Besides, they also articulated the need for control, risk reduction, process standardization, improvement and waste elimination, as well as seamless settlement of time sensitive deals, among the imperatives of automated treasury management in the sector.
The keynote speaker at the maiden seminar of the Financial Market Dealers Association (FMDA) and Director of Banking and Payments System Department, Central Bank of Nigeria (CBN), ‘Dipo Fatokun, said it was gratifying that the World Economic Forum (WEF), in its Global Competitiveness Report (for 2014-2015), affirmed the relative sophistication, technological innovation, competitiveness and overall stability of the Nigerian financial market, and ranked it 67 among 144 countries appraised globally.
Noting that the ranking was one of the best rankings Nigeria received during the period, he said it is a testament of the relatively sound efforts and commitment of all the stakeholders in the Nigerian financial market.
However, he warned that despite the favourable globally rating, that there is still a lot of work to be done to achieve improvement in treasury related operations, which mainly bothers on technological innovation to drive the market.
He said that CBN, as a market regulator, has laid out some critical measures to forestall future systemic risks and improve on the market operations effectiveness, in order to restore practitioners’ confidence.
“The first measure taken by the bank is using its adapter to interface with the FMDQ platform, to enhance STP settlement of OTC transactions. The second step is the Bank’s interface with the DMO’s banking application system (BAS) for the bidding, issuing and allotment of government securities. The impact of these two measures has been great,” he said.
He recalled that globally, the treasury as a sub-entity of a financial institution had hitherto been a largely neglected area of banking, as most stakeholders considered the corporate treasury function as only a specialized aspect of the finance function, and gave it little attention.
Listing the areas that need automation in treasury management, he said cash management (cash positions, bank account reconciliation and cash flow forecasting); liquidity management (cash pooling, zero balancing and in-house banking); debt management (loan portfolios, mortgages and lease finance) and transaction management (deal input, settlement and confirmation) are important, among others.
For Mr. Akinsanya Olubosi of SERVE Consulting Limited, it is regrettable that amid an increasingly digital world, many businesses and organisations still persist with manual process that involves people, paper and time.
He noted that current global trend has moved to simplified processes- rationalisation and standardisation; new regulation and compliance requirements; increased focus on risk; importance of effective cash and liquidity management; and increasing globalisation.
According to him, the benefits of automation are ensuring centralised organisation with integrated systems; integrated system using central interfaces; auditable and compliant operations; low operational costs and strategic IT infrastructure; accurate and timely cash positions and reliable liquidity forecasts; and proactive approach to risk.
The Senior Vice President, Market Operations and Technology, FMDQ OTC Securities Exchange, Dipo Odeyemi, reiterated that treasury activities include providing performance and risk analytics to board and ensure accurate valuation of financial instruments.
Other activities, he said, are cash flow and risks forecasting; managing internal capital market by investing and lending to subsidiaries; interest rate and foreign exchange risks management.
Odeyemi, while speaking on the theme: “The Role of Process Automation in Achieving Efficient Financial Market,” pointed out that issues over lack of integrated trading system, hampers the treasury management operations.
