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2 posts from květen 2016


Technology revolution in payments

View Naresh Aggarwal’s profile on LinkedInView Jasmine Norcott’s profile on LinkedInView Mark Crowhurst’s profile on LinkedIn

 PwC Treasury’s recent Breakfast Briefing looked at the technology revolution in payments, which accounted for 30% of all US investment in FinTech in 2015[1]. Industry experts including PwC’s Naresh Aggarwal, Senior Manager in Treasury Advisory shared their views on dealing with this revolution and how it’s affecting customer experience, cost base and governance.

Treasurers are in a unique position to lead the response and become “Payment Champions” for their organisations with a clearly defined Payment Strategy. This will help them proactively shape their internal debates on dealing with Money In and Money Out, responding strategically rather than tactically to each new requirement in isolation. 

It’s not new

The payments market has already seen changes in the way services are delivered and by whom. For example, the increase in business use of PayPal, impact of PSD, and growth of bank agnostic payment systems like Bottomline and AccessPay. If the entry of FinTech into the payments space is not a new phenomenon, what is?  This revolution is characterised by its speed and breadth of disruption with ripples spreading beyond traditional payments into areas such as blockchain and mobile.  To varying degrees, companies are conscious of the potential impact and addressing it in a number of ways including investing in startups and building their own incubators to monitor and respond.

How will this affect me?

Payments used to be seen as rigid activities at the end of a complex process, with limited value to the organisation. Payment choices were limited and the focus was on making sure suppliers were paid and that receipts could be easily allocated.

Payment choices are increasing and customers and suppliers are expecting a more personalised approach. This is increasing complexity with a risk to customer retention, an increase in back office costs and new opportunities for fraud. As a key touch point with customers, claimants and suppliers, managing Money In and Money with a traditional mindset is not sustainable.

A change in approach is required to optimise the payments process and provide better customer experience, lower costs and better controls/ resilience.

This ensures that whether it’s about outages in clearing bank payment systems, the need to reduce costs, the impact of new technology, the removal of payment intermediaries, or the advent of new payment channels (such as Paym, Zapp, PayPal or Pingit), companies are able to assess the impact (including on legacy systems) and respond quickly.

How are regulators responding?

Regulators in the UK and overseas are looking at how to support new market entrants by opening up key areas of infrastructure and leveraging new technology. Their hope is that the current hegemony of the clearing banks can be broken up, fostering greater competition and innovation in the payments space.  Initiatives such as the World Class Payments strategy by Payments UK[2]  and the Whitechapel Think Tank[3] will be key parts of this.  However, this needs to be tempered by understanding what new risks this may create. For example, who will be responsible for customer data?  What protection will be in place?  How well capitalised are these new entrants compared with the traditional participants? What does regulation mean in a world of shared ledgers? Is your existing governance framework still fit for purpose?

How should I respond?

The first step should be to understand your strategy and vision for payments and how it impacts your customer’s experience; the costs of channels; impact of regulatory, technology and market changes; and how it will support your governance infrastructure. A growing number of companies are recognising the shortfalls in delivering tactical changes and looking to build a defined strategy.  The characteristics of a payment strategy cover:

 Payment blog 2

Click on the image to enlarge

So what next?

We finished with three key questions:

  1. Who is driving payment strategy in your business?
  2. Who is involved in coordinating and delivering cost effective and well controlled customer focused payments services in your organisation?
  3. Have you quantified the impact on costs, reduced financial crime, reconciliations and controls of your existing payments processes?

If the answers are unclear, you risk your payments getting out of control.

Please feel free to contact us  if you want to find out how you can optimise your payments and benefit from the technology revolution.

[1] World Class Payments report: https://www.paymentsuk.org.uk/project-delivery/world-class-payments

[2] Whitechapel Think Tank : http://www.wthinktank.org/home.html

[3] PwC report : Accelerating Change: London FinTech 2015 - 2016


How UK treasurers are responding to the upcoming EU Referendum

By Naresh Aggarwal, Sumedh Modale and David Stebbings

EU Referendum - over half of UK Treasurers are taking specific actions according to a recent PwC survey.

There’s much talk around what UK Treasurers are actually doing in relation to the upcoming EU referendum and the impact of its possible results. In order to provide more clarity PwC conducted a brief survey at the recent ACT conference and found that 54% of those questioned were taking specific actions including:

  • reviewing FX exposures and putting specific hedging in place;
  • making sure they have extra liquidity available in late June 2016 for use if required; and
  • Focussing on the medium term effects of a possible out vote on their exposures and risk management.  

The remaining 46% whilst not doing anything specific currently said they were keeping a particular watching brief on the cash and FX markets in the period up to and beyond the 23 June 2016 vote.


Of course the referendum and its result will affect Treasurers in different ways dependent on the business footprints of their company, their customers and their suppliers. Notwithstanding the varying approaches of Treasurers we would suggest there are a few additional key indicators they may wish to monitor closely over the next few months to better gauge whether further mitigating actions are required.

1. Cross border cash management structures

In the run up to the referendum, particularly if currency volatility increases, cross currency pools will need to be monitored more closely and may require additional funding to support the effect of currency movements. Unexpected liquidity drains could occur as subsidiaries find sudden and unforeseen calls on local liquidity. This may be exacerbated by the unwillingness of banks to provide additional balance sheet risks as they themselves deal with the results of the referendum.

2. Cash forecasting outcomes and working capital drivers

Working capital drivers may operate differently both in the run up and after the referendum as customers and suppliers respond differently to the vote. It could be important to engage with important customers and suppliers to reduce any surprises. Cash forecasting will need to be monitored carefully to ensure that any unusual variances are investigated and understood quickly.

3. Counterparty risks

Financial services providers (including non-banks such as supply chain financiers, insurers, etc.) may come under pressure both before and after the referendum. Whilst their overall impact may be limited, there may be an increase in uncertainty. This could impact both the sector risks as well as specific risks for the particular institution for a significant period of time. This level of risk and uncertainty could extend to key suppliers and customers. Counterparty risk assessments may need to be reviewed regularly and revisions to models/processes could be required if additional monitoring is required.


The EU referendum and the implications of the possible results have added additional risk and uncertainty for the Treasurer. From our survey about half are taking proactive actions whilst the remainder are taking more of a watching brief. Whatever their approach Treasurers should consider closely monitoring certain key treasury indicators to be better able to act should the need arise.