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The world of finance continues to evolve at a staggering pace, impacting nearly every aspect of the way treasurers do business. Market events and technological advances have transformed the discipline, resulting in both opportunities and challenges. Today’s treasurer must remain agile, not only optimizing working capital management for the organization, but also serving as a valued advisor to the management team.

The WF Treasury Takeaways Podcast brings subject matter experts together to provide industry insights, relevant best practices, and tangible go-forward strategies. WF looks forward to exploring key principles of treasury management for professionals interested in building their treasury knowledge.

Find us on Spotify under WF Treasury Takeaways

## The Evolving Landscape of Cybersecurity: Risk, AI, and Human Factor

Cybersecurity experts explore today’s most pressing digital threats and share practical strategies to strengthen your organization’s cyber resilience. Examine the evolving threat landscape—from ransomware and third-party vulnerabilities to cloud security and regulatory challenges—and discuss how organizations can proactively manage risk, respond to incidents, and build a culture of cyber awareness. With AI increasingly shaping both cyberattacks and defenses, we’ll also touch on how emerging technologies are influencing the future of cybersecurity and what that means for your organization.

### Listen to episode 13

Audio: Treasury Takeaways

### Transcript: Treasury Takeaways

>> Troy Scott [00:00:06] Good afternoon. I would like to welcome everyone to the evolving landscape of cyber security, namely risk, AI, and the human factor. Cybercrime's economic toll is exploding. We feel it's not only in our best interest, but in the best interest of every business and client we work with to continue to educate and help fight against these cyber criminals.

With that said, I would like to introduce our featured presenters for today's panel. First, we have Sarah Gosler, who is a globally recognized cybersecurity expert and managing director and head of cyber human defense at WF, where she leads the firm's human-centric strategy against sophisticated cyber threats through advanced simulations, training, and education.

We also have joining us Jude Sunderbruch, who is managing director at OakTruss Group, leading teams focused on cybersecurity and risk. He retired as a member of the senior executive service after leading the Department of Defense Cybercrime Center or DC3, one of seven federal cyber centers. He also served in varied roles as a special agent with Air Force Office and Special Investigations and in joint duty assignments with FBI, Cyber Division, and US Cyber Command.

Additionally, we have with us today Justin Ellerman, who is head of cybersecurity advisory services at WF, where he leads a team of experts, helping clients navigate the evolving cyber threat landscape through industry best practices.

Lastly, I'm Troy Scott. I will be moderating today's conversation. And I currently serve as the head of specialized industry segments for WF’s global payments and liquidity division.

The first topic I'd like to jump into the current cyber threat, landscape. Jude, let me direct this question to you, with cyber attacks reportedly affecting new companies almost weekly, how has the cyber threat landscape evolved over the past five years and what are the major and emerging threats organizations should be prepared for in the next three to five years?

>> Jude Sunderbruch [00:02:00] I think there really has been a shift underway. I think five years ago there was substantially more attention that was focused on data theft and probably less focus on what is the emerging threat, which is business disruption. And by that, I mean, it could be a ransomware attack. It could be an effort to shut down or harm a company simply by taking elements of it offline. And I think that is an evolution. From a national perspective, there certainly are criminal actors that are based in the United States, as well as outside of the United States. For those clients of WF, that may be in industries related to critical infrastructure, there is also the very real possibility that they could be subject to nation state level attacks. So this comes at the same time, that in some cases, companies are actually increasing sort of the size of what's known as the attack surface. And this is the ways in which these bad actors can try to hurt a company. So why is that? In some cases it's because you're trying to do innovative things for your customers, like integrating operational technologies, the internet of things, and also integrating artificial intelligence. And depending on how these are deployed, they can be a means by which actors can actually get into your system. And then do something that's called moving laterally, which is to get around and to create harm. That could be for the data theft, but it could also be to launch a ransomware attack or even to just try to shut you down. Similarly, the implementation of these blended situations, where sometimes companies have certain things that are located in servers and storage units where your company is physically located. And at the same time, there's companies that are transitioning to the cloud. When you have things in multiple locations, it increases the opportunity for misconfiguration. So we have some evolving threat actors and the technologies that companies are using has evolved. And together, that means that there's greater potential for operational disruption and also the possibility for data loss through theft.

>> Troy Scott [00:04:19] Great. Thanks, Jude. AI is a big topic that we hear in the industry a lot right now. So let me turn the question to you, Sarah. As cyber criminals increasingly leverage AI to enhance their attacks, how do you anticipate the emergence of AI will reshape how organizations approach cybersecurity to defend against these evolving threats?

>> Sarah Gosler [00:04:35] Going back a little bit into the threat landscape, in the early 90s, cyber was a government problem. There was the three-letter agencies that were focused on it. In the 2000s, it became a business problem, and now it's an everybody problem. And what's really perpetuated it becoming an everybody problem is the very fast acceleration of AI. It's interesting, it feels like only a year ago we were talking about Gen AI, and now we are, Gen AI is now old news and we're on to the agentic AI. Anybody using AI can figure out how to do open source intelligence, which means finding out a bunch of information on people very quickly. You can use an AI agent to create a prompt for a phishing email. So long gone are the days where it was a prince from a far off land with very badly spelled emails that was asking you for $10 million. And now it could be a very sneakily crafted email from your CEO directed to you with information that the attacker was able to get off of LinkedIn or any other site that's very, very convincing. And so cybercrime has just accelerated. There's a stat I like to talk about. The cyberattack occurs every 35 seconds somewhere in the world. And AI is continuing to speed that up. I would say within the next year, it's probably going to be close to like 10 seconds. So that that's a really scary thing to consider. But on the opposite side of it is how do we in cybersecurity leverage AI to keep us safe? So for every good thing, there's a bad thing. For every bad thing, there's good things. A really interesting example of how I can kind of make AI real is how one of the use cases for how we use it within the firm. Any given day, there's trillions of different data points coming in and out of the organization. And there's no way a human being could understand or could actively look into each of those. We use AI and ML to be able to look for correlated events, and so that could be as an example. If I badged and I'm sitting in New York right now. If I badge in New York at 10 a.m. And then I batched in in the Philippines at noon, that'd be something called impossible travel. We would use AI to be able to track that. So there's just a ton of different ways that we're going to use AI, to not only handle reactive events, it'll help us monitor, help us triage much quicker. But from a telemetry perspective, we're able to see across the landscape in real time in new insights in ways that were never able to before.

>> Troy Scott [00:07:13] Excellent, Sarah, thank you. Jude or Justin, any thoughts on that topic? I know it's a big one.

>> Jude Sunderbruch [00:07:17] I can build on that with some sort of recent examples we're seeing from clients and companies that we work with. And some of them are really, frankly, pretty scary. We've seen instances, just as Sarah indicated, where there is a very sophisticated social engineering that's taking place. We have also seen some things where that's been married with actual telephone calls that have been made as a complement to other activity, where calls are being made to people that are authorized to send payments around the world. We saw one recently where there was somebody who was speaking on the phone and they were about to authorize a multimillion dollar wire transfer. But the question was they weren't sure which of the accounts the CEO wanted it to be transferred from. And the attacker did not know that there were multiple accounts. So the person that was going to do the wire transfer manually went and checked. And that was where the plot became unraveled. So that's pretty frightening that things like that are happening and it's a good indication of how attackers are using AI. I think as a counterpoint that I agree with what Sarah said that there's definitely opportunities there to use AI to try to create stronger defenses.

>> Troy Scott [00:08:34] Thank you, Jude. Justin, when an organization suspects a cyber incident has occurred, what are some of the best practices and are there things an organization can do now to better be better prepared?

>> Justin Ellerman [00:08:45] I think when it comes to cyber attacks, making sure that you have an incident response plan in place is really one of the most important things an organization can do, because when you're in the middle of responding to an incident, you don't want to be trying to figure out what systems you need to take down, who is going to be making decisions, who you need engage. But really, if you were an employee and you identified something potentially malicious, you want to make sure it's reported to the right team. So engaging your incident response team. And then making sure that your legal team is involved. They may be internal, external, or both. Also, many organizations have cyber insurance. So you'll want to be engaging your cyber insurance firm as well because there may be specific steps that are stipulated by your policy that you need to take within a certain timeframe of identifying a potential incident. And then of course, you know, if there's anything financial related to the attack where there's fraud involved, making sure that you are engaging your financial institution, and then also law enforcement like the FBI through their IC3.gov website or the Internet Crime Complaint Center. But making sure that, you know, you are following all those steps in your incident response plan. And if that incident impacts services or products delivered to customers and clients, making sure you have an incident communication plan as well. Because history shows that, you know, if an incident is impacting your services, organizations weather the storm much better when they are transparent and open about the incident and what steps they're taking to get things back online. Some of those best practices include practicing that incident response plan. So make sure you're running through that plan and accounting for the most frequent or likely scenarios.

>> Troy Scott [00:10:34] And so Jude, I know with your background and what you've seen in your career, what are the main considerations organizations should think about in preparation for ransomware attacks, including whether or not they should pay those ransom?

>> Jude Sunderbruch [00:10:46] Well, obviously, you want to do everything you can to have a strong cyber security program so that you reduce the possibility that that you'll be subject to a ransomware attack. But unfortunately, it can happen. Companies and organizations are faced with difficult decisions about whether to pay ransomware, primarily when they do not have backups. And so there's some some sort of simple ways to think about them. One is what's known as a 3-2-1 strategy, and so this would be to have three copies of your data in three different locations using two different storage applications and then having at least one of them be something that's called immutable, and immutable is just a big word that means that you can't alter that backup. Now, how you do that of having copies of your information in multiple places can really depend on the company, right? So if you have a, if you're a relatively small company and you have an on-premises storage, you nonetheless want to try to have backups that are located somewhere else. So if your a really big company and you're processing millions of transactions, you're probably going to be having very, very sophisticated backups in multiple locations anyway so that you can instantly spin back your capabilities. The reality is, is if you are backing up consistently in multiple locations, the odds that you will be able to decide if you're going to not pay the ransom are much, much better because you're just in a stronger position because you can bring your company back online. Now that leads to the next point which is making sure that you can get your company back online. The configuration of storage can be quite complex and you want to practice several times a year and doing that will make sure the confidence that you're going to be able to bring your company back up online without pain. In addition to all that you really want to have a ransomware response plan that is consistent with the best practices for any kind of incident that Justin and Sarah were already speaking about. The next consideration is, does the threat actor have a reputation for keeping their word? And if it's one that does not have a reputation for keeping their word, then you might as well keep your money and figure out another way to bring your business up. This is a bit of a technical point, but I'll note that there are some ransomware actors that are in countries that are prohibited through an office called OFAC, the Office of Foreign Assets Control, and it can actually be against the law to pay a ransom to entities located in those countries. And then the final thing, does the threat actor actually offer like a proof of life? If the ransomware actor can show you a piece of data that only somebody would have if they'd gotten inside your system, that unfortunately is a pretty good case that they actually have broken in. I would say that there's a few other points that are important, and it all comes down to preparation. You want to have a relationship with a law firm specializing in incident response and have a relationship with a company that focuses on incident response prior to this if you don't have those capabilities in-house. In a lot of cases, you're going to partner with another company so that you'll be prepared to turn to them for support if something happens. Why do you do that? Some of it's because they're going to have access to ransomware negotiators. Some of that's, they're going to be there just to do those things, like figure out if they really have your data through the whole proof of life thing. And if you decide that you're going to have to pay, they are the ones that help you do that. And then finally, there will be people that can help you called a payment broker, and a payment broker is somebody who figures out a way to pay in Bitcoin or another cryptocurrency usually. So you're not actually giving your ECH routing data to the bad guys, which opens you up to a whole range of other difficult things. All these pieces together, it's planning ahead, it's having a plan, and it's testing that plan. And if you do that, the odds that you're going to be able to get through, avoid ransomware incident are much higher. And if unfortunately you're faced with it, the odds are much better that you going to get through it with minimum disruption. I just say the final note would be to build relationships with law enforcement before you need them. In many cases, the FBI, Secret Service, and local law enforcement, they can be there and they're available to speak with. And in a lot of cases, depending on the sophistication of the ransomware actor, it's a good idea to have those connections in place so that you can consult with them as a complement to what you're doing with your incident response provider.

