fifth Third Bank Director, Treasury Risk Mamaroneck, NY Director Treasury Management Specialist Cincinnati, OH Navient Corporation UNITED STATES Jersey City, NJ 1st Century Bank UNITED STATES Reston, VA UNITED STATES Los Angeles, CA UNITED STATES Kevin Finn, CTP UNITED STATES Aaron Cox, CTP Chicago, IL Lindsay Gentile, CTP Treasury Management Specialist Justin Ebert, CTP UNITED STATES Treasury Sales Associate Joon Chang, CTP Huntington Bank Treasury Analyst J.P. Morgan Treasury Relationship Manager- Columbus, OH PNC Bank Peter Fisher, CTP Seattle, WA Community Association Banking UNITED STATES Grand Rapids, MI Treasury Analyst UNITED STATES Washington Federal UNITED STATES Moody's Corporation Sammamish, WA Lori Mignon Crawford, CTP New York, NY Alok Ghai, CTP UNITED STATES Group Vice President Julie Eck, CTP UNITED STATES Vice President SunTrust Treasury Manager RBC Capital Markets Brenda Chapman, CTP Atlanta, GA The North Highland Company Rich Florez, CTP Brooklyn, NY Manager of Cash Management UNITED STATES Roswell, GA Treasury Manager UNITED STATES Carrols Corporation UNITED STATES WinnCompanies West Monroe, NY Joe Crifasi, Jr., CTP Hudson, MA Nassim Gharib, CTP UNITED STATES Fixed Income Strategist Patrick Eckert, CTP UNITED STATES Argo Tea First Bankers' Banc Securities Trader Money and Capital Chicago, IL Ju-Hsin Chen, CTP Saint Louis, MO Markets Erin Floyd, CTP UNITED STATES Senior Associate UNITED STATES Düsseldorfer Hypothekenbank Treasury Management Sales JPMorgan Chase AG Consultant Jacob Gibbons, CTP Jersey City, NJ Düsseldorf, NW Wells Fargo Bank, N.A. Treasury Analyst UNITED STATES GERMANY Portland, OR Univar UNITED STATES Downers Grove, IL UNITED STATES

www.AFPonline.org AFP Exchange I 59 DECEMBER 2018B – JANUARY 2019 CTPs

Cheryl Gilge, CTP Kevin Heck, CTP James Inabinet, CTP IV Peter Kaihani, CTP ChunPong Lai, CTP Treasury Analyst III Manager Treasury Operations Treasury Analyst Treasury Sales Analyst Assistant Treasury Manager CUNA Mutual Insurance Society Gategroup Holding AG Regional Management Corp. SunTrust IP Global Limited Madison, WI Zurich Greer, SC Nashville, TN Hong Kong UNITED STATES SWITZERLAND UNITED STATES UNITED STATES HONG KONG

Michael Gilles, CTP Santosh Hegde, CTP Daniel Irawan, CTP Kirubakaran Kaliyaperumal, CTP Joshua Laird, CTP Treasury Ananlyst Senior Treasury Architect Manager Operations Associate VP, Corporate Treasury Services Coulter Companies Santosh Hegde Astra International Tbk Pt Comerica Bank Trustmark National Bank Peoria, IL Marietta, GA Jakarta Toronto, ON Jackson, MS UNITED STATES UNITED STATES INDONESIA CANADA UNITED STATES

