How FinTech Disrupts Working Capital Management? with Stefan M. Siesla and Gordon Mackenzie

πŸ’² We simplify Corporate Treasury Concepts - πŸŽ™οΈ From the podcast Corporate Treasury 101

How FinTech Disrupts Working Capital Management? with Stefan M. Siesla and Gordon Mackenzie

Working Capital Management-Discussion with IYORA Founders Stefan M. Siesla and Gordon Mackenzie Featured Image

Welcome to an insightful journey into working capital management and future-oriented financial technology, a realm crucial for businesses of all sizes. Today, we’re delving deep into the insights provided by two industry veterans, Stefan M. Siesla and Gordon Mackenzie, the founders of AYORA, a company carving a niche at the intersection of finance and technology.

Stefan, with his solid foundation in corporate finance and history at Bankable, brings a unique perspective to our discussion. His experience equips him with profound knowledge about the inner workings of financial institutions and corporate finance dynamics, making him a noteworthy expert in the field.

Complementing Stefan’s financial acumen is Gordon, a seasoned tech entrepreneur. His background as a clinical entrepreneur at NHS England empowers him to view financial challenges through the lens of technology, leveraging modern solutions to simplify complex issues.

The synergistic expertise of Stefan and Gordon offers an exciting blend of finance and tech perspectives. Together, they drive AYORA’s mission to revolutionize working capital management, making it more efficient, transparent, and manageable.

By reading this article, you can expect to learn

  • What Is Working Capital Management?
  • Why Is It Important for Companies?
  • What Is the Role of a Corporate Treasurer When It Comes to Working Capital Management?
  • What Could Be the Role of Ai in Working Capital Management?
  • What Is a Treasury Policy?
  • What Does AYORA Do?
  • And Much, Much More.

Let’s delve into the insights shared by our guests and uncover the strategies and solutions for successful capital management.

Understanding Working Capital Management and Its Importance

When we think about business operations, working capital management is a crucial aspect that often emerges. In the simplest terms, Stefan M. Siesla, the co-founder of AYORA, describes working capital management as a set of processes aimed at maximizing cash flow.

This aspect of corporate finance involves managing key elements such as inventory, customer billing, collections, and accounts payable to optimize cash inflows and outflows. Stefan explains, “The goal is to generate cash – the lifeblood of every company.” A well-structured working capital management strategy helps businesses maximize their organically generated cash. This, in turn, reduces the need for external financing.

But how do companies balance this careful act of managing inflows and outflows?

Stefan suggests it depends on the company’s nature and its cash cycle. Some businesses monitor their working capital management weekly, daily, and in fast cash cycle cases, even intraday. Anything in the balance sheet classified as short-term assets or liabilities (typically less than 12 months) usually falls under working capital.

But what’s the role of a treasury department in this intricate process? How do they contribute to effective working capital management?

The Role of the Treasury Department in Working Capital Management

The treasury department’s role in working capital management can vary, but typically, it assumes an oversight function. It coordinates closely with teams managing each strand of working capital, such as credit control, accounts payable, and procurement.

This is where Stefan’s insight from his vast experience in corporate finance shines through. “Treasury is the function that has the broader perspective. They understand how all these processes ultimately tie back to the company’s financing,” he explains.

It becomes clear, then, that the treasury department is the glue that holds these disparate yet interconnected processes together. The function keeps an eye on the bigger picture, ensuring the timing and balance of cash inflows and outflows align optimally with the company’s overarching financial strategy.

In this fast-paced, minute-by-minute dance of money coming in and out, the role of the treasury department in managing working capital effectively becomes paramount. And discussions like these help demystify the complex world of corporate finance, making it more accessible and understandable, even to those outside the finance industry.

Adapting Working Capital Management to a Changing Macroeconomic Environment

Our world has witnessed unprecedented changes over the last few years, with significant implications for how we do business. From a global pandemic to fluctuating macroeconomic trends and rising uncertainty, these changes pose new challenges and opportunities for treasury and finance professionals. In light of these transformations, how should they navigate the shifting landscape of working capital management?