>> Troy Scott [00:15:15] Great. Thank you, Jude. That's a lot of good information. You know, one of the other risks we see is third-party risk. So, Justin, over the years, some high-profile cyberattacks have been the result of a third party or third parties or vendors. How has the risk evolved over the last five years and what steps could organizations take to help mitigate their third party cyber risk?

>> Justin Ellerman [00:15:36] Yeah, I think when you look at an average-sized organization who have probably thousands of third parties or vendors that they rely on to provide them services, right, there's a lot of failure points. And when you look at a organization who is a third party, and if they don't have the same level of cybersecurity controls that your organization requires, and they have access to personal information or any other confidential information that your organization has, then they automatically become the weakest link, because if they have that access to that data, but they're not doing everything that they should be to protect it, then they become immediately vulnerable and a weak spot in your organization's cybersecurity. So making sure that you are performing due diligence on all your third parties and taking a risk-based approach. And so making sure you're assigning a criticality level to all those vendors and that it's not enough just to do your initial due diligence when you're onboarding that vendor but you're doing it on a recurring basis so maybe your critical vendors you're assessing them every year and your high-risk vendors every two years because you know, if you just do a point in time assessment of their cyber security controls, and you don't look at them again for maybe three or four years, well, the cyber threat landscape changes, the threat vector changes, the current cyber security standards change over time, and we're constantly looking at maturing the controls we have in place to mitigate the evolving threat landscape, and also identifying what third parties may have been reportedly impacted by a cyber attack and reaching out them and engage them to make sure that your organization's data wasn't impacted as well.

>> Troy Scott [00:17:19] Thank you, Justin. Sarah, I know you've got a strong background in this area, so I wanted to direct this question to you. With every organization trying to achieve more with less, what areas of cybersecurity should organizations focus on to maximize ROI, especially when trying to support for non-technical executives.

Speaker 3 [00:17:38] I think cybersecurity budgeting 101 is make sure that you're partnering with the non-technical executives, the C-suite, the heads, the lines of business. To understand the value-add of cyber. Cyber security, I think a lot of times can be seen as a blocker, but when cybersecurity is done well, it's actually a business enabler. And so having those conversations, and I'm going to assume that most folks on this call are not technical, they're on the business side, it would be engaging with your cybersecurity and tech teams to understand that value that cyber is going to drive. So that's step one. Step two is knowing that it's not a completely open pocket book; you have to prioritize. First thing you should prioritize is understanding exactly what are your organization's crown jewels. What are the top 10 business services that you might have that if there is disruption it could be incredibly impactful or even in some extreme cases gain more for your organization. That's where you want to begin your focus and then build out from there and then you'll be able to figure out where your budgetary limitations are. Outside of the Crown Jewels, I think it's also some lower hanging truth. Patching. Patching is very important. Think of it as simply as if you aren't patched, you're leaving your front door open. And bad actors are constantly looking for different ways in and where are the critical vulnerabilities and make sure you're addressing them. Some other pretty easy to implement things are multi-factor authentication. Multi-factor authentication, when managed well, prevents about 99% of automated attacks.

>> Troy Scott [00:19:18] Excellent. Justin, any thoughts on that as well?

>> Justin Ellerman Yeah, where you can see some of the biggest ROI is training your employees. Historically, employees have always been referred to as kind of the weak link in the cyber security chain, but really they can be leveraged as that first and last line of defense where those nine out of 10 cyber attacks involve phishing emails in some form or another. So those phishing e-mails are going to your frontline employees, making sure that your employees know how to identify a potential attack and, you know, also just as important how to report it to the right team so then they can take action to limit the impacts to the organization and really it doesn't cost a ton of money to deliver training to your employees on the latest attacks.

>> Troy Scott Thank you, Justin and Sarah and Judy.

Speaker 5 [00:20:06] Global Treasury Management Products and Services are provided by WF Bank, NA. WF Bank, NA is a bank affiliate of Wells Farco and Company. WFbank, NA, is not liable or responsible for obligations of its affiliates. Deposits held in non-U.S. Branches, subsidiaries, or affiliates are not FDIC or CDIC insured. Deposit products are offered by Wells-Fargo Bank NA. Member FD IC.

## Corporate treasury strategies in an uncertain tariff environment

The new and changing tariff environment will have significant impacts on many aspects of corporate finance and treasury functions. Join WF experts for a podcast on the impact of tariffs on corporate treasury and trade finance. The discussion will include payment and liquidity strategies that companies can deploy to mitigate risk and succeed in a tariff environment and best position themselves for the risks and opportunities that tariffs create. Also discussed are tariff-related procurement volatility, strengthening supply chain and improving liquidity with sophisticated trade finance cash flow tools.

### Listen to episode 12

Audio: Treasury Takeaways

### Transcript: Treasury Takeaways

>> Mathew Obergfoll [00:00:02]

Hello and welcome to the Treasury Takeaways podcast. My name is Mathew Obergfoll and I'm the head of middle market at WF for Global Payments and Liquidity. For this episode, I'm happy to be joined by Derek Luksun and Nelson de Castro. Derek is head of international sales within Global Payments& Liquidity, Derek leads the development and growth of treasury management for Wells Faro in Canada and EMEA. Also joining us is Nelson de Castro. Nelson is the National Manager for International Trade Finance Solutions at WF. Nelson leads a client-centric team located in North America focusing on assisting our strategic commercial banking clients based in the USA and Canada. So let's get started. Derek, let's start with you. We've been hearing a lot about changes in forecasts and a bit of unpredictability in the markets right now. Can you help address those dynamics and how companies and treasurers can adapt to the environment?

>> Derek Luksun [00:01:02]

What we like to share with businesses is that the only constant we know is gonna be change, right? And so how do our businesses think about adapting to that change? It might be a change in one direction today and another one in tomorrow. And so part of our advice and part of, you know, what we talk to our customers about, the best way to do that is to build agility and to build a plan around approach and to account for what those impacts might be specifically to your business. And so today, looking forward to being able to dive into some of the areas. In which we believe customers and businesses should be thinking about in this changing environment and changing trade environment.

The first thing that we recommend is to do a stock on how might the changes impact your cash conversion cycle within your business, right? So what we're seeing across different businesses that could mean a higher input cost, reduced revenue, higher administration costs. Or the impact of longer custom processing time due to backlogs or a longer travel time to impact inventories or realization on revenue. So these are things that will impact each of your businesses differently, but building an understanding of these are the levers that are potentially at play, and then the impact on how that impacts your cash convergence cycle is really important. When we take that a little bit further, you know, what businesses are thinking about, and they're trying to find efficiencies in their business. We were recently speaking with a customer who's the main focus coming down from the CUN for the board is how do we find efficencies in our business, regardless of the changes that are happening in the overall trade environment. And this is a real focus from a treasury perspective is how are you extending your days payable outstanding or reducing your sales outstanding to drive that more efficient cash conversion cycle. And so from a payments and liquidity perspective, what we're hearing and what our customers are trying to look at is, for example, things like taking a stock of all your current suppliers. How are you paying those suppliers? Are you using channels that maximize your ability to extend the payable terms that you have in place with those customers? Historically... That might look like using a credit card for part of your purchasing program. And you might've historically had recipients that were being unwilling to accept those payment channels. But in this new environment, with the ability to potentially pay slightly sooner, with the abilities in your currently renegotiating contract, that could be very much now a possibility that your treasury team could look at your payables outstanding within the organization.

And not too dissimilar from a receivable standpoint, being able to add automation and apply payments faster could be something which also improves and releases cash faster back into the business.

As we move on from there, we see businesses thinking about how do you get better visibility? You know, we've seen from recent studies from the International Chamber of Commerce that the number one concern for businesses around tariffs was increased cost. And the impact of those costs are best seen having visibility and having the right forecasting in place. So here, customers are thinking about, do we have the right tools to have near real-time reporting on our transactions and our cash flows? And is that efficiently feeding into the systems that our teams are building to get that view on the impact on their business? And so what does that mean from a treasury perspective? I think here, what we see business thinking about is as we look at repricing goods and services, are there opportunities to... Have different terms that we had historically, had different pricing as we go to new businesses? And then as well, do we have the right tools to support that type of engagement? Are we able to affect or make payments and receive payments into those new areas that we're going to? And do we the right plan in place if it so needs and may not be immediately needed, but for us to respond quickly to those types of decisions as a business within a treasury function.

The next thing that I'd like to quickly touch on is the idea of liquidity and account structure. I use an example here recently we were talking with a customer that had historically realized most of its revenue in the U.S. But had a supply base with Mexico and Canada. In this case, in the current environment this company was doing a couple things. First, we talked about managing price. They went to their customers and said we are going to pass on the impact of the price. But they also here realized that they would likely start trying to source more materials domestically in the US. As part of that, they need to evaluate, do we have the right liquidity pools in place that had historically, the levels of cash they kept in specific regions would need to adapt to the business strategy that they were deploying within their organization.

And as well, when we think about this, you might now also then start considering about, are we holding new or different levels of currencies as a business to order to meet these needs? Also now could potentially be accounting for larger shocks in need of liquidity to pre-buy inventory or because you're having to extend as you wait for receipt of payments within your business. And when we think about those impacts and it might be holding additional currencies or it might hold currencies for a longer period of time, that's where we start to see customers thinking about the changing effects. Of their payment mix and their liquidity and managing that rate environment. And here we're encouraging that to be a conversation with the experts in that space to understand how that could impact your business.

And finally, one of the areas that may not be top of mind but is really critical for our customers is to consider the risk and fraud impacts these types of decisions or these types changes might introduce. So when we think about this and some of the things I've talked about where you might be affecting. New payments to new suppliers, or you might be entering new regions. What that introduces to your business are risks around ensuring you have the right payment information for these new vendors. You have the right controls within your business to ensure that the right payments are going out, and you have the visibility to track that into new markets that might present new risks or new concerns.

And so overall, when we think of this, and I appreciate being able to share that there are a lot of areas that we believe the treasury function has an ability to plan for, create action against, and create agility within your functions to help address the changing environment that we see here today. And so as part of that, I'd like now to pass on to Nelson to give his perspective from a trade perspective.

>> Nelson de Castro [00:07:47]

Thank you, Derek. There is, you know, important strategic thinking going on at both the ownership and C level management of our clients, especially privately owned companies in US about the new trade tariffs, about the supply chain and how it all is impacting their procurement decisions and strategy in both 2025 and 2026. More specifically, higher probability than ever of supply changes from China to other APEC countries, as well as how to make it happen in a consistent basis when you make these changes and at the same time mitigate the domestic and international trade risk. It comes with such changes in procurement. We see the dramatic change in procurement from China to other countries around the world but more specifically where we see significant increase or deviation from since the first Trump administration in 2018 there was increased procurement for both the European Union as well as Mexico and Canada in particular.

Equally important and top of mind of many of the business owners and management that both myself and my team are very actively interacting with every day, every week this year, is how to improve the working capital while at the same time building new relationships with key suppliers in alternative Southeast nations, especially countries like Vietnam, Malaysia, Thailand, Cambodia, Brunei, and Philippines. We're seeing a lot of movement of procurement now moving from China to these countries as opposed to Mexico in particular, and some other countries. Similar story going on with hundreds of companies. We have the honor to serve service with active suppliers and our clients in Mexico that are considering to take action and expand supply chain moves to other Latin countries, such as Brazil, Colombia, Chile, Argentina, and Uruguay, just to name a few. So again. A lot of procurement are going on, not just from China, Canada, and Mexico, but many other countries that sometimes we are not mentioning in these conversations and these discussions, but a lot of change is going on. In other words, they have international accounts payable on to your balance sheet. And WF is fully committed to engage in a system to strategize out to consistently make these supply chain moves from China or other countries to countries where perhaps there are trade agreements, especially in the short term, that are more beneficial, while at the same time mitigating the trade risk that occurs when you change your supply chain, where you change your procurement, and hopefully improving the DPO, also known as the Days Payables Outstanding, try to extend your DPO as much as possible as you change the supply chain. And again, conversations with new suppliers are taking place at least with the thousands of clients we're interacting with at WF.