Tammie Glorioso, CTP Hatem Helal, CTP Richard Irwin, CTP Bala Kasa, CTP Helen Lam, CTP Treasury Management Sales Group Treasury Analyst VP and Treasurer Senior Consultant HSBC Bank USA, N.A. Analyst DMG - Mountain View Marlin Business Services PwC San Francisco, CA Bank of America Cairo Corporation Visakhapatnemt, Andhra UNITED STATES Newark, CA EGYPT Mount Laurel, NJ Pradesh UNITED STATES UNITED STATES INDIA Karen Latham, CTP Rhonda Henry, CTP Senior Financial Officer Eric Gonzales, CTP Lead Treasury Specialist John Iwanicki, CTP Oliver Keady, CTP Medinah, IL Associate FBL Financial Group Tampa, FL PNC Bank UNITED STATES Redbridge Debt & Treasury West Des Moines, IA UNITED STATES Annandale, VA Advisory UNITED STATES UNITED STATES Brandon Lauer, CTP Houston, TX Hema Iyer, CTP Regions Bank UNITED STATES Kyle Heutel, CTP Treasury Analyst KatyShay Kennedy, CTP Knoxville, TN Sr. Treasury Analyst Imperial Parking Canada Corp Jacksonville, FL UNITED STATES Kevin Gravina, CTP Centene Corporation Vancouver, BC UNITED STATES Associate Treasurer Saint Louis, MO CANADA Inderjit Lavert, CTP Colorado School of Mines UNITED STATES Gerald Kern, CTP Money Market Liquidity Golden, CO Evan Jackson, CTP Treasury Manager Portfolio Manager UNITED STATES Jon Paul Hickey, CTP Treasury Analyst Flex Federal Home Loan Bank of Regions Bank Issaquah, WA San Jose, CA Seattle Christopher Graybeal, CTP Memphis, TN UNITED STATES UNITED STATES Seattle, WA Treasury Advisor UNITED STATES UNITED STATES FedEx Corporation Oksana Jacobowitz, CTP Mirna Khella, CTP Memphis, TN James Hildreth, CTP Head of Credit Risk Financial and Treasury Simon Law, CTP UNITED STATES LifePoint Hospitals Inc New York, NY Accountant National Bank of Canada Nashville, TN UNITED STATES Nextgen Clearing Calgary, AB Matthew Greisler, CTP UNITED STATES Cairo CANADA Director of Corporate Finance Maggie Jiang, CTP EGYPT Graham Holdings Dominic Ho, CTP Sales Manager Emilie Lawson, CTP Woodbine, MD Treasury Trader HSBC Bank USA, N.A. Denise Kirby, CTP Client Solution Advisor UNITED STATES Western Union San Francisco, CA Cash Management Team Lead PNC Bank London UNITED STATES Rolls-Royce Corporation PHILADELPHIA, PA Andrew Grove, CTP UNITED KINGDOM Indianapolis, IN UNITED STATES Investment Administrator Isidora Jimenez LaCasse, CTP UNITED STATES Caterpillar Teresa Holifield, CTP Oracle Corporation Galya Laya, CTP Washington, IL Administrator and Product Washoe Valley, NV Nick Kirby, CTP Treasury UNITED STATES Manager UNITED STATES Treasury Analyst GKN North America Services, Inc. Proformance, Inc. KAR Auction Services Lombard, IL Vivek Mahendra Gupta, CTP Mckinney, TX Dustin Johnson, CTP Indianapolis, IN UNITED STATES Head Of Treasury Sales UNITED STATES Senior Treasury Manager UNITED STATES Union National Bank National Oilwell Varco Jena Layne, CTP Abu Dhabi Andrew Crane Holland, CTP Houston, TX Amber Kirk, CTP Senior Vice President UNITED ARAB EMIRATES Regions Bank UNITED STATES Treasury Manager SunTrust Bank Orlando, FL NCH Corporation Nashville, TN Jorge Gutierrez, CTP UNITED STATES Douglas Jones, CTP Irving, TX UNITED STATES Treasury Management Consultant Treasury Manager UNITED STATES Capital One Karl Honegger, CTP Direct ChassisLink Inc. Grace Lee, CTP Long Island City, NY Treasury Analyst Charlotte, NC Sarah Koenigs, CTP Investment Manager UNITED STATES Whiting Oil and Gas UNITED STATES Treasurer District of Columbia Broomfield, CO Five Star Bank Washington, DC Matthew Harlan, CTP UNITED STATES Julius Jones, CTP Rocklin, CA UNITED STATES Sr. Treasury Analyst Treasury Accountant UNITED STATES Haemonetics Garey House, CTP Houghton International Inc. Christopher Leslie, CTP Dorchester, MA Business Development Banker Philadelphia, PA Jeremy Koepf, CTP Treasury Manager UNITED STATES Capital One UNITED STATES Financial Analyst Masco Corp. Somerville, MA Tri-State Generation Detroit, MI William Harris, CTP UNITED STATES Sanil Juneja, CTP & Transmission UNITED STATES Regions Bank Detroit, MI Frederick, CO Indianapolis, IN Vanessa Hubbard McMichael, UNITED STATES UNITED STATES Hai Ying Li, CTP UNITED STATES CTP Deputy General Manager Associate Javier Jurado, CTP Sut Han Krehn, CTP Bank Of China (Hong Kong) Greg Haugen, CTP Wells Fargo Bank Finance Analyst Associate Accounting Manager Limited Treasury Analyst Charlotte, NC Caterpillar Highlands Ranch, CO Hong Kong Argo Group UNITED STATES Dunlap, IL UNITED STATES CHINA San Antonio, TX UNITED STATES UNITED STATES Connor Hughes, CTP Ranganathan Krishnan, CTP Shu Jun Li, CTP Vice President Jane Kaddes, CTP Manager - Investment Operations Product Manager Michael Haydin, CTP IV Citi Senior Specialist Treasury & IA Clarington Investments Bank Of China (Hong Kong) Senior Business Advisor San Francisco, CA Investment Operations Ajax, ON Limited DiLeo & Charles Tax and UNITED STATES Commercial Bank International Plc CANADA Hong Kong Consulting Dubai CHINA Rye, NY Samson Ikenga, CTP UNITED ARAB EMIRATES Debbie Kukta, CTP UNITED STATES Team Lead, Treasury City Treasurer Yanting Li, CTP Operations-Foreign Exchange Burbank, City Of Sr. Treasury Analyst Fidelity Bank PLC Burbank, CA CIT Group Inc. Calgary, AB UNITED STATES Livingston, NJ CANADA UNITED STATES