Stefan, who has vast experience in the financial industry, provides some valuable insights. Given the rising capital costs in the current macroeconomic climate, he suggests that managing working capital efficiently becomes a crucial strategy to reduce financing costs. He explains, “If you can maximize cash on hand for your organic operations, you don’t need to access as much external financing, the cost of which is only going up.”

This means that companies can avoid high-interest rates affecting their bottom line with a well-managed working capital system. By maximizing readily accessible cash, businesses can fund their activities without borrowing money at steep rates.

But is this a once-in-a-lifetime situation, or can we expect these trends to continue? Stefan isn’t an economist, but his keen interest in the matter gives him a unique perspective.

He believes the future is uncertain, but some current factors impacting the macroeconomic environment are hopefully temporary. With geopolitical pressures expected to ease off, we might see a decrease in certain costs, such as energy prices. However, other trends like de-globalization and supply chain frictions may continue to impact our business environment.

The Broader Implications of Economic Changes

Understanding the broader implications of these economic changes is key for finance professionals. As Stefan explains, the shift towards de-globalization and the disruption of supply chains are closely related to commodity prices and substantially impact foreign exchange risks.

These trends are influenced by various interrelated processes, which may mean that we might live in a higher interest-rate environment for longer. So, finance professionals must adapt their strategies and be prepared for these challenges, making working capital management more important than ever.

The Rising Importance of Cash Flow Forecasting and Working Capital Management

Recent surveys have pointed out an intriguing trend among finance leaders. More and more, cash flow forecasting and working capital management are finding their way to the top of CFOs’ and treasurers’ agendas. But why is this happening, and what does it mean for finance professionals?

Stefan, an industry expert, shares his thoughts on this matter. Given the changes in the macroeconomic environment we’ve just discussed, Stefan doesn’t find this shift surprising.

He says, “Forecasting is a prerequisite to efficient working capital management.” After all, if you don’t know when you’ll need to pay your bills or expect money to come in, how can you plan your company’s financial activities optimally?

And it seems finance professionals are realizing this too. Stefan mentions surveys showing that while CFOs and treasurers agree forecasting is a top priority, many also think their organization is already doing it well. Some studies have even found that up to 80% of CFOs consider their forecasting process best in class.

Reframing Forecasting in the Working Capital Process

But Stefan believes more must be done, especially for larger companies. The next step, he suggests, is to stop seeing forecasting as a standalone process and start seeing it as an integral part of working capital management.

“What we’re quite interested in,” Stefan says, “is can you, for example, feed forecasting to be just a process feature?”

The goal here is to create what Stefan calls ‘objective-based forecasts.’ For instance, this could involve a smart Accounts Payable (AP) system using forecasting to achieve specific goals rather than creating a general-purpose forecast. This way, forecasting becomes an integrated part of the process, not a separate task.

Capital Management for Corporate Treasurers
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How Effective Are Current Working Capital Management Solutions for Corporate Treasurers?

Let’s dive into the world of corporate treasurers and look at the kind of help they are getting from tech solutions in the market today. Stefan shares the insight here.

An Evolving Tech Landscape

The technology scene is continuously changing. A bunch of interesting solutions are available for corporate treasurers to manage their working capital. Most of these solutions focus on seamless execution. For example, payment systems are designed to move money in and out of the company efficiently. Sounds pretty neat, right?

Stefan notes that this market is blossoming, with established players and fresh faces showing interest. It’s like a playground with different kids trying out various games!

Are These Solutions Enough?

So, we’ve got a lot of tools in our shed, but do they fulfill our needs? Stefan suggests it’s like asking if a wrench is the only tool we need to build a house. These tools are handy, but we also need to think about how we’re managing our working capital. It’s not all about making payments but how we handle processes within our company.

Imagine it this way: moving money from one place to another is like setting up a relay race. Each baton handover step is part of a much bigger process. We might find areas to add more value if we can tighten up these processes. And with technology, we might be able to control these processes even better.

Who’s Leading the Charge?

Is the old-timers or the new kids on the block making the most significant impact in this area? Stefan believes both have their place. The older, established companies are doing a good job, and some former startups are now seen as big players themselves. But the younger companies are also stirring the pot, trying new ways to improve things. It’s like watching a friendly competition, with each team bringing something different.