And top of mind with our clients management is how to properly, again, mitigate the trade risk no matter if it's political, economic. Or trade payment related. Equally interesting, many of our clients with annual sales, especially between $100 million and $700 million, are now looking at current trade policies, not necessarily as just a risk, but as an opportunity to grow out your business further in 2025 and 2026. Key points we are seeing and talking with our clients, specifically the strategic minds of their leaders, is could reciprocal tariffs potentially open up markets to sell or export U.S.-based products and services like capital equipment or technology equipment that in the past faced 50 percent to 100 percent tariffs to sell their goods into countries like, for example, Brazil. Or even Germany, which is obviously, we all talk about European Union, but the reality is Germany is the key trade partner with the U S where we have a significant deficit or even India. So again, top priority is to assist our clients navigate the storm and fully engage with trade finance tools as much as possible, plus obviously know how to best assist growth at a time of a lot of volatility and risk by hopefully not just changing the procurement and changing the supply chain on the procurement, but potentially to grow the business by selling more and exporting efficiently to other markets that perhaps you have not considered in the past. As reciprocal tariffs are put in place or negotiations take place, or perhaps new trade agreements are agreed upon, like for example, the recent trade agreement with UK and potentially a few more agreements coming up with countries like India, our commercial banking clients are seriously considering changing payment terms to best mitigate trade risk and improve working capital. What do I mean by these? Most US businesses are still selling or buying in US dollar where some folks would argue that if you wanna grow your sales, you may have to consider being a little bit more client-centric and selling in a local currency. And by the way, you know, US is in best position to mitigate that foreign exchange risk, as opposed to giving it to your supplier or your potential client internationally that may be with a smaller bank or with an economy that is not as sophisticated and market leader as the US.

No one really feels comfortable or can predict what is going to happen next week, tomorrow, next month, so it's best to join forces, you know, brainstorm the strategy, what are you trying to do, how you could potentially use these as not necessarily a deficit to your business and your company, but potentially as a way to grow the business. So again, thank you for listening to us, and we really look forward to further engaging With you with that said, Mathew, may I give the word back to you?

>> Mathew Obergfoll [00:14:08]

Thanks, Derek. Thanks, Nelson. That was incredibly insightful. Sincerely appreciate the time and the insights that you both shared today.

>> Disclosures [00:14:18]

Global Treasury Management products and services are provided by WF Bank, N.A. WF Bank, N.A. is a bank affiliate of WF & Company. WF Bank, N.A. is not liable or responsible for obligations of its affiliates. Deposits held in non-U.S. branches, subsidiaries or affiliates are not FDIC or CDIC insured. Deposit products offered by WF Bank, N.A. Member FDIC.

## ISO 20022: Enhancing payments through standardization

In this special edition of the Treasury Takeaways podcast, Olu Adebiyi and Angelica Alam from WF dive into the transition to ISO 20022, a transformative standard for financial messaging. They explore the benefits of richer, more structured data, including improved reconciliation, enhanced risk management, and greater operational efficiency. The conversation highlights how ISO 20022 fosters global interoperability and supports straight-through processing, with the goal of simplifying payment systems for institutions of all sizes. The episode also outlines WF’s proactive approach to supporting clients through this transition with industry collaboration, robust testing, and dedicated customer support.

SDI-GPL

### Listen to episode 11

Audio: Treasury Takeaways

### Transcript: Treasury Takeaways

Olu Adebiyi:
Hello, and welcome to a special edition of the Treasury Takeaways podcast. Today, we will be discussing the transition to ISO 20022, commonly referred to within the payment space simply as ISO. I am Olu Adebiyi, the managing director and product executive with WF's global payments and liquidity business. And joining me today is Angelica Alam, who is the head of correspondent banking and clearing at WF. Thank you very much.

Let me start with a brief overview of ISO. ISO is arguably the most important payment initiative happening right now as the global financial industry aims to replace proprietary message formats with a standard format with defined data elements. Because of the consistency of formats and structure, ISO 20022 components are also reusable in other platforms enabling payment systems to customize data elements to meet their unique needs and ultimately improve the flow of payments and the information that goes along with the funds. So Angelica, can you please give a broader overview of ISO and how you think it will impact businesses?

Angelica Alam:
Absolutely happy to, and it's great to join you on this series, Olu. I think this is a very exciting time for the industry. ISO 20022 is something the industry has been focused on for quite a bit. And we're starting to see the fruition of this industry initiative in the sense that we're coming towards the end of some pretty big migrations. We're gearing towards Fed ISO and coming to an end of the Swift coexistence at the end of November. So ISO as an initiative is really exciting. You can think of ISO 20022 as a global standard for financial messaging. It really defines a common language for exchanging financial data, including payments. And embedded in the strategy are so many different benefits that we're going to start to realize here very soon as we start to come to an end of these migrations across the different regions.

Olu Adebiyi:
Well, look, it sounds very exciting and I love that we're almost at the end of this, but a lot of people want to know what are some of the benefits of this transition. So what do you think the most important benefits of the transition to ISO standards are?

Angelica Alam:
Yeah, I think that's a great question. I would say one of the biggest benefits is the standardization of that data. The data being more rich, the data being more structured. If we think about a financial payment, the payment is a financial message. And the more rich that data is, the more structured that data is, the better that data can be used across many different use cases within an institution. So I would just say the better use we can have of our data and the better organized that data can be, there are so many different benefits to that.

Olu Adebiyi:
Yeah, it sounds like everything nowadays tends to be around data and I always joke with people to say if you pay your utility bill but you haven't told your utility provider a reference number or something that they can use to reconcile that payment, then have you really actually paid it? So it sounds like ISO will help with that process and really help the funds flow along with the data to make it easier for the recipient of that payment to maybe reconcile it in a better way. That's one of the key things that I'm getting from this. Angelica, would you agree with that?

Angelica Alam:
Yeah, absolutely. 100%. There's so many different use cases of using data, usability of data, and so the richer and the more standard across the globe this data is, the better the data can be ingested and the better that data can be used. So yes, in that example, that's absolutely one of the benefits of ISO 20022.

Olu Adebiyi:
And also, you know, when I think about the costs associated with being able to digest different types of payment messages, carrying on with that example of the utility provider, or maybe just a business trading and selling to different customers or different clients. ISO sounds like we're trying to standardize the type of messages or the structure of the message that comes through. So if you're using different payment instruments, you can build the processes on your side or on beneficiary side to be able to run the reconciliation in a consistent way, whatever the payment type, is that another sort of benefit having one way of digesting all your incoming payments?

Angelica Alam:
I would say yes, and one of the elements of that that I think makes ISO 20022 unique and effective is that it's really an agreed upon industry standard. And so in it being an agreed upon industry standard, then we're going to start to see an increase in interoperability, but then you're also going to see an enhancement to efficiency as institutions now start to communicate with one another in a way that's standard globally. And so, absolutely, the structured nature of being able to share this data interoperably globally is really going to have many different efficiency gains across the board.

Olu Adebiyi:
Fantastic. One thing that we always think about when it comes to payments is the risk side. We always want to make sure that we're sending it to the right person or the right people or company and banks and financial services companies have a lot of responsibility in making sure that these payments are compliant with whatever laws of the land may exist at that period of the time but also that the risk-side is being monitored. Are there benefits of ISO when it comes to risk and compliance of these payments and what do you think some of those impacts could be?

Angelica Alam:
When we think about risk in the payment space, it's something we take very seriously. When I think of ISO 20022 and the impact of that, again, net benefit, right? Now that we have the ability to enhance some of these data elements with more quality and enriched information, then that really is going to flow through that payment ecosystem in a way that provides data that is easier to track, which is absolutely important in the payment space. We all have regulatory requirements that enforces our ability to capture data, pass it through efficiently. And so, the expanded data elements within ISO and the quality of the data allows you to really risk mitigate in having more data to make better informed decisions and to do that in a much more transparent and in a faster way really because now that the data is structured, then it's easier to track this data across the ecosystem. So there will be many benefits in the risk space to having this more structured interoperable data element.

Olu Adebiyi:
That sounds very interesting and when I think about that, Angelica, it sounds like we may end up in a place where we have fewer calls from the banks to the sender of the payment asking for clarifications or asking for different elements of the payment that might have been missing. Is that a more practical way to think about some of those benefits that you've mentioned? Fewer callbacks, more reliance on the structure of the payment to enable better straight-through processing?

Angelica Alam:
Yes. Everything that you just mentioned will be a net benefit, not just operationally, but also in reducing what you're describing, which are false positives. Today, we see quite a large amount of false positive, which just means there was data within the instruction that triggered an alert, and then you have to do what the industry calls an RFI, which is a request for information. That could be a pretty lengthy, costly process for institutions. And so now that you have richer data in a structured format. In many cases, you would hope that you can clear that false positive because you have the data to validate. And so yes, that is going to be one of the benefits as an industry that we'll be tracking when it comes to efficiency operationally and when it comes to the risk space as well.

Olu Adebiyi:
When we think about our WF client base, we have customers that are large and mid-size and small. What do you think the approach or difference in approach should be when approaching ISO from each of these types of clients?

Angelica Alam:
I think from a benefits perspective, whether you're small, medium, or large, the benefits still apply. There's always going to be an upside to having richer structured data that is more interoperable across numerous providers. That benefit will be realized across the segments. When I start to think about how the different segments, small, medium, or large, are engaging with the ecosystem, I think about it less about size and more so about the preparedness of that ecosystem. A smaller institution where you're maybe more reliant on your banking providers then it's ensuring that you're lockstep with your support model of that institution, whether it's us. That you're engaging with your treasury sales representative or your relationship manager, or if you're a larger institution and you are heavily reliant on a third-party provider that is working on enhancing your ISO ecosystem, then I'd ensure to be very engaged with the rigor of the testing and ensuring that there's sufficient testing to make sure that that ecosystem is ready for richer and more structured data.

Olu Adebiyi:
Thinking about WF, we do have a large client base in the small, medium, and large business areas. What are we doing? What is WF doing to prepare for the transition to ISO?

Angelica Alam:
We are committed to making this transition as smooth as possible for our customers. When I think about our preparation, I think of it in three very important categories. The first being industry collaboration. We are very engaged with the industry. We sit in industry groups that are defining these standards that are really engaging with regional counterparts to make sure that we're thinking about this ISO strategy in a very collaborative way. Secondly, from our customer support perspective, we absolutely have been working lockstep with our support teams, our service teams, our sales teams, our product teams to ensure that we are equipped to meet our customer demands, especially as we're all working towards our own transition journeys, ensuring that we are prepared and capable of supporting our customers has been a top priority. And then thirdly, I would say, has been robust testing. We have been engaged in external testing with the networks. We've been engaged with our peer-to-peer testing. We have engaged with their customers directly on testing. So we've really focused on a robust testing strategy that we think has been very beneficial, not just to our readiness, but also to the support that we're going to be providing our customers in a post-deployment state. We feel great about our strategy and our readiness, and we're ready to keep supporting our customers through their transitions as well.

Olu Adebiyi:
Thank you so much, Angelica. That was incredibly insightful and very, very helpful. We hope that our listeners and our clients have gained knowledge and information around ISO and are also looking forward to transitioning into an environment where things are easier and processes are simplified and you don't have to build multiple ways of processing different tracks and trails and different methods of payments. And ISO, although we're coming to the end of the journey of implementation, we're hopeful that it's the start of the journey of benefit and utilization. Thank you, Angelica, for all your words of wisdom and thank you to our listeners. We are bringing this podcast to a close.

Please note that global payments and liquidity products and services are provided by WF Bank N.A. WF Bank N.A. is a bank affiliate of WF & Company. WF Bank N.A. is not liable or responsible for obligations of its affiliates. Deposits held in non-U.S. Branches, subsidiaries or affiliates are not FDIC or CDIC insured.

## Optimizing liquidity using the commercial card with Chewy, Inc.

Learn how to optimize liquidity using revolving credit, commercial cards and payments flexibility. Join Tony West, Treasurer of Chewy, Inc., as he talks with WF’s Jay Kohler, Executive Director with WF’s Global Payments and Liquidity team, about how WF enables flexibility and collaboration among banks and business partners. The result is a treasury organization that sets the company up for success, facilitating both growth and resilience.

RO-4573736

### Listen to episode 10

Audio: Treasury Takeaways

### Transcript: Treasury Takeaways

Host: Jay Kohler, Executive Director, WF Commercial Cards

Guest: Tony West, Treasurer, Chewy Inc.

