Treasury Management Consulting

TREASURY MANAGEMENT CONSULTING

Our suite of Treasury Management Consulting services incorporates the following:

  • Diagnostic analysis to grasp a clear understanding of the pre-existing procedures
  • Bench-marking of Treasury functions including the definition of scope, objectives and performance measures used in major treasury activities/ product lines
  • Assessment of treasury’s role based on the overall objectives, policies and vision of the bank
  • Definition of any new functional and organisational requirements based on discussion with top management, treasury and financial control

Treasury Management services includes the following:

Our Asset Liability Management (ALM) services are geared towards the following objectives:

  • Improved Regulatory Compliance
  • Enhanced Corporate Governance
  • Increased Shareholder Returns
  • Reduced Earnings Volatility
  • Enhanced Cash Flow and Fair Market Value Forecasting
  • Improved Asset and Liability Alignment

Our suite of ALM services includes the following:

  • Evaluation of existing methodology and applications
  • Evaluation and/or development of Asset Liability Management policies and organisational structure
  • Measurement and reporting of interest rate risk and liquidity risk
  • Establishment of control systems in order to define, monitor, and manage asset liability risks

We deploy analytics to glean information and insight from fundamental economic data such as currency prices, GDP and other economic indicators as well as treasury data such as foreign exchange data, transaction data, rates and spreads to deliver insights for stress testing, market risk management, fund transfer pricing, hedging and balance sheet strategy.

Our model validation process includes a review of the following:

  • Approval process for risk pricing models and validation systems used by the Treasury and Investment group
  • Accuracy of completeness of position data
  • Verification of consistency, timeliness and reliability of data sources used to run the internal models and independence of data sources
  • Appropriateness of volatility and correlation assumptions
  • Verification of the model’s accuracy through back testing procedures, if any
  • Documentation of model validation results

We assist financial institutions by providing quantitative measurement and management of portfolio risks and mandates to ensure adherence to portfolio strategies while limiting the risk exposure.

The portfolio risk estimation process incorporates the following:

  • Performance attribution analysis
  • Calculation of Expected loss
  • Estimation of Portfolio value at risk/economic capital
  • Marginal contribution analysis
  • Concentration analysis
  • Estimation of risk contributions of sub-portfolios or individual assets
  • Stress and scenario analysis

Treasury Audit

Internal Audit involves helping organisations achieve their stated objectives. The scope of internal auditing within the treasury department is broad and may involve topics such as the efficacy of operations, the reliability of financial reporting, deterring and investigating fraud, safeguarding assets, and compliance with laws and regulations. Internal auditing frequently involves measuring compliance with the entity’s policies and procedures. Recent global events have further increased the role of the Bank’s internal audit team, as such our support comes in handy and strengthens them, specially for auditing the treasury department.

Our Treasury Audit Offering

NeuralTechSoft uses a systematic methodology with a four pronged approach for analyzing business processes, procedures and activities with the goal of highlighting organizational problems and recommending solutions. Our team includes treasury experts who can identify the hot spots and recommend corresponding solutions to help achieve the objectives. With its rich academic and professional background, our team is best placed to advise to the Bank’s internal audit team, top management and the Board of Directors (or similar oversight body).

Our four-pronged approach consists of :

1. Preparatory Phase:

  • Creation of detailed checklists for ALM, Derivatives and Market Risk to cover the entire treasury department
  • Request for deliverables from the Group Treasurer and the Treasury Team like policy documents, funding and liquidity plans etc.
  • Past reports and system information
  • Obtaining a list of key people, their roles and responsibilities at various levels of execution.

2. Field Work:

  • Taking a comprehensive onsite presentation from the various department heads on the various aspects of their operations.
  • Request for deliverables from the Group Treasurer and the Treasury Team like policy documents, funding and liquidity plans etc.
  • Interaction with various teams involved in the risk taking activities.
  • Taking samples of transactions from the entire population.

3. Identifying hot spots:

  • Analysis and Assessment Phase
  • Analysis of important findings
  • Closely study to assess the completeness and robustness of the various management processes and systems.

4. Report Preparation & Submission Phase:

  • Presentation for the Board of Directors summarizing the findings of the audit process and recommendations.
  • Request for deliverables from the Group Treasurer and the Treasury Team like policy documents, funding and liquidity plans etc.
  • Submitting a complete detailed report of the entire process on a department wise basis enlisting the various findings and corresponding best possible recommendations.

A Treasury Management System (TMS)  (also known as a Treasury Workstation) is a term for a treasury-oriented system or software package that specializes in the automation of manually-intensive, repetitive steps needed to manage a company’s cash flows.  The system allows a company to efficiently communicate with financial institutions in order to manage cash, transactions, forecasts, FX, and even investments and debt.   The TMS can seamlessly interface with a company’s general ledger offering an instant financial dashboard.  The financial crisis has heightened the need for better transparency into a company’s cash positions as the traditional lines of credit have become increasingly scarce.  Through the proper selection, implementation and review of a TMS, corporate treasurers can efficiently respond to the financial needs of the company.