On 19 June 2019, on a hot and humid morning, there was a full house at the DIFC (Dubai International Financial Centre) auditorium for a breakfast briefing supported by Kyriba – a regular supporter of such ACT events in Dubai and around the world.
This briefing focused on liquidity performance and payments fraud – two separate but quite related areas if one joins the dots…
Two case studies, one great panel. The briefing was a huge success from all the feedback I heard, but also for me as a moderator it was a dream come true. To have four treasurers and a compliance expert in one room, with a diverse set of operations, meaning that the audience and myself became party to a huge diversity of thinking due to the different business models. If your cash situation, due to a rate change, becomes significantly different overnight: what is the point of relying on a detailed cash flow forecast? Better have the basics and then an appropriate buffer at all times. Or how is it to live in an environment where a trader can enter your office wanting to buy a shipment on the high seas, available due to a default – again a buffer is needed. But this then contrasts with the complexities of other models and the question as to culture and how you develop a positive ecosystem where information is shared at the operational level. Covenants may be important to your (project finance) model due to the various funding channels, and different time horizons for different ‘players’ must be taken into account. Treasury often has the shortest horizon, as we all know, needing to manage cash on a daily basis, which is not the focus of the rest of the business (although they’d become aware of its importance pretty quickly if something went wrong).
We were fortunate to have a star line-up of participants on the day of Usman Akbar (Julphar-Gulf Pharmaceutical Industries), Daniel Black (Accuity), Anish Jain (Export Trading Group; case study on payment fraud), Abdul Majid Syed (ACWA Power; case study on enhanced liquidity performance) and Nikolay Valchinkovski (Mercuria Energy Group).
Through the briefing it became clear that having the right people on board, documenting and following policies and procedures and adhering to controls are all critical considerations for treasurers. We heard about a huge investment in IT (as a revenue centre) as the way forward. But tech has to work for you.
Corporate treasurers are more and more under threat from attack, yet they are also the people who can prevent it. Screening of prohibited parties is also critical to the business, as it only takes one ethical breach to ask the question as to whether you will be tarred with the same brush. But over-compliance can be an issue and a balance needs to be found between protecting, educating and being logical about how much you do.
A number of examples of cybercrime were cited, although our audience were either typical in that they did not want to admit they have been hacked, or else atypical as very few appeared to have had any attacks! Our panel members and case studies presented a raft of different examples – latest developments being the ability to extract cash from ATMs in 28 countries at the same time as part of a bank cyber attack, detecting a potential fraud by noting an email did not follow a ‘rule’ set up in the system to go to a particular folder, and a call from the CEO asking to move $20m and saying an email would follow, then hanging up – the voice being generated from recordings of the CEO, planned over a period of time.
How do we deal with this kind of challenge? Good old-fashioned controls help, e.g. dual signatures, segregation of duties, not sharing or duplicating passwords, etc. But we’ve no doubt all heard about the fraudster who stole $millions from his company by defrauding them of under $12k at a time, as that was the threshold which required a control.
Technology can really help us in this fast-changing world, and we mustn’t be afraid of it. And we must also look to our human behaviours where we make mistakes by being fearful, too kind, too sloppy or just too rushed to think so we go into denial.