>>Jay Kohler [00:00:05]
Hello and welcome. My name is Jay Kohler, executive director with WF Commercial Cards. I'm sitting here today with Tony West, who is the treasurer at Chewy. Tony, could you tell us a little about yourself and your role at Chewy? Sure.

>>Tony West [00:00:18]
Thanks for having me. I'm excited to be here today in my role as treasurer. My focus is on ensuring that the business has access to efficient capital and in a timely manner. In order to achieve this. My team and I are focused on executing on our liquidity playbook. This involves managing external relationships with strategic banks such as WF, as well as the rating agencies and executing on delivering rigorous cash flow forecast.

>>Jay Kohler [00:00:44]
Could you tell me a little bit more about your relationship between Chewy and WF?

>>Tony West [00:00:48]
Sure. It's a fantastic relationship. The WF Chewy relationship goes back to the founding of our business, but today it is evolved. Today, WF is the joint lead arranger for our $800 million revolving credit facility. WF is also our primary cash management bank, and WF is very involved in helping us with our working capital improvement initiatives.

>>Jay Kohler [00:01:10]
Thanks, and we do appreciate the business as well. What do you look for in a banking partner?

>>Tony West [00:01:14]
Well, first, the matching of capabilities and scale is prerequisite. And we look for banking partners that match not just where we are today, but where we want to go in the future. The other really important thing that we like to focus on is the people. To be honest with you, it's the people that make the difference. We're always looking for banks that have thought leaders that we can tap into innovators. You know, we have a very small Treasury team, and the way that we can leverage our resources is through these relationships with the bank. The third thing that's really important to us is a matching of values. At Chewy, we're a principle based company. Operating principles are the foundation for how we get things done and how we behave. And so it's important that that bank's values can match with ours. And so, you know, I applaud WF for its 172 plus year history. You're only able to do that if you are founded in principles. I think you guys call them expectations. And the last thing that's important to us is we need our banks to collaborate with other firms, other banks. Often we are syndicating deals and we look for banks that are going to work well together. And so those are the things that are very important to us.

>>Jay Kohler [00:02:32]
Excellent. No, I couldn't agree more with what you're saying when you're thinking about liquidity. Right. And also managing liquidity risk. What are some of the key things that you're looking for when you're kind of considering that within your team?

>>Tony West [00:02:43]
Sure. Well, I mentioned that we have a revolving credit facility. It has a variable interest rate. So my team and I are paying attention to what's happening with interest rates. Chewy now has a business outside of the US, so we're paying attention to what's happening in the currency markets. Now, these risks aren't large or significant today, but it's important that we build that muscle when we can and not when we have to.

>>Jay Kohler [00:03:05]
So thinking about Chewy and your liquidity and your liquidity risk, how do commercial cards be part of that suite of services that you're using to benefit your liquidity position? Sure.

>>Tony West [00:03:14]
The commercial card program is very important to us. It is really important that we have a well-functioning and resilient supply chain. And one of the things I really enjoy about the corporate card program that you guys offer and other working capital initiatives is that they enable these what I call multidimensional wins. So often without them, we may find ourselves negotiating with other stakeholders. But with the card program, it gives us more flexibility. For instance, we can optimize our payment terms with the card program, but at the same time it gives our stakeholders the flexibility to receive payment earlier. And so that's an example of how inserting the bank into those interactions enables a triple win for everyone involved.

>>Jay Kohler [00:04:02]
So as a large e-commerce company, how do you use working capital to help fund your growth?

>>Tony West [00:04:06]
That's one of the remarkable aspects of the Chewy story. So what we have been able to do is build what is today now a top three direct to consumer e-commerce fulfillment center network. And we have been able to do this by maximizing our working capital. We have not yet borrowed any external funds to build that network. We optimize our working capital has enabled us to build this fantastic fulfillment network that further enables us to satisfy our customers.

>>Jay Kohler [00:04:35]
That's great. So if you were to go back and you were going to be setting up your program for the first time or for another company, would it be setting up a new commercial cardd type program? What would it be, the things you would want to do initially?

>>Tony West [00:04:46]
I think it's important for a company to not just understand what are the benefits for that individual company, but it's to understand how everyone in their ecosystem benefits. Because in doing that, when we understand how we're able to accrue more value or create more value for our suppliers. And then we understand how that turns into more value for our customers and knowing that's just not what's just in it for us, but how does everyone else benefit?

>>Jay Kohler [00:05:13]
Yeah, wonderful. What's the greatest value if you just pick one thing for the commercial card program?

>>Tony West [00:05:19]
Sure. In a word, I would say flexibility. But to answer your first question, from where I sit, all of the funding requirements are equally important. We have a mantra on our team where we try to deliver flawless execution. So whether it is making payments for payroll or suppliers or repurchasing shares or executing on an acquisition, we need to deliver flawless execution. Now, the corporate card program and the other working capital initiatives, they give us the flexibility to be able to achieve those goals and objectives a little easier.

>>Jay Kohler [00:05:53]
So if we zoomed out a little bit, right, we talked more about general banking with WF. How would you describe that relationship and the benefits that you get today?

>>Tony West [00:06:02]
Our relationship evolves and adapts. You know, first we were a pure play e-commerce company in the United States. Now, we have taken the value proposition outside of the U.S.. WF has been a part of helping us with that. I'm super excited about our next step into Chewy vet care practices with veterinarians and how that's taking our business from not just e-commerce, but now we're going into the brick and mortar, three dimensional space and now dealing with physical cash. And so, in a word, the WF relationship has been adaptive as our business evolves. WF has been a big part of helping us to do that. So there are tons of things that we're doing to deepen that relationship. And from where I sit, you can see it in the numbers. One of the ways that we can measure this is through a metric we call Nets Pack, which stands for net sales per active customer. And that continues to grow over time as we deepen our relationships with our customers.

>>Jay Kohler [00:06:57]
I think WF too, like we're always looking to innovate as well in the banking sphere. So I'm thinking about innovation and the different products that we offer. Think many examples where WF's been able to partner with Chewy in order to make sure that the products and solutions we're developing are going to work well for for your business and businesses that are like yours.

>>Tony West [00:07:15]
A really simple example of that is your I call it your upgrade to the WF vantage portal. The system is very user friendly. It's easier for teams to get caught up to speed on training, and the system actually helps us achieve compliance. As you know, with KYC and AML, there's a lot of documentation that's required and it's really fantastic to be able to use that product or that system or portal to help us achieve compliance easier.

>>Jay Kohler [00:07:43]
Thanks, Tony, for your time today. I appreciate you stopping by to chat with us a little bit. Talk about Chewy's success. I mean, wish you a lot of luck in the future going forward and appreciate your partnership working with WF. Thanks for joining us today.

>> Disclosures [00:07:57]
Global Treasury Management products and services are provided by WF Bank, N.A.. WF Bank. N.A. is a bank affiliate of WF and Company. WF Bank. N.A. is not liable or responsible for obligations of its affiliates. Deposits held in non-U.S. branches, subsidiaries or affiliates are not FDIC or CDIC insured. Deposit products are offered by WF Bank NA, member FDIC.

## Payments automation with Riddles Jewelry

Discover how to make the automation process a success using team input, strategic planning and the expertise of a trusted bank partner. Join David Westergaard, CFO of Riddles Jewelry, as he discusses treasury and payments automation with WF’s Michael Bobst, head of mid corporate treasury management. David discusses how Riddles automated a time-consuming and inefficient process, resulting in significant savings in time and expense for the company. Also discussed are ways to get through roadblocks and solve issues along the path to digitization.

RO-4573736

### Listen to episode 9

Audio: Treasury Takeaways

### Transcript: Treasury Takeaways

Host: Michael Bobst, Head of Mid-Corp Treasury Management, WF Commercial Banking

Guest: David Westergaard, Executive Vice President, CFO, Riddles Jewelry

>> Mike Bobst [00:00:05]
Welcome. My name is Mike Bobst and I'm the head of mid corporate Treasury management here at WF Commercial Banking. My team is responsible for managing global liquidity and payments across the United States and overseas. And I'm honored to be here today with Dave Westergaard from Riddles. Riddles is a family owned since 1959. Jeweler manufacturer based out of beautiful Rapid City, South Dakota. Thanks for being with us today, Dave.

>> Dave Westergaard [00:00:29]
Mike, thank you for the invite. I appreciate it.

>> Mike Bobst [00:00:31]
Absolutely. Dave, could you start by telling us a little bit about yourself and your role at Riddles?

>> Dave Westergaard [00:00:36]
I’m the Executive Vice President and CFO of Riddles Group. We are, as you mentioned, a jewelry company headquartered in Rapid City. We have 70 stores throughout the Midwest of the US. And with our jury manufacturing in Rapid City, we distribute through our own retail stores as well as a number of other retailers from small sole proprietorships to large national discounters throughout the United States.

>> Mike Bobst [00:00:58]
Tell us a little bit about your relationship with WF.

>> Dave Westergaard [00:01:00]
Our relationship is deep and it's broad. We work with the commercial banking team on lines of credit, whether it be our operating side of our business or real estate side. We also work with WF and a number of other ancillary areas. From the standpoint of the private label credit cards, the major credit card processing, as well as the Treasury management team for all of the Treasury management functions, including different payment options for our customers.

>> Mike Bobst [00:01:25]
So, Dave, I know we're here to talk about your automation journey at Riddles and the steps that you took to get to where you're at today. So why don't you back us up a little bit and tell us about how this journey started, how you discovered the opportunity within the organization.

>> Dave Westergaard [00:01:38]
As any organization has to look at different efficiencies and effectiveness within the organization as we continue to grow, as we continue to diversify. I was tasked with looking at a number of our back office functions, and one of those that really came to light was our accounts payable function. It was a very time consuming, labor intensive process from the standpoint of inputting invoices to reconciling those invoices, to paying those invoices on time, making sure that we're keeping our vendors happy by processing the payment in a form that they want to receive.

>> Mike Bobst [00:02:09]
So I know as part of that it's important to find partners that can be very additive to helping you achieve your goals. So how did you go about selecting the critical partners to help you along your automation journey?

>> Dave Westergaard [00:02:19]
Well, we looked at a number of other players in the market, too, that specialize in the payables space, and WF continued in its in its leadership role of bringing solutions to us that really create that effective process, really in our back office. They spent time with the team to make sure that they understood the full picture before they made the recommendation on this is a solution we feel would meet the needs of what you're looking for within your organization.

>> Mike Bobst [00:02:44]
I know that your organization has grown significantly since the pandemic, since 2020, and since you embarked on this mission, both store footprint and through staffing. So talk a little bit about what kind of scalability this type of solution has provided you now that you've automated the payables path.

>> Dave Westergaard [00:02:59]
Really, Mike, we're able to do substantially more in terms of paying more vendors, more volume of payables with virtually the same size staff as what we were at prior to this payment manager process.

>> Mike Bobst [00:03:14]
And I know you're not a one man operation, Dave, so you have to get the people around you motivated and influenced to make the change. And as I talk to customers, that sometimes is one of the bigger challenges on the onset of a project. So how do you motivate and influence your team to go down this path with you?

>> Dave Westergaard [00:03:30]
You know, really, my leadership style is, is to really incorporate the team approach. And certainly a CFO. My job is to certainly, you know, create a vision and to motivate. But I would be remiss to think that I know everything about every one of our processes. So to get the team involved from the get go was probably one of the most crucial points. Besides making the decision, one of the most crucial points to move forward with this process. And for us, I believe it creates a little more ownership of the process. The team feels a little bit more involved. They understand that their opinions matter and they're the ones that are deep in the weeds every single day. They understand where those challenges are that can be addressed with a better solution.

>> Mike Bobst [00:04:12]
Absolutely. The other common thing I hear is the fear of change. So not just the fear, but the acknowledgment that there's going to be challenges as you change and that disrupts business.

>> Dave Westergaard [00:04:22]
No question.

>> Mike Bobst [00:04:23]
And so talk to us a little bit about the challenges that riddles face and how did you guys overcome those?

>> Dave Westergaard [00:04:28]
You know, the fear of change is a very legitimate concern. And we certainly we're not immune to that. But through communication and taking the time necessary from the WF side to understand what our needs were, we began to work through those challenges time and time again. You know, the process, candidly, Mike wasn't without its roadblocks. There were roadblocks at the beginning. There were roadblocks. In the midst of the process. There were roadblocks on the eve of implementation and the WF data analytics team just hit a home run in coming up with a solution to streamline that data coming out and being put into payment manager to. Really, again, save a substantial amount of labor time for our team. Probably two weeks of data entry was saved through a 15 second import.