60 I AFP Exchange Spring 2019 Yong Liang, CTP Stephanie Mallory, CTP Matthew Mertens, CTP Russell Nenon, CTP Chase Nunneley, CTP Accounts Receivable Coordinator Vice President Treasury Mgmt. Treasury Analyst Corporate Relationship Manager Assistant Treasurer and Tax craigslist, Inc. Country Club Bank A.T. Kearney First Tennessee Bank Collector Daly City, CA Kansas City, MO Chicago, IL Memphis, TN County of Kern UNITED STATES UNITED STATES UNITED STATES UNITED STATES Bakersfield, CA UNITED STATES Tricia Light, CTP Kristin Mann, CTP Jared Meyer, CTP Nataraja Netaji, CTP Treasury Management Officer Regions Bank Treasury Manager Senior Treasury Analyst Bethany Obermoller, CTP PNC Bank Jacksonville, FL City Of Largo Nashville, TN Treasury Management Sales Philadelphia, PA UNITED STATES Clearwater Beach, FL UNITED STATES Consultant UNITED STATES UNITED STATES PNC Bank Mohamed Marie, CTP Jacob Newell, CTP Cornelius, NC Luke Lindsay, CTP Treasury Section Chief Sean Might, CTP Financial Instrument & Systems UNITED STATES Alliance Bernstein Suez Treasury Analyst Analyst White Plains, NY EGYPT TravelCenters of America, LLC TIAA Bank Hope Obijiaku, CTP UNITED STATES North Ridgeville, OH Jacksonville, FL Consultant James Marotta, Jr., CTP UNITED STATES UNITED STATES African Development Bank Emelie Lindvall Carranza, CTP Business Development Executive Abidjan Director of Treasury Operations JPMorgan Chase Timothy Miller, CTP Ka Weng Ng, CTP CÔTE D'IVOIRE City National Bank of Florida Atlanta, GA Cash Management Advisor Associate Director, Ratings and Pembroke Pines, FL UNITED STATES Northwest Bancshares, Inc. Financial Business Development Fola Okusami, CTP UNITED STATES Lancaster, PA AIA Group Limited Senior Treasury Analyst Ruben Martinez, CTP UNITED STATES Hong Kong University of Calgary Ching Ling, CTP Treasury Management Sales HONG KONG Calgary, AB Arlington, VA Consultant Ross Milliken, CTP CANADA UNITED STATES Wells Fargo Treasury Management International Payments Manager Andrew Nguyen, CTP North Bergen, NJ Globality S.A. Accounting Manager Flavia Oliveira, CTP Zhengyi Liu, CTP UNITED STATES Munsbach Henry Company Analyst Senior LUXEMBOURG Fountain Valley, CA Citi Ernst & Young Michal Maturkanic, CTP UNITED STATES San Francisco, CA Long Island City, NY Treasury Representative Nicholas Milton, CTP UNITED STATES UNITED STATES Prague Director - Deposits and Liquidity Cuong Nguyen, CTP CZECH REPUBLIC CIBC Senior Treasury Analyst Todd Olson, CTP Monique Lopez, CTP North Vancouver, BC Northwest FCS Treasury Manager Vice President Melanie May, CTP CANADA Spokane, WA Medtronic JP Morgan Chase Treasury Management Analyst UNITED STATES Andover, MN Brooklyn, NY Regions Bank Murat Misirci, CTP UNITED STATES UNITED STATES Rockwall, TX Senior Treasury Manager Paul Nielsen, CTP UNITED STATES Kuwait Airways Corp. Corporate Finance Advisor, Georgette Orr, CTP Nathan Lorton, CTP Farwaniya Treasury Program Specialist III Assistant Treasurer James McCormick, CTP KUWAIT Murphy Oil Corp. Caterpillar Inc. Feld Entertainment Senior Manager Katy, TX Peoria, IL Lutz, FL EY Sena Mitchell, CTP UNITED STATES UNITED STATES UNITED STATES Crystal Lake, IL Florida Municipal Power Agency UNITED STATES Orlando, FL Juan Nieto, CTP Orlando Ortiz, CTP Marjorie Lowery, CTP UNITED STATES Manager, Corporate Finance & Treasury Analyst Treasury Analyst Kirk McCulley, CTP Treasury CIBC-MELLON Spirit Realty Capital Vice President, Commercial Lisa Montrose, CTP TriNet Mississauga, ON Forney, TX Payables Consultant Treasury Analyst Sarasota, FL CANADA UNITED STATES Regions Bank Wells Fargo UNITED STATES Vestavia Hills, AL San Francisco, CA Steven Paine, CTP Chen Luo, CTP UNITED STATES UNITED STATES Alex Noh, CTP Senior Financial Analyst Financial Analyst Business Analyst University Corporation For CHICAGO, IL Carl McDonald, CTP Kevin Mooney, CTP YMCA of Greater New York Atmospheric Research UNITED STATES Treasurer Assistant Director of Cash New York, NY Thornton, CO Health Care Service Corporation Management UNITED STATES UNITED STATES Konstantin Lykhytsky, CTP Chicago, IL Cornell University Head of Treasury UNITED STATES Ithaca, NY Keena Nolinske, CTP Ronald Palmer, Jr., CTP AXA UNITED STATES Cash Strategy Manager Chief Financial Officer Kiev Ryan McDonough, CTP BlueCross BlueShield of LA Alpine Mutual Funds UKRAINE Corporate Treasurer Thomas Morse, CTP Prairieville, LA White Plains, NY Global Convergence, Inc. Regions Bank UNITED STATES UNITED STATES Xiaoteng Ma, CTP Clearwater, FL Birmingham, AL Senior Financial Analyst UNITED STATES UNITED STATES Janet Norman, CTP Anita Panjwani, CTP Oracle Corporation Director Treasury Americas Senior Manager Reno, NV Sean McIrvin, CTP Brett Murphy, CTP Outokumpu Americas, Inc. CIBC UNITED STATES Chicago, IL SVP Calvert, AL Edmonton, AB UNITED STATES Capital One UNITED STATES CANADA Bryan Machado, CTP New York, NY Treasury Analyst Alexandria Mehmeti, CTP UNITED STATES Roberto Norton, CTP Farrah Panjwani, CTP Hasbro, Inc. Global Treasury Analyst Senior Treasury Analyst ATB Financial East Providence, RI Gogo Brian Murphy, CTP MicroVest Calgary, AB UNITED STATES Chicago, IL Analyst Bethesda, MD CANADA UNITED STATES Peapack-Gladstone Bank UNITED STATES Robert MacNeil, CTP Bedminster, NJ Andrew Park, CTP Global Treasury Risk Manager Tomer Meir, CTP UNITED STATES Abdulhameed Nouraldean, CTP Portfolio Strategist Cooke Aquaculture Inc CFO Assitant Treasurer Hybrid Block Saint John, NB Sundberg Ferar, Inc. John Naumann III, CTP Insite Wireless Group Llc Hong Kong CANADA Commerce Township, MI Sr. Manager - Treasury & Payroll Alexandria, VA HONG KONG UNITED STATES United Therapeutics Corporation UNITED STATES Emily Mahairas, CTP Pasadena, MD Jackson Parrish, CTP Treasury Analyst Graham Merrill, CTP UNITED STATES Eric Novak, CTP Vice President Weyerhaeuser Accounting Manager IRR and Liquidity Risk Manager Regions Bank Seattle, WA Zumiez Incorporated Connor Nelson, CTP TCF Financial Corporation Memphis, TN UNITED STATES Seattle, WA Analyst, Capital Markets, Maple Grove, MN UNITED STATES UNITED STATES Treasury UNITED STATES Bausch Health Incorporated Bridgewater, NJ UNITED STATES

