Global technology research and advisory firm, Ovum, recently published the results of a Corporate Treasurer survey, developed in partnership with Swiss financial services software specialist, Temenos.
Founded in 1985, and headquartered in London, Ovum is part of Informa Group, a global provider of business intelligence. Ovum has 23 offices on six continents. Its global team of 180 analysts offers analysis and consulting services across the IT, telecoms, and media industries. Its data and consulting clients include business leaders, CIOs, vendors, service providers, and regulators.
Temenos Group AG is a leading provider of banking software. Founded in 1993 and headquartered in Geneva, the company processes over 500 million daily transactions, for more than 2,000 firms worldwide, including 38 of the top 50 banks.
From July to September, Ovum interviewed 200 corporate treasurers in 23 countries spanning five regions; Asia Pacific, Europe, Latin America, Middle East, and the US. The survey focuses on five industries; Automotive and manufacturing, Food and drink, Technology, Pharmaceuticals, and Retail.
“The purpose of the study is to understand exactly how corporate banks must re-think their products and services in order to remain relevant to today’s corporate treasurer,” Ovum explained. Corporate Treasurer’s serve as financial risk managers, and protect a company’s value during business activities.
“The role of the corporate treasurer, and the banking services they need to meet their responsibilities, have changed fundamentally since the financial crisis.”
In a June interview, with Caitlin Long, the CEO of Seagate Technology, Dave Morton, explained how blockchains can help corporate treasurers. His company manages a global supply chain and global customer base. He began researching blockchain technology in 2014, and how it could solve several “pain points” for treasures, such as supplier payment latency and transparency.
“We pay upwards of +100,000 invoices a month” Morton said, and Seagate manages hundreds of bank accounts. “It is extremely clear to us that corporate use of blockchain technology will simplify corporate treasury operations and improve efficiency.”
John Rowland, executive director of Cicero, an integrated communications agency, also believes that blockchains can help treasurers, “If you need to know what your position is and how quickly you can provide liquidity to your company or to the market—that’s very important and potentially blockchain does help that.”
According to a global provider of cloud treasury solutions, Kyriba, treasurers can reduce costs by using blockchain-enabled payment apps coupled with digital currencies. This will reduce the expensive role of intermediaries, saving treasurers foreign exchange costs as well as minimize currency risk. “This will be especially useful as corporates expand into new markets,” the firm claims, citing the ability for them to bill in local currency.
Kyriba states that there are many other opportunities for blockchain in trade finance and remittance services which will interest others in the organization, “making treasury a valued partner to leverage blockchain technologies for the company’s supply and customer chains.”
CEO of the Association of Corporate Treasurers (ACT) Cash Management, Colin Tyler, believes that treasurers should be discussing the potential impact blockchain on the company’s business and financial strategies with their CFOs and CEOs. “This change that’s coming down the track is going to be disruptive to business,” says Tyler.
According to Deloitte’s strategy leader for their Rubix team, Oris Valiente, “The first step toward wider blockchain adoption is knowledge, and the logical entry point is to first understand how bitcoin works.” Valiente recently said that making “bitcoin more accessible so that users can experience blockchain technology first hand will deepen their understanding and ultimately increase adoption,” while unveiling aBitcoin ATM machine in the lobby of Deloitte’s Toronto tower.
“While there remains much hype around blockchain technology, its potential to lower trading risks is clear. At the very least, banks need to demonstrate their understanding of the opportunities around blockchain, as 75% of corporates in both Africa and Latin America are interested in solutions here.”
Blockchain adoption has been steadily growing in the Latin American region, especially Brazil. Earlier this month, Banco Santander published an Equity Research report on Brazil’s Banks and Financial Services sector. While acknowledging risks, the bank states “we believe Brazilian banks could benefit from the potential advantages of the blockchain—the technology underpinning bitcoins.”
The region hosts one of the largest bitcoin conferences, the Latin American Bitcoin and Blockchain Conference, laBitConf. The event has been held in Argentina, Mexico and Brazil. This years conference returns to Argentina in December.
The R3 consortium has also been expanding into the region. In April it signed up its first Latin American bank member, Banco Itaú. One of the biggest banking and financial services companies in Brazil, Banco Bradesco, followed in June.
After signing up with R3 in July, Banco Bradesco announced plans to pilot a new digital wallet using blockchain technology. A Brazilian startup, eWally, is developing the wallet to enable mobile payments and money transfers. Banco Bradesco is also testing out another blockchain solution designed by Bit.One as well as discussing cross-border payments with Ripple.
In July, Mexico-based startup, BitSo, won SWIFT’s Innotribe Startup Challenge for Latin America. Mexico’s First Bitcoin Exchange facilitates international cross-border payments. Meanwhile, Africa has had its share of interest in blockchain technology too.
Governor of the Reserve Bank of South Africa, Lesetja Kganyago, recently revealed that blockchain technology is being investigated by the bank, stating “We are willing to consider the merits and risks of blockchain technology and other distributed ledgers.”
Several large banks, including London-based Barclays, are investigating blockchain technology in the region. Barclays Africa, and ‘big-four’ South African bank, Absa, are members of the R3 consortium and are testing multiple platforms across the region together.
The first major blockchain conference series, Blockchain Africa, was held in Johannesburg in March 2016 selling out. Another is planned for next March.
One of the more famous blockchain initiatives from the region is the land registry startup Bitland, in Ghana. The initiative has been placing land titles in 26 communities on the OpenLedger blockchain to ensure that the proper owner’s title deeds cannot become lost or destroyed.