>> Mike Bobst [00:05:13]
That's excellent. Tell us a little bit about the outcome of this entire process, how that's impacting your business today and how WF played a role in that?

>> Dave Westergaard [00:05:21]
Absolutely. So as we talked about the labor process that we had in play before, candidly, and we do two of these a month, the historical process of pushing out an accounts payable was about a 24 hour process amongst different tasks and responsibilities and people to push out an accounts payable run. The process was very, very time intensive and the result of payment manager working through that process. It went from 24 hours twice a month, so total of 48 hours down to candidly 15 to 20 minutes from start to finish of pushing out a large payables run. All right. And because of the automation, because of the process that is involved with payment manager, it absolutely delivered time back to our accounting team. And beyond that time savings, which is substantial. Mike, the WF team went through a very in-depth onboarding process with all of our vendors from our expense vendors to our inventory vendors, and they came up with a most effective and efficient way that they wanted to be paid. And first and foremost, they encouraged those customers to take a P card or our corporate credit card as a form of payment. Next, they would look to ACH as the second solution and last resort. If they still want to be paid through a check, we could accommodate that. But through the process, not only was it the labor savings, but we started to pay our vendors in a much more effective way. Beyond that, we were able to increase our spend on our P card program, which resulted in some savings for us as a company also.

>> Mike Bobst [00:06:56]
Of course. Excellent. What do you value most about your relationship with WF and what are you looking forward to in the future?

>> Dave Westergaard [00:07:02]
Mike I think the biggest thing I value the most is the level of communication. And we've been working with WF for decades. And one thing that has stayed so consistent is the high level of communication. It's not a monologue. It is truly a dialog of communication with our relationship management team, with our team on our major credit cards team and within Treasury. And with that, they're able to make recommendations to us as solutions that really can help improve our business. They understand our business in such a way that they are really targeted solutions that truly will deliver results to us.

>> Mike Bobst [00:07:41]
Knowing that you came from a very manual process which was very ripe for fraud and fraudulent activity. What does this done to change the fraud landscape for the organization and help better protect you?

>> Dave Westergaard [00:07:51]
It's been an absolute game changer. Mike. The fear that I had so consistently when we were sending out hundreds of thousands of checks was whose hands were they going to get into that we don't want them to get into? And now with the built in fraud protections, with the credit card, the whole fraud filter process, the perfect receivables process with WF makes sure that we're paying our vendors exactly what they should be paid on time and done in a very efficient and effective way and avoiding any type of potential fraud issues.

>> Mike Bobst [00:08:21]
Great. So with all that said, what advice would you give your peers that may be watching this today?

>> Dave Westergaard [00:08:27]
I think the biggest thing I would encourage my peers is to not be afraid to get your team involved from the beginning. Your team understands that their day to day processes and as CFO, you know, certainly your role is to continue to cast a vision, to continue to monitor the process and hold the process accountable. But get your team involved from the beginning. Allow them to have that connection and develops ownership amongst that team.

>> Mike Bobst [00:08:51]
Excellent. Well, I want to thank you for your time today, Dave. I appreciate the relationship you have with WF. We certainly feel like a part of the riddle's team as well. Thank you for joining us here today.

>> Disclosures [00:09:03]
Global Treasury Management products and services are provided by WF Bank in a WF Bank and is a bank affiliate of WF and company. WF Bank in a is not liable or responsible for obligations of its affiliates. Deposits held in non-U.S. branches, subsidiaries or affiliates are not FDIC or CDC. Insured deposit products are offered by WF Bank in a member FDIC.

## Successful Digital Transformations with People, Processes and Systems

The digitization journey can be a multi-pronged and complicated process for some companies. But a coordinated effort including people, processes and systems can be a key element of a successful transformation. Join Reetika Grewal, the Senior Executive for the Commercial Bank and the Corporate Investment Bank at WF and Chris Fritz, the Digital Director of the Lending and Capital Markets Journey for the Wholesale Bank, as they discuss strategies for successful digital transformations.

SDI-GTM

### Listen to episode 8

Audio: Listen to episode 8

### Transcript: Listen to episode 8

Chris Fritz

Hello everyone and welcome to the Treasury Takeaways podcast. This is Chris Fritz. I'm the Digital Director of the Lending and Capital Markets Journey for the Wholesale Bank at WF. With me today is Reetika Grewal who is the Senior Executive for the Commercial Bank and the Corporate Investment Bank at WF. Reetika, thanks for joining us today.

Reetika Grewal

Hi Chris. Glad to be here.

Chris Fritz

So today we really want to talk about digital. So Reetika, for the purposes of getting started, like how would you define digital?

Reetika Grewal

I'm going to take two steps back first and define a little bit about how we think about the commercial and the corporate and investment bank and then talk about the problems that we solve for our customers. So when I think about companies that we work with, I say something to the effect of, it's usually companies that are coming to us and asking us to help them run their business. And they might need capital. They might need the ability to move money, they might need the ability to collect and pool money, etc.. And that could be in the form of a portal experience or a web experience where they log in and do various activities, you know, apply for financing or move money. And then lastly, where we're seeing a lot more activity is in the context of an embedded experience. Our clients use a wide variety of tools and systems to run their businesses, and our software needs to work really well with those tools and systems so they can have that one integrated view. The reality is that most of our clients are on a digitization journey of their own. They're looking for ways to automate transactions and activities as much as they can to drive efficiencies in their businesses and digital and the great software that we build is a critical part of that.

Chris Fritz

Yeah. And one of the things that jumped out to me as you were talking is the journey with banks into digital really started with any movement away from paper and voice conversation. And you think about how it really started with fax machines, heavy software applications that banks would then export to clients on discs, and then they would download and create a Treasury workstation with some kind of an internet connection. We've come a long way in that time from dial-up. We've kind of come a little bit back to where an API solution and embedded solution is really us once again giving a software component to our clients that they then embed. But it's much lighter and more flexible. Back in the old days where it was a major technical implementation for a company that probably hadn't allocated a lot of resources for its Treasury Department.

Reetika Grewal

A hundred percent. And I think really the shift has been made in the commercial space a little bit later than the consumer space. As an end-customer, I just don't want product after product. I need this to work in my workflows. And that understanding of those workflows in the operating systems that they're working with has helped us move our digital experiences to align much better with the problems that our clients are trying to solve in running their business on a day-to-day basis.

Chris Fritz

All right. Reetika, when a company tries to digitize, what are the specific strategic elements they need to make sure they really nail and get right?

Reetika Grewal

I simply break it down into people process and systems. Like with any change, you need to make sure that the people are on board and understand what the change is. You need to make sure that it can work in the process and systems that you already have. And if not, then you have to orchestrate all that change through it. So it really comes down to those three things. And if you only do one and say, okay, here's a new step in our process and you're going to click these three buttons and the people don't quite understand it, you may have a failed digitization. So at a very simple level, it comes down to those three things to make sure that it's successful.

Chris Fritz

I think one of the things I hear over and over from clients around is the systems. Folks in the Treasury area don't always feel like they're number one on the prioritization list for resources, for system upgrades. And I'm sure that's true with every part of every company, right? Because I know we always feel we need to be higher. But I think having a technical team that you can work with, that can help you make this transition into ones and zeros from whatever your swivel chair or your manual process has been, I think is critical because without that, technology changes so rapidly and without that day-to-day interaction with a trusted advisor, they're going to always be scrambling to catch up and to pretty soon you're working with duct tape and baling wire to hold things together. And that really erodes all the efficiencies you initially saw and makes life harder and saps morale in the teams.

Reetika Grewal

And in many ways, this change management that you're talking about is one of the impetuses for us to do the embedded finance work that we do, right? It's sort of a recognition that these companies have these various ERP and Treasury workstations that they already have set up and are working for them in specific parts of their workflow. And we need to meet them where they're at. And so building APIs that connect into the systems where they're doing business helps overcome one of those obstacles in the digital transformation so that they can really focus more on some of the process and people elements to drive the change that they're looking for.

Chris Fritz

Yeah, I think that's right. So let's shift gears a little bit back to how the bank presents itself, right? I've often had folks who ask me, what is digital for a bank? It's the access point. You know, historically, the access point has always been through sales. In your eyes, does digital take away the need for that personal interaction with the sales team or does it complement it? Does it compete with it? What does it look like?

Reetika Grewal

I do think that it's very complementary. I mean, just think about your day-to-day life and how you navigate the interaction between people and digital. Even for your own personal transactions, you have expectations of what things you should be able to do digitally. Being able to change a password or order something or return something may be in a commerce transaction. And when you have to call somebody for some basic types of transactions, it creates friction for you as the end user. There are things that you should be able to self-serve on and we need to be able to do it really well for you so you can use that time with a person or your banker to really leverage their expertise and help you in a different way to move your company forward.

Chris Fritz

So when you look at banking from a digital perspective, how would you characterize the industry as far as their maturity? Is digital banking a mature enterprise, or where does that sit on that spectrum?

Reetika Grewal

I would say on the consumer side, it's probably more mature. On the commercial side there is more opportunity to do more. And I think that the magic is in making the complex simple. We're still early on that journey, and there's pieces of it that I would say we've done a great job on making that complex simple. And then there's other pieces where we have more work to do.

Chris Fritz

Yeah. On my team, we use the phrase elegant simplicity.

Reetika Grewal

Yeah, just going back to the example I was giving earlier, like all those e-commerce transactions, those you know exactly what to expect, right? When you go to do an e-commerce transaction, the more that you actually have to fill out, the more friction there is. And so it is kind of an easy formula, just make it prefilled as much as you can. Make the payment options simple and easy. In general, that workflow is probably where I'm seeing the most evolution optimization consistency. Those are probably some of the areas that I've seen sort of most evolved and standardized across the industry.

Chris Fritz

Let's talk a little bit more about a company's path to digitizing as they start this journey. You've talked about people, process and systems. What are some things on a practical level that they should really focus on and that we could possibly as their bank, help them with?

Reetika Grewal

One of the big elements is having sort of realistic expectations of where you are and how much you want to take on yourself versus how much you want to leverage the tools that somebody like a WF could provide to you. So we've been on this journey and have created a brand new portal called WF Vantage. It's the one stop shop that you can go in and view your accounts, manage your accounts, move money. You can manage it while it's in the holding place, in terms of managing the liquidity, you can manage any loans, and you can do FX payments. You can start or initiate a debt capital market transaction. Right? That is kind of a plug in and go system. So as a company, if you don't want to put a lot of technology resources against driving automation, WF Vantage is ready to go. Log in and start using it and then expand your product. And we're that portal, that WF Vantage portal is able to expand with you. If you've got a little bit more of a technology appetite and you want to build things directly into your systems, then looking at APIs or SDK software development kits that would work to solve the specific problem that you're hoping to solve. That would be a great way to use some of the software that we've built. But again, it just depends a little bit on your technology appetite and readiness versus having things that are more turnkey.

Chris Fritz

I mentioned data and insights and you referred to it a little bit earlier on. If a client starts using Vantage or the API system or other tools we offer as we start to deliver more information back to the client about their activity, what would that look like for a client and how would they use that information?

Reetika Grewal

Being able to understand who our clients are, what their needs are, what their activity is, and if we have suggestions and opportunities for them to do something different, to really help them along the curve of managing their business. There's the new instant payment rails are out there or you can manage your cash flow a little bit tighter, etc. So just making sure that we're using what we know about our clients, what we've see across other clients to be helpful in the moment as they're working through their management of their company. So being able to put some of the pieces together for clients to help be that trusted advisor even from a digital perspective.

Chris Fritz

Well, Ritika, we've been going at this a while, so I guess I'd ask, what's your summary statement? What would you want to leave the listeners with about the power of digital in the Treasury space?

Reetika Grewal

I think just a few different things. Making sure that we're constantly getting feedback is super important for us - to know that as our clients evolve, that we want to evolve alongside with them and digital and our relationship model, they play hand in hand to make sure that we are here to make the companies that we work with successful. And so that's really what our mission is and how we orient the team.