What Tools Are Becoming Outdated?

Remember when we all used floppy disks and thought it was the coolest thing ever? Just like technology in general, tools used for working capital management can also become out of date. One such tool, according to Stefan, could be accounts payable systems. These systems tried to digitize processes that used to be done manually, like email and Excel spreadsheets. But people are starting to ask if we need as much human input in these processes anymore. Maybe we can automate them and free up people’s time for more valuable tasks. It’s like asking if we need a person to turn on a light switch or if we can just set up a motion sensor instead.

Breaking Down Accounts Payable Systems

Now let’s break down this idea of accounts payable systems. Think about it as if you’re the person in a company that pays all the bills. You check each invoice, log into the bank account, and send the payment. But what if a computer could do some of that work for you?

Stefan mentions that while verifying invoices is a crucial human task, clicking buttons to make a payment might not need a person anymore. And how about scheduling payments? Companies often do “payment runs,” making many payments at once. But sometimes, this means paying a bill earlier than necessary. Technology can step in here and schedule payments at the optimal time. This way, companies can keep more cash and reduce their financing expenses.

Imagine it like having a personal assistant who not only reminds you to pay the bills but also knows the best time to make each payment. So you see, the world of corporate treasury is not just about the available tools but also about how we’re using them and how we can make the most out of every penny. Now, isn’t that a clever way to manage our money?

Role of Artificial Intelligence in Working Capital Management

Artificial intelligence (AI) is becoming a trendy topic in the treasury world. This popularity raises the question: How can AI transform working capital management processes? As explained by Stefan AI has immense potential to automate repetitive tasks and assist in decision-making.

From Automation to Decision Making

Just a couple of years ago, the primary function of AI was to automate simple, repetitive tasks, such as scheduling payments. However, technology has evolved significantly, as has people’s readiness to adopt it. This makes it possible to envision a future where AI aids humans in making decisions related to working capital management.

Instead of merely focusing on automating administrative processes, AI can help users understand various data points in working capital processes and identify efficiencies or inefficiencies. Imagine AI as a tool that enhances processes rather than just automating them. It’s an exciting future.

But let’s be real. Technology still has a long way to go, and there will always be a human element in these processes. However, we’re making strides, and the potential for AI in working capital management is immense.

The Future of Working Capital Management

So, where does that lead us for the next one to five years? According to Stefan, we’ll likely see more automation and technology-assisted decision-making. Solutions that automate appropriate processes will become more prevalent and easier to adopt. At the same time, companies will increasingly deploy technological solutions to assist with strategic or tactical decisions where automation may not be applicable.

Maximizing Cash Flow

To wrap up, let’s clarify: What exactly is working capital management? It’s about maximizing cash flow by optimizing your accounts payable (AP) and accounts receivable (AR) processes. This involves efficient inventory management, human resources, and other related aspects to achieve optimal costs and revenues.

Stefan also mentions the lesser-discussed aspect: working capital financing. Some solutions can accelerate your cash conversion using financial products. It’s an interesting area, but the focus of the discussion has been more on supporting people with organic cash generation than supply chain and working capital financing.

In conclusion, the role of AI and other technologies in working capital management is undoubtedly significant and growing. As we streamline and optimize our processes, these tools will become increasingly vital in managing our financial strategies.

What Happens When AI Manages Accounts Receivable and Accounts Payable Simultaneously?

If you’ve ever wondered what would happen when artificial intelligence (AI) takes control of both sides of the payment equation – the Accounts Receivable (AR) and Accounts Payable (AP) – you’re not alone.

During an intriguing podcast conversation, Treasury expert Stefan and his colleagues recently shed some light on this. The discussion centered on two AIs managing AR and AP in a business transaction. What would happen if these two AIs optimized their processes to instantaneous transactions?

The Power Dynamics and Trade-offs

Stefan emphasized that the dynamics of such a transaction would primarily depend on the power relations between the two involved parties. In a typical business transaction, the attractiveness of payment or billing terms becomes part of the value proposition one sells as part of the solution.

Therefore, it’s not as simple as it seems. The process involves a series of trade-offs and is more nuanced than it might appear at first glance.