www.AFPonline.org AFP Exchange I 61 DECEMBER 2018B – JANUARY 2019 CTPs

Barry Patriquin, CTP LaShonda Price, CTP Ahmed Rizk, CTP Jeffrey Sajdak, CTP Christopher Shannon, CTP Director SunTrust Deputy Manager, Treasury Ludlow, MA Analyst ATB Financial Atlanta, GA Americana UNITED STATES Serrala Calgary, AB UNITED STATES Cairo Harrodsburg, KY CANADA EGYPT Raed Saleh, CTP UNITED STATES Hana Puncocharova, CTP Treasury Manager Daniel Paul, CTP Senior Treasury Representative Zachary Roach, CTP Pharma International Tonghyun Shim, CTP Manager-Financial Accounting Solar Turbines EAME Treasury Manager Amman Senior Associate and Advisory Services Praha Asurion Corp. JORDAN JP Morgan Ernst & Young CZECH REPUBLIC Mount Juliet, TN New York, NY Pasadena, CA UNITED STATES Mohamed Salem, CTP UNITED STATES UNITED STATES Walter Quan, CTP Senior Treasury Accountant Director, Treasury and Sheldon Roddy, CTP AL Masry Al Youm Newspaper Kreshnik Shporta, CTP Karin Payton, CTP Payments Solutions Regions Bank Giza Treasury Analyst Regions Bank ATB Financial Knoxville, TN EGYPT Troy, MI Hoover, AL Calgary, ON UNITED STATES UNITED STATES UNITED STATES CANADA Aziz Samji, CTP Veronica Rodriguez De Marco, CTP Treasury Manager - Global Daniel Shuford, CTP Alonso Pedroza, CTP Patricia Quint, CTP Treasury Analyst Market Strategist Treasury Management Sales Senior Treasury Analyst SVP ARRIS International, PLC Kimberly - Clark Limited Officer RR Donnelley People's United Bank Suwanee, GA Lewisville, TX SunTrust Chicago, IL Boston, MA UNITED STATES UNITED STATES Marietta, GA UNITED STATES UNITED STATES UNITED STATES Carolina Rojo, CTP Roy Samuel, CTP Leow Pei Leng, CTP Sheela Radha, CTP Front Office Treasury Associate Treasury Manager Roli Shukla, CTP Finance Manager Business Analyst Philip Morris International Alghanim Industries Treasury Analyst Taylor's Education Group SwapsTech Inc Vicente Lopez Safat Bridge Investment Group Kuala Lumpur Concord, NC ARGENTINA KUWAIT Sandy, UT MALAYSIA UNITED STATES UNITED STATES Elizabeth Rollins, CTP Valerie Sauvage, CTP Daniel Perez, CTP Liju Raju, CTP Treasury Manager Treasury Consultant Reeva Singh, CTP Manager, Treasury Team Leader Houston, TX New York, NY Manager-Treasury& Taxation Horizon Blue Cross Blue Shield SoftwareOne UNITED STATES UNITED STATES MCPL of New Jersey New Delhi Bangalore, Karnataka Newark, NJ INDIA Martin Ros, CTP Darci Schaecher, CTP INDIA UNITED STATES Senior Corporate Treasury Lead Cash Management - Lugesan Reddy, CTP Analyst Treasury Agent Nicole Slaughter, CTP Kelli Perkins, CTP Foreign Exchange Dealer Philip Morris Latin America Omaha Public Power District Vice President, Treasury Willowbrook, IL Milton, ON Services S.R.L. Omaha, NE State Street UNITED STATES CANADA Olivos, Buenos Aires UNITED STATES Lilburn, GA ARGENTINA UNITED STATES Ryan Peterson, CTP Gabriela Redondo, CTP Jessica Schafer, CTP Rolling Meadows, IL Treasurer Rachel Rossel, CTP VP / Treasury Sales Officer Adam Smith, CTP UNITED STATES Linde Treasury Management Analyst Country Club Bank Senior Manager Consultant Bridgewater, NJ Country Club Bank Kansas City, MO Ernst & Young Matthew Pflieger, CTP UNITED STATES Kansas City, MO UNITED STATES Charlotte, NC VP, Corporate Controller & UNITED STATES UNITED STATES Treasurer Christina Reed, CTP Roman Scheller, CTP Mission Essential Product Strategy Manager - Richelle Roth, CTP Senior Manager Catlin Smith, CTP New Albany, OH Treasury Services Treasury Manager EY Regions Bank UNITED STATES First National Bank Sprint Bayville, NY Birmingham, AL Glenwood, IA Centreville, VA UNITED STATES UNITED STATES Tim Plett, CTP UNITED STATES UNITED STATES Treasury Consultant Sarah Scherm, CTP Jonathon Smith, CTP Wells Fargo Jiaying Ren, CTP Evan Ruhling, CTP Corporate Finance Manager Treasury Management Sales Madison, WI Associate Account Manager Tri-State Generation and Trans- Analyst UNITED STATES New York Life Insurance PNC Bank mission Association, Inc. Wells Fargo Company Pittsburgh, PA Westminster, CO Tega Cay, SC Olivia Plunkett, CTP Riverhead, NY UNITED STATES UNITED STATES UNITED STATES J.P. Morgan Chase UNITED STATES Los Angeles, CA Jacob Rumery, CTP James Schroeder, CTP Ross Snell, CTP UNITED STATES Liliana Restrepo Pardo, CTP Sr. Director of Accounting Square 1 First VP Sr. Treasury Analyst Goodwill Industries Durham, NC SunTrust Monique Polas, Jr., CTP Sears Hometown and Outlet Inc Suwanee, GA UNITED STATES Atlanta, GA Assistant Treasurer Streamwood, IL UNITED STATES UNITED STATES Carnegie Mellon University UNITED STATES Donato Semeraro, CTP Pittsburgh, PA Christopher Rung, CTP Treasury Advisory services Jarid Snyder, CTP UNITED STATES Yasaman Riahi Zadeh, CTP Safe Harbor Tax and Deloitte Intermediate Investment Treasury Analyst Accounting LLC Epinois Professional Mary Pope, CTP Stemcell Technologies Oceanside, NY BELGIUM PSERS Treasury Management Officer Vancouver, BC UNITED STATES Halifax, PA JP Morgan Chase CANADA Cezar Serbanescu, CTP UNITED STATES Winnetka, IL Brendan Ryan, CTP Treasury Consultant UNITED STATES Joli Richards, CTP Treasury Analyst MTL Treasury Inc. Ram Sagar Somisetty, CTP Senior Account Manager- Cash The RMR Group Inc. Montreal, QC Manager Richard Popp, CTP Management Watertown, MA CANADA Kirby Building Systems India Contract Audit and Risk HSBC Bank UNITED STATES Pvt Ltd Management Director Ramsey, NJ Cristobal Servera - Vaquer, CTP Hyderabad, Andhra Pradesh FMPA UNITED STATES Ekaterina Ryltsova, CTP Manager Global Treasury INDIA Gotha, FL Senior Treasury Manager Operations UNITED STATES Marcia Richardson, CTP Dubai Columbia University Daniel Song, CTP Senior Consultant UNITED ARAB EMIRATES NEW YORK, NY Fulfillment & Service Treasury Allison Porter, CTP Mercer Investments UNITED STATES Advisor Assistant Vice President, Trea- Mableton, GA Deepak Sahay, CTP Bank of America Merrill Lynch sury Management Officer UNITED STATES Principal Product Manager Anjali Shah, CTP Buffalo Grove, IL Franklin Synergy Bank BNY Mellon SAP Treasury Consultant UNITED STATES Franklin, TN Maksims Rizikovs, CTP Bridgewater, NJ Allen, TX UNITED STATES Riga UNITED STATES UNITED STATES LATVIA