Chris Fritz

I would echo that. And I just want to leave folks with the idea that digital is actually not that scary. It's just the process of making yourself more efficient by leveraging some of the basic things that you do and the rest of your life. Bringing it into your company. Well, thank you, everyone, for joining us on The Treasury Takeaway Podcast. Thanks for listening and hope you come back for the next episode.

Global Treasury Management Products and Services are provided by WF Bank, N.A., WF Bank and is a bank affiliate of WF and Company. WF Bank N.A. is not liable or responsible for obligations of affiliates. Deposits held in non-U.S. branches, subsidiaries or affiliates are not FDIC or CDIC insured deposit products offered by WF Bank, N.A. Member FDIC.

## Cash pooling and "de-pooling" with Krispy Kreme

VP and Treasurer at Krispy Kreme, Inc., James Krikorian, discusses how he incorporated automation to scale treasury operations upon his arrival at Krispy Kreme. He describes his current cash management strategy — using WF cash pooling to centralize funds and sweep solutions to maximize yield and pay down debt. James also discusses the importance of choosing a proactive banking partner that has cultural alignment when working in a dynamic environment.

RO-5485076

### Listen to episode 5

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### Transcript: Listen to episode 5

Mathew Obergfoll:

Welcome to the Treasury Takeaways Podcast. I’m Mathew Obergfoll, managing director of Global Payments and Liquidity at WF. In this episode, our host speaks with Krispy Kreme’s global treasurer covering liquidity strategies and cash pooling. Let’s begin with an overview of Krispy Kreme’s relationship with WF.

James Krikorian:

James Krikorian, vice president, treasurer, Krispy Kreme, Inc. I'm the global treasurer for Krispy Kreme. And, I work closely with all the lenders, and I'm equally honored to be here with WF, one of our most important banks globally.

Mathew Obergfoll:

Can you, can you give an overview of Krispy Kreme relationship with WF?

James Krikorian:

WF is our primary domestic cash management bank, but we've expanded the relationship into things such as liquidity, also in in leasing and in other areas of work.

When I was hired by Krispy Kreme, I was hired as a one-man show. I was truly their first treasurer. So, they didn't know what Treasury was. They just knew they had debt and they needed someone that knew something about managing debt. So, my first day at Krispy Kreme, I had a lady come in and say, “I'm going to be your direct report.”

And I said, great, we're going to have such a blast. From the beginnings of my arrival to current the day, we’ve done wonderful things. We're going to get off emails. We're going to get off Excel spreadsheets. We're going to build things that are actually going to allow us to sleep at night. And that's exactly what the cash pooling product has given us. It's been truly a gift. And I would say that the more that WF can invest in such gifts, like forecasting, like using AI about data, about cash flows that are coming in historically, the more you're going to win against your competitors.

But what we have in our line of work is a very smooth cash flow of selling donuts seven days a week. With that intelligence, you're going to be able to build stronger, better tools to service your client's needs. So, I would not walk, I would run towards that because your clients are screaming for it. But, I love what I have and I wouldn't change banks in a New York minute.

Mathew Obergfoll:

And how does Krispy Kreme approach liquidity management?

James Krikorian:

It's actually fairly simple. For us it's about accessing the debt, accessing the cash and offsetting them. So, it's primarily about cash optimization, and with liquidity being trapped in the US within our various JVs, leveraging some of your transaction services has allowed us to lower our interest expense.

Mathew Obergfoll:

So, you're able to rely on you're able to leverage your own internal funding instead of having to go out externally to get to get credit.

James Krikorian:

Precisely. When I arrived in late 2017, it was fairly simple in terms of a pooling structure, but it actually wasn't pooling, and I was able to take various entities and to configure a pool. WF's cash flow analytics is the backbone for the pooling that is prevalent today.

Mathew Obergfoll:

And what liquidity risks or other types of risks that you're trying to manage when you're thinking of all of your liquidity management structure.

James Krikorian:

So, it's really about cash flow, more about making sure that as cash is available, that the debt is maturing to offset those higher interest expenses. And that's why having real time access to the cash is so important. For example, implementing a passive suite product called the Stagecoach sweep has both enhanced the yield on what I can't sweep to my debt. It does it for me.

Mathew Obergfoll:

And with the cash pool, you're able to concentrate all your funds in a single point to take advantage of that.

James Krikorian:

We love it because of the automatic accruing of interest, because as you can imagine, a lot of our joint venture partners, though we're the majority owner, the minority wants to make sure they get their ample interest income. Or said differently, if they happen to be borrowing money because it is a two-way pooling structure– that we're getting what we deserve from the JV.

I spent the first five to six years of my career at Krispy building the cash pool up, but interestingly, in 2024, we actually did something called de-pooling, where we sold our majority stake in Insomnia Cookies and we actually had a de-pool. So that was kind of counterintuitive, but just as useful, as we rotated down into a minority stake, we wanted them out of our pool just to mitigate some of the risk.

Mathew Obergfoll:

Do you take advantage of the self-service capabilities that we offer through Vantage around the intercompany reporting side of the product?

James Krikorian:

We do, in fact. We have a team in the US of myself and my analyst. She does a great job. But two people in a global treasury, you need self-service. You need functionality, you need to leverage. In this scenario, WF has the back office. And without technology, without dependable service, without people, it's very difficult to do my job effectively. But the reporting, by definition, is a lifesaver.

Mathew Obergfoll:

Right? And that kind of takes me into the next question. Where I wanted to go was-- what do you look for in a banking partner? It sounds like some of the capabilities that we've been talking about are really important, having that support as a kind of a back office for you.

James Krikorian:

I need a diversified banking group. Um, when I say diversified, it's not just large bank, small bank, it's also U.S. bank versus Japanese bank. We really want diversification, but we also want long-term relationships. WF has been in our credit since the “take private” back in 2016, and they continue to grow the relationship together.

It's not about you or me, it's about us. And it's my goal to continue to grow the relationship with WF. But it needs to make sense for your shareholders and mine.

Mathew Obergfoll:

And, from a team perspective, I know you work very closely with some of our product partners and our implementation partners. How important is that to you having that support?

James Krikorian:

It may sound a bit strange when I say it's about the three P’s. And, no, it's not price, price, price, it's people, people, people. And it could be the four P’s or the five P’s, depending on how many times you want to say people. WF has the right culture for Krispy Kreme, and they have the right people for Krispy Kreme.

Mathew Obergfoll:

Just from a general banking perspective, outside of liquidity management, what other priorities do you have that WF is helping you achieve?

James Krikorian:

I mentioned a little bit about leasing. We do a lot of expansion with our delivered fresh daily and, we certainly have a lot of trucks on the road delivering fresh donuts daily. So, WF is central to the lease of those trucks, but they do other things, as I mentioned, specifically within the liquidity space. But we're also expanding into derivative products, which I know they'd love to have a bigger slice of that business.

But again, it's about wallet share. It's about making sure that we can grow profitably, together. And without the right balance of profitable products, WF cannot continue to invest in its infrastructure. And without the right type of products that we're paying for, we can’t grow as a company. So again, it is a very much an ecosystem.

Mathew Obergfoll:

Great. And when you say wallet share, it just kind of makes me think of your treasury policies internally — that you're trying to manage as you manage your banking partners. So, what other important metrics out of your treasury policy are you trying to meet when you're when you're looking at banking partners just in your day-to-day operations?

James Krikorian

Just like, you know, your clients very well, we need to know our lenders very well. So having a local bank. We were founded in North Carolina in 1937. WF goes from the West coast to the East Coast, as does Krispy. So, from our perspective, knowing who you're banking with, knowing that they're here for the long term is very important for that relationship.

And I just think that from my perspective, if you can see yourself in your partner, I think it's a good thing. And from my point of view, I see a reflection of the Krispy Kreme culture in WF, albeit, I like to think that WF plays a little bit more seriously than a donut company.

Matthew Obergfoll:

Right!

James Krikorian:

I like to think that we all have fun in our day-to-day lives.

So, with cash pooling, I arrived in November 2017 to a donut company, and previous to that, the only experience I had was a tire company. And I've used this joke often — round hole and can't eat it. That's why donuts are so much sweeter as a career. But from my perspective, I arrived and there was a WF pooling, but it was really within the legal entities And, that's where I decided that it's smarter because WF had the cash forecasting in 2017. They had the pooling capabilities. So, I was able to gravitate towards what was comfortable, which was clean analysis statements, which is a bit boring, but more towards the pooling structures in the technology that WF had well developed.

So, to be able to work with your team, whether they're on the West Coast, which they are, or the East Coast like you are, it was really just a very natural discussion to say, let's roll up our sleeves and get to work. And we built a pool as we started to create joint ventures with Insomnia cookies in 2018.

Awesome Donut was the L.A. JV in 2018. W.K.S. Krispy Kreme in 2019. It was all of these U.S. JVs that screamed for a cash pooling product that you had. So, I just kept layering them in, layering them in. We released publicly that we sold 40% of our 75% stake in Insomnia Cookies in the month of July 2024.

What I did was “de-pool”. So, I almost did the reverse, which was kind of an interesting concept in my career. I'm used to building things up, not tearing things down. But that was one area of just sort of reverse engineering of something that we all already did. And the cool part, your team that was building it up in 2018 was the same people that I was working with when I was tearing it down in 2024. And, the only thing that changed was one of your team members had moved from West Virginia to Florida, I believe.

So, it’s really a long-term relationship driven with incredible technology to support Krispy Kreme in its ever-evolving landscape.

Mathew Obergfoll:

So, when you talk about technology and innovation that the bank offers, are there any examples of how, you know, we’ve innovated and included you — Krispy Kreme — in the product development process and made sure that we were taking your needs into account as we continue to develop the products.

James Krikorian:

Yeah, whether it's the rollout or the refresh of a Vantage, they're always doing interviews, always doing case studies, always doing pilots. I'm also a member of WF Advisory Council. I've never experienced a bank that has such a thirst for understanding their clients’ needs. And because before Krispy Kreme, I didn't have any experiences with WF, it's really opened my eyes in the right way to understanding a bank that wants to understand their clients.

And great examples of this is just the product experts and how I work with them is very frank, very direct, but it's a two-way street. They need to understand me, and I need to understand them. And whether we're building a pooling structure and they're referring to it as a source account and I'm referring to as a child or a parent, or a header, we need to use the same language.

Words matter. Market convention matters, because once you flip it on, everybody needs to be on the same page. Because something will go wrong. So, it's not a question of when it will go wrong. It's just knowing who to call when it does. And it's a two-way street.

And having these relationships with your client experts only matters when you actually have tenure. And every once in a while, they'll still reach out to me when they're refreshing something, changing something — it just makes me feel part of the WF family. And, maybe, it’s because I am.

Mathew Obergfoll:

Yeah, and I like that about working at WF because I think even in a product role, we're encouraged, like you said, to interact with our clients we're not siloed in building the products we're in. We're trying to incorporate our clients into that process, whether it's building a new product, or managing an existing one, or just handling day-to-day operations.

James Krikorian:

It's working. It's absolutely working. Keep up the good work, and I'm loving it.

Disclosure:

Global Treasury Management products and services are provided by WF Bank, N.A. WF Bank, N.A. is an affiliate of WF & Company. WF Bank, N.A. is not liable or responsible for obligations of its affiliates. Deposits held in non-U.S. branches, subsidiaries or affiliates are not FDIC or CDIC insured.

Deposit products are offered by WF Bank, N.A. Member FDIC.

## Marrying technology and AI to create great customer experiences

This episode of Treasury Takeaways discusses the use of research and journey mapping to uncover key pain points for clients, ensuring their voices are heard by product leads and technologists across the organization. Karen Pascoe, WF’s Head of Design Innovation for the Commercial Bank and Corporate and Investment Bank discusses how she and her team combine customer data with artificial intelligence and technology to ensure a holistic solution and a seamless experience for the customer. Karen also delves into client personas and describes how they are used to craft personalized end-to-end experiences.

### Listen to episode 4

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### Transcript: Listen to episode 4

>>Jonathon Traer-Clark:

Hello everyone, and welcome to another episode of Treasury Takeaways. And today I'm delighted to be joined by Karen Pascoe. Karen, welcome to the show.

>>Karen Pascoe:

Yeah, thanks. It's great to be here.

>>Jonathon Traer-Clark:

And I think normally I introduce our guest, but I think in this instance it would be wonderful if you could actually just introduce yourself and what you do for WF.