Could AI Negotiate Payment Terms?

Hussam, one of the other panelists, pointed out that human interactions play a crucial role in such transactions. Trust and relationships are built in human negotiations, fostering mutually beneficial outcomes. The question then arises: could two AIs negotiate with each other and come out with a favorable outcome?

AI Negotiations: A Technical Perspective

According to Gordon, the team’s technical expert, this scenario’s feasibility depends on whether we’re considering “narrow AI” or “deep AI.” The former would work within set parameters, and negotiation could be included. But real-time learning algorithms would be in play when it comes to deep AI. These algorithms, driven by a system of rewards and penalties, would seek maximum reward, somewhat akin to a game.

Yet, a word of caution: setting up such reward-based systems requires careful consideration. If the system rewards the wrong behavior, things can go awry. For example, football-playing robots programmed to maximize ball touches ended up not passing the ball but continuously touching it, skewing the game.

AI Negotiations
Photo by Mojahid Mottakin on Unsplash

The Need for Regulation in AI Operations

Gordon added that using AI in such critical functions would necessitate robust regulations. The unrestricted pursuit of reward could lead to unfairness, requiring some form of regulatory oversight.

Stefan echoed this sentiment, pointing out that many large companies don’t stretch their payment terms vis-a-vis smaller firms despite their greater negotiating power due to perceptions of corporate behavior and stakeholder treatment. While financial efficiency is a big driver, working capital management considers more than just that.

So, is it possible for AI to manage AR and AP simultaneously? Perhaps. But as the conversation reveals, it would take careful planning, thoughtful execution, and robust regulation. After all, we wouldn’t want our AI to optimize so fast it leaves humans – and our economies – behind.

The Role of AYORA in Balance Sheet Management and How It Differentiates From Other Solutions

AYORA is a game-changing platform that takes the complexities out of balance sheet management. It presents a new and intelligent toolkit to aid CFOs, and treasury professionals in managing their balance sheets more efficiently. This insight comes from Stefan, one of the team members at AYORA.

Stefan explains that AYORA aims to understand the company’s balance sheet profile, provide contextualized feedback, and offer suggestions to enhance cash operations. The platform touches on liquidity and working capital, giving companies a clear view of their current and expected cash inflows. Initially, AYORA started as a liquidity platform to help companies maximize their existing cash. However, it’s now expanding its scope to support cash conversion.

How AYORA Distinguishes Itself

So, how is AYORA unique when compared to other solutions? It turns out there are several key differences. One major distinction is AYORA’s relentless focus on actionable insights. Where other solutions are great at summarizing large data sets and providing an overview, AYORA goes further. The platform is designed to offer actionable insights, serving more as an assistive tool than just a reporting one. It guides users on the best action based on real-time data, thus managing finances on the fly.

A second distinction lies in AYORA’s approach to ’embedded finance.’ This term doesn’t refer to embedding payment functionalities into apps but delivering financial management tools within user-friendly environments where professionals already reside. For example, most professionals spend much time on email or Microsoft Teams. AYORA believes that the valuable insights their platform can generate don’t need to live solely in their application but can be embedded in these everyday tools, making financial management more seamless and less intrusive.

AYORA offers a fresh approach to balance sheet management. Focusing on actionable insights and utilizing the concept of embedded finance offers treasury professionals an enhanced, more user-friendly way to manage their finances, something Stefan and his team are genuinely proud of.

How AYORA’s Solution Benefits Treasury Professionals in Managing Working Capital?

As per the discussion with Stefan, the co-founder at AYORA, there are significant benefits to be gained from the company’s solutions. The core advantage lies in how AYORA’s tools help professionals manage their working capital, provide real-time insights, and facilitate faster, more strategic decision-making.

Turning Data into Decisions

Have you ever been overwhelmed with data? In our rapidly evolving digital world, treasury professionals have access to an ever-growing stream of information. But more data doesn’t always mean better decisions. Sometimes, it can lead to “cognitive pressure” – a kind of overload that makes decision-making more challenging.

Imagine a flood of facts and figures coming at you. You must make quick decisions, but there’s too much to process. According to Stefan, this is where AYORA turns the tide by making vast amounts of data manageable.