62 I AFP Exchange Spring 2019 William Southern, CTP Matthew Tejeda, CTP Benjamin Walters, CTP John Whitaker, CTP Austin Yost, CTP Treasury Analyst Treasury Sales Officer Financial Analyst International Treasury Manager Product Analyst AlixPartners, LLP SunTrust DePaul University Autozone BBVA Compass Warren, MI Charlotte, NC Chicago, IL Cordova, TN Birmingham, AL UNITED STATES UNITED STATES UNITED STATES UNITED STATES UNITED STATES

Kenneth Souza, CTP Mun Tham, CTP Cheri Walz, CTP James Wightman, CTP Chen Ping Yu, CTP Director of Investments Director, Commercial SVP Treasury Mgmt Manager Senior Manager - Finance Bank Of China (Hong Kong) USF Foundation Inc FX Solutions Providence Bank and Risk Limited Tampa, FL RBC Royal Bank Jefferson City, MO Federated Co-Operatives Hong Kong UNITED STATES Toronto, ON UNITED STATES Limited CHINA CANADA Saskatoon, SK Douglas Spickler, CTP Laura Wang, CTP CANADA James Yu, CTP Treasury Sales Officer Jonathan Thorsell, CTP Vice President Cash Management Analyst SunTrust Robinson Humphrey, Inc Treasury Solutions Officer Deutsche Bank Mary William, CTP City of Vancouver Atlanta, GA Bank of America New York, NY Branch Head Vancouver, BC UNITED STATES Rolling Meadows, IL UNITED STATES Commercial International Bank CANADA UNITED STATES Cairo Joshua Sprague, CTP Mengzhi Wang, CTP EGYPT Steve Zagar, CTP Treasury Management Officer Jayne Tooley, CTP Treasury Analyst Senior Vice President & Chief PNC Bank Treasury Analyst Willis Towers Watson James Williams, CTP Financial Officer Dayton, OH ascensus Amstelveen First Tennessee Bank Farm Credit Services of Mid UNITED STATES Dresher, PA NETHERLANDS Memphis, TN America UNITED STATES UNITED STATES Louisville, KY Angela Staszak, CTP William Wang, CTP UNITED STATES Treasury Manager Truong Tran, CTP Business Banking Sales Support John Williams, CTP Stepan Company Vice President, Treasury Associate Supervisor - Investment Taylor Zalewski, CTP Northbrook, IL SoftBank Bank of America Business Operations Treasury Manager UNITED STATES San Carlos, CA Capital Ohio Public Employees Kelly Services, Inc. UNITED STATES Walnut, CA Retirement System Royal Oak, MI Allison Steele-Flores, CTP UNITED STATES Columbus, OH UNITED STATES Treasury Manager Olufemi Tunwase, CTP UNITED STATES EnPro Industries, Inc. Banking Advisor Will Ward, CTP Hongda Zhang, CTP Charlotte, NC Royal Bank of Canada VP of Treasury Management Scott Wolfe, CTP Manager UNITED STATES Calgary, AB United Community Bank Vice President, Healthcare L Brands CANADA Suwanee, GA Treasury Management Officer Columbus, OH Wayne Stoltenberg, CTP UNITED STATES PNC Bank UNITED STATES EVP & CFO Jennifer Tyler, CTP North Olmsted, OH Vine Oil & Gas Cash Manager Elizabeth Warford, CTP UNITED STATES Liang Zhang, CTP Westlake, TX Air Products & Chemicals Inc Sr. Manager - Treasury Operations Senior Product Manager UNITED STATES Allentown, PA Express Scripts Sze-kar Wong, CTP Bank Of China (Hong Kong) UNITED STATES Jerseyville, IL Senior Manager Limited Tim Stone, CTP UNITED STATES EY Hong Kong ATB Financial Roberto Valladares, CTP New York, NY HONG KONG Calgary, AB Treasury Analyst Christian Watson, CTP UNITED STATES CANADA Intelsat Treasury Analyst Sergio Zonta, CTP Arlington, VA PNC Financial William Woodfield, CTP Manager Ryan Stork, CTP UNITED STATES Columbus, OH Treasurer Ernst & Young Treasury Management Analyst UNITED STATES Bausch Health Incorporated Trophy Club, TX Wells Fargo Oscar van Blaaderen, CTP, FP&A Bridgewater, NJ UNITED STATES San Francisco, CA Planning & Appraisal Manager David Wattenmaker, CTP UNITED STATES UNITED STATES Innovation and R&D International Treasury Services Frank Zschoche, CTP Shell International B.V. Analyst Kenneth Wright, CTP Foreign Exchange Manager Donald Suray, CTP Rijswijk The Coca-Cola Company Director of Finance The Toro Company Treasurer NETHERLANDS Decatur, GA Otsuka America Bloomington, MN Xerium UNITED STATES Pharmaceutical, Inc. UNITED STATES Youngsville, NC Bobby Van Thuyne, CTP Hagerstown, MD UNITED STATES Lead Treasury Analyst Jingyan Wee, CTP UNITED STATES USAA Real Estate Regional Sales Cash Management Stephanie Swift, CTP San Antonio, TX BNP Paribas Wei-Liang Wu, CTP Associate Financial Analyst UNITED STATES Singapore Treasury Dealer City and County of Denver SINGAPORE First Commercial Bank Denver, CO Jim Vanderwel, CTP London Branch UNITED STATES Assistant Treasurer Joel Wehring, CTP London Western Refining Treasury Manager UNITED KINGDOM Monica Tan, CTP Mesa, AZ Core Laboratories Liquidity Analyst UNITED STATES Houston, TX Yi Qiu Xu, CTP Goldman Sachs UNITED STATES Bank Of China (Hong Kong) Singapore Steven Varnau, CTP Limited SINGAPORE Treasury Specialist Thomas Weir, CTP HONG KONG Nationwide Mutual Insurance Treasury Analyst Lenka Taylor, CTP Company US Foods, Inc. Bradley Yanez, CTP Seattle, WA Columbus, OH Rosemont, IL Treasury Manager UNITED STATES UNITED STATES UNITED STATES Credit Acceptance Corporation Lake Orion, MI Andrew Teachout, CTP Lauren Vasquez, CTP Chih-Chun Wen, CTP UNITED STATES Business Analysis Manager Treasury Manager Analyst Starbucks Corporation Schneider Electric Quanxin Maria Yaskanich, CTP Seattle, WA Fulshear, TX Roanoke, TX Senior Product Manager UNITED STATES UNITED STATES UNITED STATES PNC Bank Bay Village, OH Shawn Teel, CTP James Walsh, CTP Michelle Werthmuller, CTP UNITED STATES Senior Treasury Manager Controller Treasury & Risk Analyst Whataburger Tufts University Core & Main LP Matthew Yoon, CTP San Antonio, TX Newton, MA Saint Peters, MO Assistant Treasurer UNITED STATES UNITED STATES UNITED STATES (Senior Manager) LG Electronics U.S.A., Inc. Englewood Cliffs, NJ UNITED STATES