>>Karen Pascoe:

So I am the head of design innovation for our digital team for commercial banking and corporate and investment bank.

>>Jonathon Traer-Clark:

Fantastic. But I think you're being a little bit timid there with the definition, because what you actually do is you help us to understand who our customers are, right?

>>Karen Pascoe:

Absolutely. I like to think that the most important purpose I serve here at WF and in the transformation is actually collapsing the distance between the people on the digital team who are creating and crafting solutions that our clients will use every day in terms of doing their banking with us and our actual clients. So I lead all of our research activities in terms of understanding what are the key pain points that our clients have in doing business with us. How to understand that in bringing those insights and understanding in with our product partners and technologists, to make sure that take clients at the center and make it actionable across our digital transformation.

>>Jonathon Traer-Clark:

All right. So let's take that down a notch and see if we can dissect that a little bit. So I'm a treasurer and I'm using one of our online interfaces typically obviously the vantage platform is your team is responsible for not only the look and feel of that, but also my interaction with it. Is that a fair statement to say?

>>Karen Pascoe:

It's a very fair statement across all of the WF Vantage platform. And also our platform where we meet our clients, where they're at, whether it's embedded finance or APIs or SDK ways of even using more advanced capabilities to allow our clients to do the work that they need to do.

>>Jonathon Traer-Clark:

And just to expand API is application programing interface, SDK is software development kit? Correct. I know my lingo. Obviously you can't take thousands of people's input, right? You have to somehow rather filter it and you use a mechanism called personas to do that. So do you want to tell us a bit about that?

>>Karen Pascoe:

Yeah, absolutely. So a lot of the work that we're doing in the digital transformation might be, let's say, the people on the digital team and our technologists, you know, we'd like to see the three legs to this tool be a design product management and technology. But the magnitude of the transformation that we're driving here is also work far more deeply within the business and broader business transformation activities that we've got going on as well. So personas are a tool that codifies our incredibly deep and rich understanding of some major archetypes of our users that represent key either decision makers, influencers, or day to day users that interface with WF and understanding what are their pain points? What's their day in the life? These personas are really a one page snapshot. It allows everybody internally within the digital team to just say, 'Ambitious Amy' is this. This is what her needs are. This is her day in the life. This is what's important. Ambitious Amy is one of our 12 personas in emerging middle market.

It also allows the broader organization to have this picture of a client who's actually engaging with us. So it allows the inner ring of the product design and in dev, and then the outer ring, the broader business that we're interacting with, the personas are allowing us to be on exactly the same page of who we're solving for. We're trying to avoid being inside out, If you're not actually engaging with your client, if you're not actually doing testing with your client, if you're not actively working with them it's going be hard to get a differentiated experience out there, and it's really going to be hard to craft a solution that your clients love and embrace.

>>Jonathon Traer-Clark:

So essentially the persona is a representation,of the client in the room, and they enable us to anchor our conversations around that customer experience. And there could be multiple personas involved at every different stage, right?

>>Karen Pascoe:

That is a great way of putting it. I think some companies are rumored to say, well, they keep an empty seat at the table for the client in a manner of speaking our personas, we have a dozen of them, and the personas are really that chair for that client. So typically when we're crafting new solutions, any stage that we're looking at, we're talking about the personas that this is impacting, maybe it might be three personas that we're looking at let's say liquidity. We'll be looking at different kinds of personas to make sure that we've got a comprehensive understanding of the need. That persona typically is helping us start the conversation of the work that we're doing to deeply understand the problem space, and that persona is something that is really an anchor point through the end to end experience of the work that we're doing all the way through testing, rolling it out to market.

But the listening and putting clients at the center doesn't actually ever stop. Digital is continuous delivery. And it's really about creating this virtuous conversation with our clients. So we do surveying after our products go to market. There's stages in different kinds of client listening that give us various signals and understanding of what our clients love, what they're using, what's really resonating both from that kind of factual and data standpoint, but also from that more human perspective. As human beings, we're not entirely rational.

So really bringing that understanding more holistically to the humans on the other side that we're interacting with and making sure that we're meeting their needs.

>>Jonathon Traer-Clark:

And I think it's also important to say that the persona isn't just a representation of their role, it's their personality, their behaviors possibly their areas for improvement, but it also talks about their ambition. So it's a complete character profile.

>>Karen Pascoe:

Yeah, absolutely. It's important to note that the personas are actually a product of over a decade's worth of ethnographic research that we've done with our clients. Being on site in their locations, rounds and rounds of research that we've had. And so that client listening is always a continuous deepening of understanding of client needs, a continuous conversation that across all the journey teams that we have in that conversation is always ongoing.

>>Jonathon Traer-Clark:

Fantastic. So it really is know your customer, which is wonderful.

>>Karen Pascoe:

It really is. Yeah.

>>Jonathon Traer-Clark:

We understand the client and we got it into a manner that is digestible but also representative because of the way you've done it. You used the word earlier called journey. Can you talk us through what you mean by journey?

>>Karen Pascoe:

There's different, phases in the client life cycle, discovering and engaging with us, choosing to do business with WF, onboarding or deepening their relationship, using our capabilities, getting value from our capabilities, getting advice and guidance.

But if we're looking in a journey in particular, moving money is incredibly important to our clients. And, so we look at money movement. We're looking at the different ways they're taking money in, sending money out, making payments, transferring funds, any of the work that they need to do to manage that. And so we look at the end to end journey that our clients have with us, because that's really looking at the broader relationship and relationship health. We're really trying to not have to have you think so much in terms of the payment. So just deeply looking at how can we make it simple, how can we get you to the outcome that you need to do without necessarily needing to know our jargon, know our systems, know all the protocol, and build that intelligence into the digital experience to help guide your interactions with us.

>>Jonathon Traer-Clark:

Fantastic. So it's a way of imagining a journey or an interaction of a client with our systems and our capabilities and our products. But I also know, you say digital first, but not only.

>>Karen Pascoe:

Digital is a part of an interaction that a client has with WF. If we take the case of onboarding, let's say. we have a client that's new to WF. So, KYC we need to make sure that this entity is available to be able to do business in the laws, etc., etc. Well, the digital team doesn't actually necessarily own all the underlying systems that actually power onboarding. So the work that we do in the digital team is actually having a richer understanding of how the information is flowing to our systems, and making sure that the work that, is really coming together as a holistic solution for the clients and be able to do it quickly and seamlessly, and then it is populating the right underlying systems to take this cycle time, which is the thing that our clients really care about. So if we're collapsing the distance to be able to get our clients through the work that they need to do to get the value on the other side, that's really what we're looking at, the digital as part of that holistic solution to support our clients.

>>Jonathon Traer-Clark:

Excellent. And I love the way that you connect it. It's not just digital as a tool, but also there's human interaction, whether it be through your account exec or someone else. And humans like to communicate in many different ways. You're trying to make it intuitive. From a Treasury perspective, our treasurers and their teams, we've moved on considerably from blue screens dial up modems right the way down to an intuitive experience. That's almost designed exactly for you. Is this the ultimate of profiling and knowing your customer in a way that is actually a positive benefit as opposed to something we just have to get through?

>>Karen Pascoe:

The way I always think about it is we really want to be on the side of our clients for the work that we're trying to do and really understand them and meet them where they're at. But one of the ways that I think we're really seeing artificial intelligence and personalization and machine learning and algorithms are really painting our entertainment choices. I'm not super fond of big Hollywood blockbusters, so none of those will be in my queue. If sports or Hollywood blockbusters are more your jam, that's really how your world is going to get tailored. So if you're more of a leader in your organization, information, insight, really getting to crisp data that's going to help you make better decisions. Translating that into from a Treasury perspective, then that is really the richer experience that you should be getting right to the insights and the things that help you make decisions.

>>Jonathon Traer-Clark:

So if I summarize the takeaways here are we very much put the customer at the center of the way we're thinking. But what we try to do is to think about the way that they're interacting and using our product capabilities and the sequence in which they use them as appropriate for the journey that they're trying to undertake through our systems. And then we apply advanced analytics and other tools to essentially mean that we're almost not quite one step ahead of you, but we're probably pretty close to understanding where you're likely to go next so that we can be ahead of you and help you execute your role, whether it's the head of the company, right the way down to the analyst. But we're partnering with you to give you the best possible experience, but also a fantastically personal experience as well.

>>Karen Pascoe:

Yeah, that's a really great summary. As my team is working deeply in our design software, with all this advanced and complex technology, with all the regulatory rules and all that other stuff that we need to make sure that we bake into the seamless experience. As we're on our curve with artificial intelligence, and designing algorithms. So in a way, this client obsession that we're really driving in the organization is all the way through the technology, but the technology in support of the humans on the other side, using it.

>>Jonathon Traer-Clark:

100% agree with you. But I also think it's important to state that why do we do this? Well, we do it because a) we want you to have a great experience, but also from a practical operational level. Essentially doing a single task which might be sending a transaction, reporting back to you, clearing it through various training systems and whatnot.The point being, you've got that end to end customer experience. And then you've got towers of excellence in certain areas that we offer as capabilities to our clients. And the way you manage the transition between the two or the sequencing, is what your team is really focused on empowering or making intuitive almost without you realizing.

>>Karen Pascoe:

Yeah. We use personas for the client experience. We also have an internal team that we partner with very closely, that has crafted personas on the employee experience that's actually supporting our clients. And so what you really want to do is delivering a great end to end experience. The way I'm really conceiving of this as we go down the road with generative is that our internal systems, with artificial intelligence, machine learning, metadata, our client experience, our digital client experience, our servicing experience in our operations. The paths forward is that we're having intelligence across these towers of interaction. That's really the future that we're getting to.

>>Jonathon Traer-Clark:

I love that. Karen. Thank you. Been an incredible episode. Your role sounds absolutely fascinating. I mean, you're thinking multidimensionally end to end intuitively across multiple personas as well as internal and external. And of course, applying a whole layer of analytics and advanced capabilities to it as well. Thank you ever so much for spending time with us on this takeaway. It's good to know that the next generation of interaction with our systems, architectures, capabilities, and people is being thought of in such a constructive manner.

>>Karen Pascoe:

Great. Thank you.

>>Jonathon Traer-Clark (disclosures):

Global Treasury Management products and services are provided by WF Bank, N.A. WF Bank, N.A. is a bank affiliate of WF & Company. WF Bank, N.A. is not liable or responsible for obligations of its affiliates. Deposits held in non-U.S. branches, subsidiaries or affiliates are not FDIC or CDIC insured. Deposit products offered by WF Bank, N.A. Member FDIC.

## Instant Payments - past, present, and future

The rise of instant payments has drastically transformed money movement in a highly digitized world. In this podcast episode, WF’s Art Brieske, the head of instant payments in the Global Treasury Management business, outlines the evolution of payments from a barter system to the sophisticated digital platforms in existence today. Also discussed are the benefits of instant payments and opportunities for treasurers as both “pitchers” and “catchers” in the payment transaction. Going beyond the current environment, Art also delves into the future of instant payments, in today’s ever-evolving landscape.

### Listen to episode 3

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### Transcript: Listen to episode 3

>>Jonathon Traer-Clark:
Hi everyone, and welcome to another edition of Treasury Takeaways. Today I'm delighted to be joined by Art Brieske, our head of instant payments in the Global Treasury Management Business at WF. Art, welcome to the podcast.

>> Art Brieske:
Thanks, Jonathan. I'm happy to be here. Super excited.

>>Jonathon Traer-Clark:
So let's start with instant payments. Let's go straight into it. I mean, we've had payments around for many, many years. What makes instant payments so special in your mind? Why should customers use them?

>> Art Brieske:
Jonathan, when I look at instant payments, I look at it as continuing the evolution of value exchange within commerce. So, think way back when commerce first started, we would exchange physical goods, right? I want a blanket that you created for me. I would give you two chickens for that. And then we moved to gold bullion. So instead of the two chickens, I'll give you a little bit of gold bullion for that for that blanket. And then we moved to paper currency for that blanket. And that became pretty efficient, pretty much adopted around the world still being used today. But it's been used for really a long time. So essentially what we're doing with instant payments as opposed to ACH wire transfer or card, we're actually looking to essentially replace that paper currency or the physical cash for the blanket by replicating the experience that you get with that physical cash with using modern technology. If you look at it like this, when we do that physical transaction, we're standing in front of each other. I'm asking for the blanket and give you physical currency for that. It's immediate. The money moves instantly. You've got the $10 for that blanket. I get the blanket, and now you have immediate use of that $10 so you can turn around and buy something else right there. And it's always available 24 by 7 by 365. And it's contextual. It's in the moment.