“AYORA interprets vast amounts of data that keeps moving fast and pushing out patterns. Then we present these patterns to users in a digestible format and suggest what action might be necessary based on this new information,” Stefan explains.

AYORA’s tools help sift through the data storm, identify key patterns, and provide actionable insights. This makes the system proactive rather than merely reactive so that you can stay ahead of the curve.

Bridging the Gap Between Data and People

How can treasury professionals manage the processes better and maximize value? It’s all about making connections.

In the past, a lot of time was spent by decision-makers interacting with process teams on the ground. With more readily available information, the intensity of these interactions can increase. So, the challenge is to manage these interactions effectively.

AYORA aims to bridge these two worlds – the data-driven and the human-centered. Stefan explains: “We can help provide a bridge between those two worlds and help manage the processes in a way that maximizes value.”

By interpreting and presenting data in a digestible and actionable way, AYORA helps treasury professionals make informed decisions and enhances their interactions with teams on the ground. This creates a more streamlined, efficient process that maximizes value and improves working capital management.

How Has the Integration of Treasury Management Systems Evolved?

The insights from our guest, Gordon, paint a fascinating picture of the evolution and the current state of Treasury Management Systems (TMS).

The Evolution of TMS Integration

About 20 years ago, TMS began as simple desktop systems in the good old days. Like all software back then, they required a direct connection with a bank. What does that mean? Well, the TMS company and the bank had to establish a link.

But here’s the thing: this wasn’t smooth sailing. It didn’t use modern communication standards like we have today. Gordon mentioned something called REST, which stands for Representational State Transfer. It’s a fancy term, but all it means is a modern way for systems to chat with each other.

Sadly, back then, things were clunky. They used old-fashioned protocols. Imagine trying to have a conversation with your friend using only Morse code! One of these ancient ways was something called EDIFACT. Don’t worry about what it stands for; it’s just an old-school method that isn’t used much anymore.

Over time, some big TMS systems, like Kyriba, built hundreds of direct connections with different banks. This made them powerful because they could chat directly with banks in different places.

The Game Changer: Open Banking

However, in 2018, the TMS landscape began to change. This change was called open banking. With open banking, you didn’t need to create all those direct connections any more. Instead, you could use a single gateway, like a superhighway, to chat with many banks simultaneously!

This new method still uses the REST principles, so it’s like systems speaking a modern language. Open banking made it easier for companies to connect to many banks without building hundreds of direct connections.

It’s important to know that not all jurisdictions or corporate cases are covered by open banking, so sometimes those direct connections still come in handy. But in general, open banking has made things much easier.

Gordon’s company, for example, primarily uses open banking to connect. They fall back on direct bank connections when they can’t use open banking.

The Simplicity of APIs in Open Banking

But here’s another cool thing about open banking: it uses APIs, which stands for Application Programming Interfaces. In simple terms, APIs are like universal translators that help different software talk to each other.

Even better, companies came up that provided a single gateway to access as much open banking as possible. These companies, like Plaid and Klarna Kosma, make it even easier because you only have to talk to one API.

So, Gordon’s company only needs to use two APIs to get their open banking connectivity. That’s way simpler than the 500 direct bank connections they used to have to build!

How Does AYORA Connect to a Company’s Internal Processes?

The revolutionary open banking protocol utilized by platforms like AYORA allows treasury departments to streamline their processes, from external connections with banking partners to internal integrations with systems such as ERPs and EMSs. It might sound a bit complicated at first but don’t worry. Here’s how it works, based on insights shared by Gordon, an expert from the technology company behind this platform.

The Connection to ERP Systems

Enterprise Resource Planning (ERP) systems –software that manages and integrates your day-to-day business activities – are the main hub of your company’s operations. More modern ERPs use certain principles called REST (Representational State Transfer) and have their APIs (Application Programming Interfaces), which are like the “language” that different systems use to talk to each other.

They even have a handy set of tools called SDKs (Software Developer Kits) – think of these as magic toolboxes that make it easier for tech experts to connect different systems. All the company needs to do is give the AYORA platform a ‘key’ – essentially a set of credentials – and voila! A secure handshake is made, and the systems can start talking to each other.