www.AFPonline.org AFP Exchange I 63 DECEMBER 2018-JANUARY 2019 CERTIFIED CORPORATE FP&As

Christopher Coon, FP&A Fiona Eudora Gomez, FP&A Thomas John, FP&A Director of Analysis Global Planning & Appraisal Senior Financial Analyst 1-800 CONTACTS, Inc. Lead P&T Genoa Draper, UT Shell International B.V. Renton, WA AFP is excited to recognize the most recent UNITED STATES Den Haag UNITED STATES class of Certified Corporate Financial Planning & NETHERLANDS Analysis Professionals. Aaron Crowe, FP&A Jane Kellerhals, FP&A Senior Financial Analyst Bryan Gough, FP&A Senior Manager-Risk The Certified Corporate FP&A Professional Asurion Global Broking - Finance Management designation defines universal principles and Nashville, TN Business Partner Verizon UNITED STATES Brooklyn, NY Gillette, NJ standards of practice used in performing financial UNITED STATES UNITED STATES planning & analysis job functions. Those who Patrick Davis, CTP, FP&A earn the FP&A credential have demonstrated CFO Gary Graebner, FP&A Jerald Kerlin, FP&A their understanding of those complex processes, Superior Auto Verizon Communications, Inc. Marsh & McLennan tools and best practices and are recognized as Fort Wayne, IN Alpharetta, GA Companies Inc. well-positioned to provide insight to strategic UNITED STATES UNITED STATES Seattle, WA UNITED STATES business decisions at organizations. Brandy Davis, FP&A Alan Grandy, CTP, FP&A Candidates of the Certified Corporate Harsco Treasurer Tim Kiernan, FP&A Owasso, OK Chine Drive School Council Senior Financial Analyst FP&A Credential must meet education and UNITED STATES Toronto, ON Tradebe Environmental experience requirements in addition to passing CANADA Services two rigourous examinations. Ivo de Rooij, FP&A Meriden, CT Business Controller Erich Grundy, FP&A UNITED STATES The following individuals should be congratulated Wartsila Plano, TX for their achievement and praised for reaching Winterthur UNITED STATES Michael Kim, FP&A this level of finance professionalism. SWITZERLAND Finance Business Partner Matthew Gullick, FP&A Oracle Robert Dia, CTP, FP&A Senior Financial Analyst Leesburg, VA Montclair, NJ Partners Surgical UNITED STATES Justin Abramovitz, FP&A Emily Boscheratto, FP&A UNITED STATES Houston, TX Financial Analyst Senior Financial Analyst UNITED STATES Michael Krichevsky, FP&A RE/MAX International, Inc. Comcast Cable Justin Diaz, FP&A FP&A Manager Denver, CO Communication Senior Financial Analyst Mircea Hepes, FP&A Cambridge Associates UNITED STATES Royal Oak, MI Westgate Resorts Senior Financial Analyst Newton, MA UNITED STATES Apopka, FL Thermo Fisher Scientific UNITED STATES John Adams, CTP, FP&A UNITED STATES Madison, WI Regional Manager - Finance Kevin Buckley, FP&A UNITED STATES Adhiyanti Kusumajaya, FP&A Oracle Senior Finance Manager Adam Dudic, FP&A Sugar Land, TX Minneapolis, MN Marriott International, Inc. United States Steel Jeremy Hollis, FP&A UNITED STATES UNITED STATES Bethesda, MD Corporation Senior Director, Corporate & UNITED STATES Kosice - Saca Development Finance Penny LaFleur, FP&A Kevin Ahrens, FP&A SLOVAKIA Marriott Vacations Worldwide Senior Lead Analyst Manager FP&A Christopher Burton, FP&A Corporation Chick-fil-A, Inc. Verizon Wireless Consultant Lindsey Dvorak, FP&A Orlando, FL Atlanta, GA Bernardsville, NJ FTI Consulting, Inc. Oracle Corporation UNITED STATES UNITED STATES UNITED STATES New York, NY Boulder, CO UNITED STATES UNITED STATES Qinxin Hong, FP&A Robert Lagen, FP&A Adedoyin Akande, FP&A Senior Financial Analyst Finance Manager Manager Harshit Chatur, CTP, FP&A Dennis Easter, FP&A Verizon Communications, Inc. FedEx Corporation Verizon Communications, Inc. Director - Finance Business Application Culver City, CA Cordova, TN Basking Ridge, NJ NRG Energy, Inc. Consultant UNITED STATES UNITED STATES UNITED STATES Katy, TX Algorithm Inc UNITED STATES Dublin, OH Keith Hoover, FP&A Lisa Lamberth, FP&A Michael Alexander, FP&A UNITED STATES Senior Financial Analyst Manager - FP&A, Finance Manager, FP&A Jiayun Chen, FP&A Thermo Fisher Scientific Operations Evanston, IL Director of Reporting & Amr Elgawaly, FP&A Pittsburgh, PA Verizon Communications, Inc. UNITED STATES Analysis Manager - Finance Systems & UNITED STATES Laurel, MD Franklin, TN Performance UNITED STATES Mark Audigier, FP&A UNITED STATES Dubai Xiankui Hu, CTP, FP&A Director UNITED ARAB EMIRATES Professor of Finance Matt Leid, FP&A Chatham Financial Corp Dimitry Cherney, FP&A Arkansas State University Senior Financial Analyst Kennett Square, PA Marsh & McLennan Heng Fang, FP&A Jonesboro, AR Nautilus Inc. UNITED STATES Companies Inc. Financial Analyst UNITED STATES Vancouver, WA New York, NY UNITAS UNITED STATES Saachi Bangera, FP&A UNITED STATES Los Angeles, CA Mark Hutchinson, FP&A Senior Finance Analyst UNITED STATES Director of Financial Planning Daniel Liliac, CTP, FP&A Travelport Tracey Clenott, FP&A & Analysis Corporate Finance Manager Dubai Verizon Communications, Inc. Lu Qi Gan, FP&A STAR Financial Bank ProAssurance Corporation UNITED ARAB EMIRATES Lake Mary, FL Senior Analyst Fort Wayne, IN Hoover, AL UNITED STATES Johnson & Johnson UNITED STATES UNITED STATES Horacio Barrera, FP&A Singapore Senior Financial Analyst Michael Cockburn, FP&A SINGAPORE Eric Irani, FP&A Fang Lin, FP&A Oracle Finance Analyst Upstream CP Team Lead, Treasury and FP&A Financial Analyst San Antonio, TX Shell International B.V. Eric Glaze, CTP, FP&A Shore Financial Services, Inc. Chassix, Inc. UNITED STATES Aberdeen CFO Troy, MI Sterling Heights, MI UNITED KINGDOM Mid-American Machine & UNITED STATES UNITED STATES Jessica Blackburn, FP&A Equipment, Inc. Thermo Fisher Scientific Inc. Garnett, KS St. Louis, MO UNITED STATES UNITED STATES

