In this interview, Christof Nelischer, Group Treasurer at Willis Towers Watson, looks back on his career and shares his insight on the treasury function including its challenges by answering the Fab 5.
Tell us about your career path and what particular experience has been most valuable to you along the way?
Originally, my first role was as a trainee commercial banker. While going back into banking might have been the obvious choice as my degree neared its end, I came into treasury quite by chance when interviewed for a position as the right-hand man of the newly-appointed group treasurer of Heraeus, a precious metals company in the Frankfurt region. I developed a passion for treasury, enjoyed every minute of the job I was doing, and that enthusiasm never ended.
Since then, subsequent roles have given me exposure across a range of different industries in different locations, and I have been able to put all those ideas to work at Willis Towers Watson. The common theme in my working life is that I find myself either building an all-new treasury function, or re-building an existing one. At every step of my career I looked at what, if anything, I had inherited, what was really needed, and how we could get from where we were to where we needed to be.
What is the biggest challenge you currently face?
Still, today I face a number of challenges relating to the 2016 merger between Willis Group and Towers Watson, many of which have been focused on the merging of two organisations that work with very different systems, platforms, and operating models.
Treasury has always grappled with the banking operations arena, which is, in parts, unfortunately not moving forward. It is mostly driven by the regulatory bureaucracy, tracking all of which makes life very difficult, and partly also by the challenges posed by the negative interest rate environment. This is having a damaging effect on cash management and we have long given up on expecting any decent yield. That aside, the operational aspect of the banking industry continues to be a challenge, particularly in emerging markets.
The quality in Treasury is not evident in the debits and credits, and I have always resisted financial metrics as performance measures for Treasury
I have also observed an increasing reluctance on the part of banks to execute settlements to or from sanctioned countries, or what the banks classify as such. Convincing banks of the legality of a settlement, while having a client waiting for his money, is now a frequent experience. It seems that banks reacted to past failings by establishing draconian compliance measures, which are hurting perfectly legitimate business.
How is the performance of your treasury group measured?
The quality in Treasury is not evident in the debits and credits, and I have always resisted financial metrics as performance measures for Treasury. Our treasury objectives and initiatives are derived by the strategic objectives of the firm. We are focused on delivering a best-in-class treasury function which understands corporate strategy and partners with the business to achieve common goals. I aim to reward behaviour that follows those objectives.
What takes up most of your time?
Today’s treasurers need to appreciate the importance of communication within and outside of the company. Much of my time is simply about managing expectations within the firm as well as among the banks and other internal and external stakeholders; and bringing all that in line with what I think is realistic.
How has technology changed treasury?
I view technology as an enabler that helps us get the most out of people, by working effectively rather than long hours, and avoiding menial tasks you do not need a human brain for but that a system is perfectly capable of carrying out. I believe in system-based process re-engineering that can enable this automated approach to creating an efficient treasury technology infrastructure.
One example I would like to cite, where system-based process re-engineering demonstrated its worth, was the introduction of European Market Infrastructure Regulation (EMIR) regulatory reporting on derivatives in 2014. Treasury dealt with this by working with a number of its software providers to ‘engineer’ an automated solution. We worked with our system providers to come up with a report out of the confirmation matching system and into a confirmed repository, and with a TMS provider and a dealing platform to feed correctly into the confirmation matching system, so that data moves to and fro automatically. The result is a 100 per cent matching rate; correctly configured, with no faults in the process, there is no exceptional situation that needs manual intervention, and it all works automatically. There is no error. We have not had a mismatch on confirmations since 2014.
Just for fun, what is your dream job and favourite team?
Group Treasurer of Willis Towers Watson and The German National Football Team – what else?