“But what does this ‘handshake’ mean?” you might ask. Well, it’s a way for the ERP and AYORA to establish a secure connection. And once this connection is made, AYORA gets a token, like a special pass letting it access specific data from the ERP system. This could be anything from ledger entries to transaction histories.

Making the Process User-friendly

This might sound complex, but the beauty is that it happens automatically and doesn’t require the user to understand all these technical details. The treasury professionals and users won’t need to lift a finger. The system administrator handles the whole process and is responsible for setting up this connection. On the other hand, the users can focus on seeing their data and working with it without worrying about any technical details.

“But what if my company doesn’t have a fancy ERP system or TMS (Treasury Management System)?” you might wonder. Well, you’re in luck! According to Gordon, their platform targets companies still relying on old-school methods like Excel to manage their cash flow. It aims to solve the tedious and error-prone process of manual data management. If you struggle to integrate your ERP data with your bank transaction data, this solution is for you.

The less automated your system is, the more beneficial this platform could be. It’s an easy and user-friendly way to bring your treasury department into the modern age of technology.

Treasury Technology for Financial Insights
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Leveraging Treasury Technology for Financial Insights

Treasury technology has taken leaps and bounds in recent times, particularly in the realm of data insights. The talk by Gordon sheds light on the power of real-time connectivity, not just as a baseline function but also as a stepping-stone towards more value-driven insights.

Providing More than Connectivity

While real-time connectivity to all your bank accounts is essential, it’s only the beginning. According to Gordon, the real value lies in these systems’ insights beyond just alerting users about low balances. The focus is on maintaining adequate liquidity and unearthing opportunities to save and make more money.

How Does the System Work?

This technology works by identifying areas for potential savings and earnings. For instance, it might notice excess liquidity sitting idle in one of your many bank accounts. Usually, this might be difficult to spot due to the lack of crystal clear visibility over cash flow and forecasting. The system simplifies this process by bringing all the accounts under one roof, thus making the money much more accessible and manageable.

Exploring Investment Opportunities

Once the excess liquidity is identified, the system suggests various investment opportunities. For instance, it might recommend investing extra cash in money market funds, often providing attractive rates. In other words, it helps to turn idle cash into a source of income.

Renegotiating Payment Terms with Suppliers

Another way this system can help is by spotting opportunities to renegotiate payment terms with suppliers. By doing this, the business can improve its cash flow and possibly even cut costs.

Identifying Currency Exposure

The system is also designed to pinpoint significant currency exposure, which is the risk that a company’s financial performance might be affected by changes in exchange rates. It might suggest using hedging strategies to manage the risk in such cases.

Automating Insights

This whole process is automated, thus saving the treasury professionals from manually scanning the data. Think of it like having an editing tool for your finance. Just like an editing tool highlights potential improvements in a text, this system highlights areas for financial improvement. It analyses the data like a human would but faster and more accurately.

Enhancing Productivity

According to Gordon, the ultimate goal is to aid productivity by acting as a co-pilot. It offers ideas or suggestions like GitHub Co-pilot does for software developers. While treasury professionals still have the final say, this system brings the necessary insights to their minds. It helps them make the best decisions without getting drowned in data or decision paralysis. It’s all about empowering them to manage their treasury in the best way possible.

In the end, isn’t that what every Treasury professional wants? To be more productive, make smarter financial decisions, and ultimately save and earn more money. With technology like this, it’s all within reach.

Understanding Treasury Policy and Its Implementation in AYORA

Treasury policy is a significant tool for managing treasury functions, as per the insights shared by Stefan. But what exactly is this policy, and how does it help? Simply put, a treasury policy is like a guidebook that explains how you will manage your treasury.

What is a Treasury Policy?

Imagine you’re on a journey, and treasury policy is your map. It outlines a set of principles that guide your approach to managing treasury. Inside this policy, sections deal with various considerations for managing your cash and other treasury matters.