64 I AFP Exchange Spring 2019 DECEMBER 2018-JANUARY 2019 CERTIFIED CORPORATE FP&As

Trina Litwin, FP&A Nikita Miller, FP&A Khoa Phan, FP&A Ahmer Sharif, FP&A Wesley Willetts, FP&A FP&A Analyst Director of Financial Planning Financial Analyst, FP&A Consultant Senior Finance Manager World Vision International & Analysis Thermo Fisher Scientific Inc. Oak Lawn, IL Stars Group Monrovia, CA The Kresge Foundation Ottawa, ON UNITED STATES Douglas UNITED STATES Redford, MI CANADA UNITED KINGDOM UNITED STATES Dustin Silvestri, FP&A Ruiying Liu, FP&A Aaron Poole, FP&A Senior Treasury Analyst Jason Woon, FP&A Financial Analyst Hesham Mokhiemer, CTP, Mary Kay Inc. Sun Chemical Corporation Senior Manager Thermo Fisher Scientific Inc. FP&A Allen, TX Cincinnati, OH KPMG LLP Shanghai Head of Finance UNITED STATES UNITED STATES Seattle, WA CHINA Riyadh UNITED STATES SAUDI ARABIA David Poppie, FP&A Ryan Sledge, FP&A Siddhartha Mandal, FP&A Division Finance Manager Executive Reporting Manager Walter Wozniak, CTP, FP&A Lubes Analyst- R&A DS GC Charles Mussallem, FP&A CenterPoint Energy, Inc. Marathon Oil Corporation Assistant Treasurer Aviation Spirit Airlines Inc. Minneapollis, MN Houston, TX Ohio State University Shell International B.V. Miami, FL UNITED STATES UNITED STATES Columbus, OH Chennai UNITED STATES UNITED STATES INDIA Jeremy Porfilio, CTP, FP&A Efrain Soto, FP&A Gene Mussel, FP&A Supplier Management Analyst Manager-FPA Cindy Yost, FP&A Senthilkumar Operations Manager Toyota Motor Sales, U.S.A. Inc. Verizon Senior Manger, FP&A Manickavachakam, FP&A Plastic Components Inc El Segundo, CA Dublin, PA Patheon Pharmaceuticals Manager Financial Planning Germantown, WI UNITED STATES UNITED STATES Durham, NC and Analysis UNITED STATES UNITED STATES Graybar Electric Raja Ramachandran, FP&A Manoj Sukumar, FP&A Saint Louis, MO Michael Neese, FP&A Global Business Development Director - FP&A Chun Ho Young, FP&A UNITED STATES Financial Consultant Manager Taulia Inc. Senior FP&A Manager Dominion Energy, Inc. Alliance One International Sunnyvale, CA Verizon Communications, Inc. Joseph Mansey, FP&A Layton, UT Cary, NC UNITED STATES Hong Kong Marsh & McLennan UNITED STATES UNITED STATES HONG KONG Companies Inc. Ben Swinney, FP&A Hoboken, NJ Yen Ling Neo, FP&A Anusha Raman, FP&A VP - Planning & Analysis Diana Zaiontz, FP&A UNITED STATES Assistant Manager Senior Manager, FP&A Texas Security Bank FP&A Manager Dimensions Data FireEye, Inc. Flower Mound, TX Whataburger, Inc. Robert Mansker, FP&A Singapore Milpitas, CA UNITED STATES Adkins, TX Manager Financial Metrics SINGAPORE UNITED STATES UNITED STATES Washington Gas Light Co. Jacek Szdzuj, FP&A Fairfax, VA Garret Neville, FP&A Teresa Ritchie, FP&A R&A Business Analyst UNITED STATES Associate Treasury Analyst Land Controller Shell International B.V. Dart Container Corporation Gehan Homes Krakow Manuel Manzoni, FP&A Mason, MI Sherman, TX POLAND Senior Financial Analyst UNITED STATES UNITED STATES Novelis Inc. Vadim Teselkin, CTP, FP&A Gockhausen Derek Niese, FP&A Simeily Rodriguez, FP&A Financial Analyst SWITZERLAND Finance Director North America Commercial Hygiena PSG Controller Ventura, CA Kyle Martin, FP&A Sims, NC Dell Inc. UNITED STATES Operations & Finance UNITED STATES Arraijan PatentDive, Inc. PANAMA Alex Thomas, FP&A New Orleans, LA Raffy Ouzounian, FP&A Senior Financial Analyst UNITED STATES Verizon Communications, Inc. Israpong Rujisampan, CTP, FedEx Corporation Hilliard, OH FP&A Cordova, TN Gins Mathew, FP&A UNITED STATES Treasury Assistant Manager UNITED STATES Specialist Financial Analyst Amway Corp. Oracle Roman Ovchinnikov, FP&A Bangkok Dustin Traylor, FP&A Bengaluru Marsh & McLennan THAILAND Senior Financial Planning INDIA Companies Inc. Analyst London Souny Sakprasit, FP&A Builders Mutual Insurance Spencer Mawhar, FP&A UNITED KINGDOM Consultant Financial Planning Company Financial Analyst & Analysis Raleigh, NC Hawaiian Airlines, Inc. Carlos Padron, FP&A Verizon UNITED STATES Honolulu, HI Lead Analyst, Performance Alpharetta, GA UNITED STATES Management UNITED STATES Hsuan-Chih Tseng, FP&A Equinor ASA Business Analyst Rusty McHan, FP&A Katy, TX Shailendra Sapra, CTP, FP&A Advisian Senior Director, FP&A UNITED STATES Executive Director Kaohsiung Warrior Met Coal UBS TAIWAN Brookwood, AL Yogesh Paliwal, FP&A Westfield, NJ UNITED STATES Manager UNITED STATES Oscar van Blaaderen, CTP, Mitsui & Co FP&A Rob Mellon, FP&A (Asia Pacific) Pte Ltd Scott Schlecht, FP&A Planning & Appraisal Manager Finance Manager Singapore, Marsh & McLennan Innovation and R&D Thermo Fisher Scientific Inc. SINGAPORE Companies Inc. Shell International B.V. Waltham, MA New York, NY Rijswijk UNITED STATES Peter Panos, FP&A UNITED STATES NETHERLANDS Associate Director Mario Millan, CTP, FP&A University of Utah Rashida Shakir, FP&A Jordan Von Almen, FP&A Treasury VP Salt Lake City, UT Analyst Senior Project Manager - Dolex Dollar Express, Inc. UNITED STATES Mission Foods Financial Analysis & Reporting Mansfield, TX Irving, TX Southern California Edison UNITED STATES UNITED STATES Rosemead, CA UNITED STATES

