In an interview with Romy Tognon Ribero, Head of Group Treasury and Credit Management, Rexel, explores his primary responsibilities, key priorities, and significant milestones throughout a 15-year career in treasury management. Additionally, he addresses the prevailing challenges in the European financial sector and examines emerging innovations that are shaping the future of finance.
As the head of Group Treasury and Credit Management, what are your primary responsibilities and priorities?
As liquidity supervisor for the group and the entire order-to-cash chain, my main responsibilities are:
• to ensure that Rexel has enough liquidity every day and in the coming weeks to honour its commitments to all the stakeholders (suppliers and banks) and to make sure that our money is safe
• to help our company expand its sales, but to manage credit risk decisions as best as possible
• to disseminate and the best guidelines to our subsidiaries and ensure that they are fully implemented with our support.
I have many priorities; the difficulty is to sort them according to current events and challenges.
In general, I have three major priorities each year:
• Liquidity management: which means having a good relationship with the banks to find win-win solutions (for financing and investment), with the subsidiaries (to understand their needs, to propose efficient liquidity solutions – such as cash pooling, inter-company loans, etc...) and with my colleagues from other departments (as controllers who estimate and follow the budget in line with our treasury activity).
“customer satisfaction is key to our business, so I am fully involved in omnichannel digital activities supported by all innovative payment methods”
• Credit risk assessment: we have more than 600,000 customers and we mainly grant credit conditions. We must make sure that our customers will be creditworthy before granting a credit amount, we must build a strong relationship of trust with them and follow the whole chain until the payment and reconciliation. My priority is to help my subsidiaries in all of these important steps which can be supported by innovative tools, solid processes, credit insurance and, of course, passionate people in our strong internal community.
• Finally, customer satisfaction is key to our business, so I am fully involved in omnichannel digital activities supported by all innovative payment methods - a fantastic new world for me.
In summary, cash is still king.
What are the biggest challenges that are prevailing in the European Financial sector currently and how do you plan to tackle them?
High inflation, energy prices, tightening financial conditions in the market can lead to insolvency situations for some customers who are struggling to meet their commitments to their banks (after the government financial support expires) and consequently to their suppliers. This is my main concern in my treasury business this year - how to be sure my client will pay. Fortunately, we have the support of our credit insurers, and we are constantly monitoring the construction market situation.
Another challenge is the consolidation in the banking sector that might lead to fewer banking partners.
Despite the issues with Credit Suisse and SVB, we realize that we have a financial solidity of our bank pool, however we need to constantly evaluate our banking partners to make sure they will continue to follow Rexel in its various operations that are vital for the company: cash management, financing, securitization, etc.
The key is also to understand the emerging “fintechs” and how they could affect the banking landscape.
Please elaborate on the emerging innovations that will play a role in further developing the financial space.
I am certainly talking about things that have already been around for a few years, but I have in mind two important innovations that are fully present in my current roadmap.
• The first is the API: we increasingly need fast and centralised data in a single tool to enable operational staff to make consistent and effective decisions. Indeed, customers/suppliers expect quick answers and reliable information. Accessing and consuming data and services from many independent sources is essential for an organization like Rexel: an example is the credit management tool that helps our finance departments assess customer credit risk by receiving a lot of real-time data from financial information providers, insurance companies and our internal ERP and CRM.
Another example would be our ERP supplier database which is connected to our anti-fraud provider which constantly checks the consistency between the IBAN and the third-party identity. The API allows us to counter fraud attempts in real time.
• The second brilliant innovation is the instant payment: I am sure that this is the best way to pay a bill from the web, cheaper than cards (which are expensive for the B2B market) and more secure than a SDD for the seller. These faster payments, supported by open banking technology, make funds available to the recipient almost immediately, which is a good option for cash flow management. As the payment response can be linked to the initial request, account reconciliation can be automated. All these features improve the customer experience.
As you can see, digital tools are booming at Rexel and are helping to expand the business.
Finally, I realize that even the treasurer is starting to make the digital environment an essential part of his daily activity.
With 15 years of experience in treasury management, can you mention a few milestones of your career as a Head of Group Treasury and Credit Management?
My career as a treasurer started in 2008, when Rexel was smaller, and many processes were handled manually. I would say that my first step was the discovery of Etebac5 and the fax! Transfer orders were sent to the bank and foreign exchange transactions were confirmed by fax, I filed tons of paper at that time.
The second step was the implementation of a Treasury Management System, a payment platform and the setting up of a global and overlay cash pooling system: this allowed the head office to centralise all the subsidiaries' cash and to secure the money. Between 2010 and 2012, we focused on how to improve our working capital management: automatizing the processes was key.
The third milestone was in 2015 and it was the integration of the French subsidiary's cash management activity into the head office processes: my team oversaw the group's cash activity, but also the operational activity of a large subsidiary. At that time, I realised the importance of being in touch with the “ground”, the importance of understanding the operational issues, who our stakeholders are, how to generate Free Cash Flow, how to forecast it... a real headache for a treasurer.
The fourth step was taken five years later, when, in addition to the treasury scope, I took over responsibility for Rexel's credit management department. I can say that this activity has given meaning to my work as a treasurer because I see the whole chain from customer order to payment: how to choose the customers, how to onboard them, how to assess their creditworthiness and give them credit, how to collect the money and have it reconciled in our systems.
At this point, I can now start my native cash management activity!
What advice would you offer to young professionals who are interested in pursuing a career in the financial sector?
First, they must like finance, that's what makes people passionate. We spend a lot of time at work, so the first rule is to love the sector you want to work in.
Second, the financial sector is wide and is a beautiful playground: within each of the sectors there are several divisions (controlling, audit, treasury, credit management, consolidation, audit, accounting...), and it is not uncommon to experience different specialities within the same division. Once you have gained experience, you could move into other business areas. So, be patient and do not hesitate to explore the activities around you.
Thirdly, from the very beginning of their career, a person must be curious and not hesitate to ask why and how, they should broaden their horizons. If the curiosity is well-intentioned, this is a great quality and soft skill.
Finally, I am deeply convinced that the field of treasury is the best! So, my advice would be to join us.