The treasury policy will clearly state:

  1. Your objectives: What do you want to achieve from your treasury management?
  2. Tools you have: The resources or techniques you can use to reach your goals.
  3. Decision-making process: The approach you will follow to make important decisions.
  4. Governance structure: The rules and procedures you’ll follow to manage your treasury.

But wait, there’s more! A good treasury policy also tells you how to figure out your treasury risk appetite. Remember, managing treasury is about balancing risks and rewards, just like balancing on a tightrope. A well-drafted treasury policy is your “North Star,” guiding your day-to-day decision-making. It helps you understand the risks you’re comfortable taking and how they relate to your liquidity profile, FX exposures, and counterparty exposures.

Implementing Treasury Policy with AYORA

You might be thinking, “How do I implement these policies?” Here’s where AYORA comes into play. AYORA allows you to weave elements of your treasury policy into its platform. It’s like giving the system a compass to understand your organization’s risk appetite. This way, AYORA avoids a one-size-fits-all approach, offering solutions tailored to your needs.

When setting up AYORA, the system asks you some questions. Your answers to these questions help the system define your risk appetite. This process saves you from the hassle of unnecessary adjustments or worries about less relevant aspects of your treasury policy. It’s like having a personal assistant that helps you manage your treasury more effectively!

But does AYORA only offer solutions related to working capital management? Or is there room for scaling up and further development? As per Stefan, AYORA currently focuses on its functionalities, linking them to your treasury functions. For instance, regarding the liquidity side of your treasury function, AYORA helps manage a set of liquidity and market risks. But, of course, there’s always room for improvement and growth.

Managing Bank Concentration Risk: Insights and Solutions

In today’s world, there are certain risks that we need to manage, especially when it comes to treasury. One such topical issue is bank concentration risk. It’s like having all your eggs in one basket. If the basket breaks, all your eggs could get cracked. Imagine the eggs are your money, and the basket is your bank. All your money could be at risk if anything goes wrong with that bank. That’s why this topic has gained a lot of attention, especially given the recent unfortunate incidents of three large banks failing.

Treasury expert Stefan shares some enlightening insights about this risk and how it’s managed at his platform AYORA. Let’s dive into the details!

Identifying the Risks

First, Stefan reminds us that risk management is about handling unexpected events that can spring up anytime. In his words, these events tend to come “fast and out of nowhere.” The risks we’re talking about here are the counterparty exposures – this means the chances that the people (or, in this case, the bank) holding your money might run into troubles, making it hard to get your money back. These risks could relate to the overall economic situation or new threats that occasionally arise.

How to Manage the Risks?

Most companies have a policy about how much exposure, or risk, they’re willing to take with a single institution. But what if they don’t? That’s where platforms like AYORA come into play. The platform helps businesses think about these risks, track their exposure to different banks, and alert them if the exposure deviates from their risk appetite. This gives them a chance to rebalance their risks.

But wait, there’s more! AYORA leverages technology to offer additional support. As a computer system, it’s great at churning out information like bank ratings and regulatory delegations. That way, you don’t have to think about it constantly.

Stefan leaves us with a noteworthy reminder – treasury is not just a big company topic. No matter how big or small a company is, it will inevitably have a treasury function. So it’s essential to think about these risks and opportunities. Remember, it’s all about maximizing gains while avoiding extreme risks – something machines are pretty good at!


Navigating the world of treasury is much like steering a ship through changing tides and stormy weather. The journey can be full of unexpected risks but also filled with opportunities. Whether it understands the link between macroeconomics and treasury, making the most out of working capital management or tackling bank concentration risk, the key lies in staying informed, vigilant, and proactive.

Our insightful conversation with Stefan and Gordon underscored the importance of each of these elements and highlighted the ways technology and innovative platforms like AYORA can simplify and optimize treasury functions.

For businesses, having a proactive approach to the treasury is essential. It’s about maximizing what you have and preparing for any potential setbacks. While the treasury function can appear daunting, especially with the evolving risks in today’s business landscape, remember that tools and resources are available to help navigate these waters.

Embrace the challenges, arm yourself with knowledge, use cutting-edge platforms, and never stop exploring opportunities. After all, effective treasury management is not just about surviving the financial storms but learning how to dance in the rain. Happy sailing through the world of the treasury!

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