www.AFPonline.org AFP Exchange I 65 THE BOTTOM LINE

I'm a rodent NOT a meteorologist!

But Seriously IRA APFEL

n the morning of February 2 Punxsutawney Phil left his burrow and accidentally predicted the rest of winter. P-Squared (as his friends call him) did not see his shadow, Oauguring for a swift end to winter. Shortly thereafter I texted two AFP colleagues and we made the requisite forecasting jokes about the accuracy of Punxsutawney Phil’s prediction and the Bill Murray movie. Laughter ensued. All in good fun. But it did get me thinking seriously about budgeting, an annual process the produces a view of the future that may or may not be accurate, and people may or may not take seriously. After it is delivered, everyone goes back to what they were doing before. Does that sound familiar? Do you take your organization’s budget seriously? Do your colleagues? Does the process add value, alignment, or vision to corporate activities? Or, is it all in good fun like the burghers of Punxsutawney, Pennsylvania? This stuff matters. If the budget is immediately out-of-date or compiled with outrageous aspirations or bags of sand, then it becomes a bit of theatre, like the celebration around Groundhog Day. The difference is that it takes time and energy to stage that play and a budget.

66 I AFP Exchange Spring 2019 BETTER CASH FLOW IN THE FUTURE CAN START TODAY.

CORPORATE & COMMERCIAL BANKING | At PNC, we know that cash fl ow is the lifeblood of your business. That’s why we offer treasury management solutions and a professional relationship team that can help you stay one step ahead of today’s constantly changing marketplace. When our teams work together seamlessly, we can help you to accelerate receivables, optimize payables, enhance liquidity and maximize performance — online and on the go with our mobile apps. Because when you prepare for tomorrow today, you can accelerate your business’s growth.

For more information, visit pnc.com/ideas.

DOMESTIC & INTERNATIONAL TREASURY MANAGEMENT SERVICES | CARD SOLUTIONS | LIQUIDITY MANAGEMENT | ONLINE AND MOBILE ACCESS

PNC and PNC Bank are registered marks of The PNC Financial Services Group, Inc. (“PNC”). Banking and lending products and services, bank deposit products, and treasury management products and services are provided by PNC Bank, National Association (“PNC Bank”), a wholly owned subsidiary of PNC and Member FDIC. Certain banking and lending products and services require credit approval. Investments: Not FDIC Insured. May Lose Value. No Bank Guarantee. ©2019 The PNC Financial Services Group, Inc. All rights reserved.

CIB TM PDF 0219-089-1134402 www.AFPonline.org AFP Exchange I 67

CIB TM PDF 0219-089-1134402 AFP Resize Ad io2_8.125X10.75_FINAL.indd 1 2/8/19 11:32 AM

Flexible solutions for growing your business Expertise in providing lending, capital markets, risk management and treasury management solutions

CIT provides the services that help middle market companies acquire assets, create jobs, and grow. With deep industry expertise and capital markets experience, we can help you achieve your full growth potential through tailored solutions.

Learn more about our commercial finance solutions. Visit cit.com/commercial-finance or call us at 212-461-5200.

©2019 CIT Group Inc. All rights reserved. CIT and the CIT Bank logo are registered trademarks of CIT Group Inc.