Corporate TreasuryEmbedding a treasury product mindset

Embedding a treasury product mindset

Anthony Wood, Revolut introduces principles that can help treasury teams move towards a product mindset that can be used to transform treasuries

By Anthony Wood, Revolut

Before we go any further, I have to admit I’m a hopeless romantic when it comes to startups, agile methodologies and service design. Only recently has my focus shifted to managing corporate treasuries in the fintech industry. In my previous article I talked about adopting a “product mindset” towards treasury. And, the more I think about it, the more I think true innovation in corporate treasury can only come from embedding a product mindset in your treasury team.

Problems in adopting a product-mindset

  1. Product mindsets conflict with traditional enterprise mindset
  2. Process orientation is prioritised against customer-centricity
  3. A lack of technology skills within treasury teams
  4. High level of risk and adversity towards failure
  5. Slow feedback loops that inhibit the organisation’s ability to monitor and track success
  6. Regulation and unscalable processes

In this two-part article, I reflect on my experience working in treasury for Revolut, and identify a number of principles that have helped us grow our treasury capabilities in-line with Revolut’s expansion in to six markets in the last year:

Have a long-term vision and tactics to get there

One of the massive competitive advantages startups have compared to their less-nimble incumbent counterparts is their ability to pivot, while moving at pace towards their game-changing aspirations. In a corporate treasury context, this means having a vision that aligns with corporate strategy, and that the entire team believes in. To get buy-in from executive management and integrate with the traditional enterprise mindset, first you need a vision that is unambiguous and well articulated (I quite like visions that are binary). Secondly, you need accountability towards achieving the vision. Thirdly, you need a plan – a series of tactics about how you’re going to achieve that vision. Finally, you need to know that you have the flexibility to change your tactics, so long as you are still working towards your long-term vision. The last point is critical – because as technologies and business priorities change, you need to know you have the flexibility to adjust your approach accordingly.

Developing the vision is the most critical aspect of this principle, and a vision that isn’t ambitious enough or changes too frequently will reduce your credibility with the executive team.

Become a customer centric organisation

Customer-centricity is something that is often attributed to the unprecedented growth rates of some of the world’s greatest startups such as Google and Facebook. While customer-centricity means something different in treasury contexts when compared to customer-facing organisations such as these, its principle still holds true when thinking about your way of working.

When treasury is executed using a process mindset, everything revolves around the process, driving behaviours within the team to execute that process and action diverges away from problem solving and towards process execution. It’s not difficult to see that this type of mindset will stem any innovation coming from your team; whether it be providing new services to customers or finding new ways to solve customer problems.

One approach that Revolut has taken is to create product-centred finance and treasury teams that focus on the customers for which they provide services – who at this stage are mostly internal teams. What this mindset-shift has done is forced our teams to think about ways in which they can provide services to their users. A recent example of this is the automation of the reconciliation of third-party spending for internal teams – ultimately culminating in the development of an API that internal teams call for each invoice received. This API takes invoices and invoice breakdowns; maps them to our own internal databases and bank transaction statements automating the end-to-end reconciliation process. The benefits for the finance and treasury teams are obvious (no more manual reconciliations), but also this technology has allowed internal teams to streamline their product development process for reconciliations. This is just one of many examples that demonstrate how Revolut’s treasury has a competitive edge against others.

Find talent that bridges tech and finance

When recruiting and developing talent in your team, you should be looking to develop a team that possesses a blend of technical and business skills to bring the most value to your business. Wayne Eckerson might have been the first to describe in this blog post in 2010 “purple people”, those with a blend of business and technology skills. From what I’ve seen in most treasury teams there are an overwhelming number of blue people (business), and very few red people (technology). If you can bring individuals who are able to combine the business understanding of finance and treasury with the ability to comprehend and manipulate data and technology enough to identify, develop and use technology to solve problems and improve processes, you’re already at an advantage over the majority of treasury teams. As an example, at Revolut one of our treasury operations managers developed a simple python tool that forecasted liquidity requirements in APAC to automate the calculation of funding requirements. Since that tool has worked so well the global team is working on scaling that for all regions into our Global Treasury tool.

Nothing good is ever easy, and hiring purple people is no exception. Purple people are in hot demand in every industry and especially in startup environments. Therefore to attract and retain the right people, you’ll have to make sure the culture you have in your team is designed to help these people thrive.

In this article I’ve introduced three principles that can help treasury teams move towards a product mindset that can be used to transform the way treasury is run and performed within your team. These three principles are at the heart of strategy, culture and team and I believe are the cornerstone of a truly innovative treasury function. Building and maintaining a product-oriented mindset that:

(1) gives you flexibility in the ways in which you achieve your ambition whilst tying in with corporate strategy,

(2) shifts focus from customs to customer and

(3) blends technology and business talent is not only likely to help improve your success as an organisation, but is more likely to help you attract and retain the best talent. Once you have the culture and mentality in place, the next step is to operationalise it in your organisation’s context, and that is the focus of part two of this article.

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