So when we look at instant payments. What we're doing here is we're replicating that experience because one of the big use cases for instant payments is digital transformation and displacing that cash and check experience. So with instant payments, you actually have the immediate movement of funds and essentially, debiting the T account, to the Fed and crediting another T account, to the Fed, that allows you immediate availability. And it's also 24 by 7 by 365. So it's always available, it's contextual, etc..

- So when we think about why we need instant payments, a digital transformation, and that displacement of cash and checks is a big one that always comes to mind for me.
- The second one is pay on demand or, as products and services are delivered anywhere, anytime. And most people think of this example that's been used out there quite often, is the Uber driver example. So you as an Uber driver, you pick somebody up and you want to get paid for that. You've got a working capital problem with some other types of payment rails because the actual settlement, the actual use of funds comes a little bit later, right? Cash is great, but that's not a good experience. You always have to carry a bunch of cash around. And the Uber driver then has to take the cash and put it in their wallet. And they're doing a lot of these, their wallets are going to get pretty big. And then the security around cash in the car. So it doesn't make really a lot of sense. So a lot of people think about that one. It's a good one to think about. Paying on demand as services are being delivered is a great one for the Uber driver, and it's easy one for people to get. So that's the second one. Paying on demand. There's proxy services are delivered anywhere, anytime.
- The third one is getting paid faster with finality. We also refer to this in industry as request for payment. So this is kind of like taking invoice from, physical mail or email into the banking platform and presenting you with a request for payment. And off the back of that you're paying in real time. So that's the third one.
- And the fourth one is paying yourself. So it's moving money from one bank account to the other, moving it from your brokerage account to bank or vice versa. So those are the four primary use cases. When I think about why instant payments.

>>Jonathon Traer-Clark:
Thanks Art and we should just say that there are other ridesharing apps available outside of the one that you mentioned. It was a good illustrative example. So it sounds to me that all of those are pretty compelling reasons. Why hasn't adoption been perhaps as quick as we might have wanted it? Or is it actually going to a lot quicker now? People are becoming more familiar with it. What are you seeing the take up rate being like?

>> Art Brieske:
Yeah, I think it's actually much quicker than we think. You know, if you think about all the other payment rails, it's taken many, many years for them to take on. I mean, like we started doing ACH, before we had ubiquity in the market. It was a good 20 years, before all banks were up and running to accept and receive, but also for individuals to put trust in that mechanism. I mean, it really wasn't that long ago when check is in the mail or, I get paid via my payroll check. Now everybody gets paid via ACH. It's getting that trust in the new payment infrastructure is really the biggest hurdle here. And that's why focusing on that me-to-me use case is an important one, because it does provide the ability for us to get trust into the ecosystem by the users. An easy way to do that is through this me-to- me use case where I'm taking money out of a wallet or out of a bank account, moving into another. The biggest use case right now has been over the past 4, let's say 5 years since real time payments went live is really that me-to-me use case. And consumers getting used to and building trust around, money moving that quickly. And I think that's the one that now we're expanding on to not only, wallet to bank account, bank account to bank account, brokerage to bank account, and so forth. Now we're seeing it shift from the me-to-me use cases to the digital transformation. This kind of pay on-demand to receiving money, as well as paying faster and getting paid faster with finality through this request for payment.

>>Jonathon Traer-Clark:
So Art, that's really interesting. So I can see from the if you like, the consumer perspective, right. It's a very valuable experience. They get to trade in real time. They're requesting to be paid or they're making the payment themselves. And certainly for small business owners there's obviously the opportunity to digitally transform the experience. But if we can upscale it a little bit and think about this, instead of a mid to large sized corporation, okay, they have their normal working procedures. They'll reconcile their accounts, and then they'll do all the liquidity management and everything else. But what we're talking about here is a potential for them to be making payments and receiving payments 24 hours a day. So how does that translate into their operational processes?

>> Art Brieske:
Let me first by just stating kind of something that maybe others are thinking about, but maybe others aren't when it comes to corporate use of instant payments. The first thing I'd like to think about is the opportunities that corporations have, right? If you think about kind of what we're doing here is we're creating a brand new payments clearing settlement infrastructure where essentially, as central bank moves from physical cash in vaults, etc., where we have armored cars moving around and so forth to potentially digitizing that as well. And then when that happens, this will be the rail that's used. So we need to think about it in a context of a longer term as well. Eventually we're just going to not have paper or physical cash anymore. So when that happens this will be the rail that's used for that. So let's think about it from that perspective. But also think about it in terms of we're actually creating no different than if you think about Google Maps and how Google Maps created brand new business models and new companies off the back of it. You know, the rideshare app companies we mentioned before, wouldn't exist today without Google Maps, right? The clearing and settlement infrastructure we're creating today for instant payments is essentially the Google Maps for banking industry. So brand new businesses, brand new corporations, brand new business models will be created off the back of that as well.

And so corporations should first start thinking about how you see this new clearing settlement infrastructure not only help Treasury, but also help our businesses, our SBU's in terms of creating a differentiated product, a differentiated experience. Just like digital transformation has changed business models for companies, you need to think about how the digitization of money is going to change business models as well. So there's great opportunities here from a strategic perspective, corporate should think about and Treasury should be part of that discussion and educating informing the business units - here's a new thing that's happening. Our business models may change as a result of that.

So let's first think very strategically as well as then secondly how we become, you know, more efficient in treasury, etc.. Your point is well-taken. It does make Treasury look at, hey, do I need to start working on weekends and holidays? Right. You know, how are we as Treasury, which is a very small group, usually with small engineering resources. How do we do this in this new kind of 24 by 7 by 365 world? Well, the first thing I would suggest is to look at the receivable side of things, because that's super important from a working capital perspective. It's not just the disbursement rate, it's also the receiving side of things. And on the receiving side of things, depending on your business model, you need to think about how when your customers send you payments on a weekend or a holiday, how do we make sure those are recognized as being on time? And you know where we need to disperse out funds. And making sure that there's enough funds in the bank account to disperse on weekends and holidays, and there's an automated process and checks and balances to make sure that those happen as well.

And then I guess then you can start looking at efficiencies within Treasury as well, and where maybe instant payments could be used to more optimize flows, intercompany, for example. And also where, Treasury could actually look at other efficiencies within the entire Treasury ecosystem. But I would definitely look at the business units first.

>>Jonathon Traer-Clark:
I think there was a lot there. If I tried to recap it a little bit. Art, I think you talked to it. First of all, let's start with the business experience. How can we create that transformational experience for our clients? That's the opportunity for Treasury to say, here's a new capability to its business partners, right. And candidly, if they've been doing the building, things like working capital councils. Treasury's role within the organization has probably been elevated anyway. This is an opportunity for them to give something back to the organization as much as impose the financial strategic acumen that they would like from the organization by way of managing the capital flows. So that's a huge plus.

I think the second thing is you've also got to think about is a bit like going to one of those coffee shops and picking how many times do you pick the blend of beans that you actually want. Most of the people would just say, I'll go with whatever the standard house blend is, I'm saying it's another choice. And I think this is also the opportunity for customers to express a preference they might like the paper-based methods, although I think most of them are swaying away from that now, but they'll probably be quite keen on something that's quicker, that's faster. And frankly, to your point, once you send the money, the money is sent, you can't recall it, right? It is a full commitment of monies or funds to the other party. So there's an awful lot to like about that too. And then bridging the gap over the operational efficiency, I think is probably going to be a function of scale. How many payments are you actually doing of this nature? How many receipts are you getting at this nature. And then candidly, the limitation that you will have as an operational function from a capacity perspective. If you're collecting money that much quicker, you might find you can be even more efficient. From a financial perspective. Would that be fair?

>> Art Brieske:
Yeah, I think that's fair. And maybe, Jonathan, we could drill in on that receivable side a little bit more because you mentioned it. It's the finality side of it too. As you think about companies and how their receivables models work today, in addition to recognizing the payment. it does give Treasury the opportunity to become more efficient. So if you think about receiving checks today, right, it's very inefficient processes. In driving behavior for clients now, to start to digitize that process and eliminate checks is something that Treasury can then focus on. Treasury can say, look, here's a new opportunity for us to motivate our clients, if somebody's still sending a check. A lot of times the reason why they do checks today is because, they like to have the control. And with the request for payment, the control is still with the sender, right? They can push that button whenever they want to send. And like you said, the benefit of receiving instant payment is you get finality as opposed to a check. And it's also the reason why Instant Payments works really well for me-to-me payments, because it's avoiding NFS apps. And so you've got a lot of opportunity here when it comes to the receivable side of things. And to start to help transition the business away from paper checks.

>>Jonathon Traer-Clark:
Art, that's fascinating stuff. I particularly like your use the word finality. But you're absolutely right. And that whole, I guess, pitcher catcher, thing being completely digital, to paraphrase one of your expressions, is phenomenal. So where do you see this going? Because to me, if we can do commerce in real time or near real time, doesn't that create opportunities for new business models and new experiences for our clients?

>> Art Brieske:
Yeah, it absolutely does, like I mentioned before, where businesses should start thinking about that from a strategic perspective because they can start to really compete in the marketplace and differentiate themselves with this type of functionality. So a lot of times people think about instant payments as the end customer experience. You get on the phone with one of your clients and there's a problem or an issue that happened, to resolve that problem very quickly is with this instant payment. So a great example is better customer service. If there's an issue an adjustment needs to be made. You can do that was on the phone very contextual. And it creates a huge differentiator for businesses. So they should think about it from that perspective as well.

>>Jonathon Traer-Clark:
What about from the fraud perspective? If you're moving money faster, how do we ensure that there's, integrity around the whole process in the operation? I mean, we could if you could give us an insight into, if you like, the controls that we have in place, both, as I guess, the pitcher and the receiver.

>> Art Brieske:
Yeah, I mean, that's great, Jonathan. It actually, as we all know, fraudsters go where the money is. And, as volumes increase and as instant payments increase in terms of the value that's transitioning through the infrastructures, naturally fraudsters will go there. So of course, we're not just sitting around waiting for that to happen. We're doing that now. We are making sure that from an industry perspective, we're doing a much better job than we have in the past with sharing information, so getting in front of it. So when we see a bad actor enter the infrastructure, we're letting each other know and we're shutting it down much quicker. But what we're doing is we're building off of that and creating new ways to mitigate the risk of fraudsters entering in. But I think the biggest thing is ensuring that we create much faster responses and we're also being more preventative as well. So shutting things off before they actually happen, if we see certain trends or if we see certain red flags.

>>Jonathon Traer-Clark:
Fantastic. Is there anything else you'd like to leave our listeners with as kind of key messages? You've mentioned obviously the benefits, we talked about the operational impacts in both positive ways and certainly, again, extending Treasury's reach in the organization, the client experience. But anything else you think that people should take away from this?

>> Art Brieske:
Yeah, I think the biggest takeaway that people should think about, particularly on Treasury side, is look. Instant payments is new. It's not here to replace, you know, wire, ACH or card. It's here to replace cash and check. And it's here for the future. When central banks move to a digital currency, it can be that rail to move money. Think about it in terms of the infrastructure that you need and the opportunities that would come with that. And also think about it in terms of your partners as well. So, at WF, we're investing heavily into this and we're trying to create a differentiated, scalable, always available, interoperable payment experience with instant payments. So I would encourage you to think about it within your treasury infrastructure, but also your partners as well in terms of what they're doing.

>>Jonathon Traer-Clark:
Art, thank you ever so much for your time. I think you definitely lived up to your nickname, King of Instant Payments. We appreciate you. I'll see you on another podcast maybe, but for now. Thank you, Art.

>> Art Brieske:
Thank you Jonathan. It was really nice to be here.

>>Jonathon Traer-Clark (Disclosures):
Global Treasury Management products and services are provided by WF Bank, N.A. WF Bank, N.A. is a bank affiliate of WF & Company. WF Bank, N.A. is not liable or responsible for obligations of its affiliates. Deposits held in non-U.S. branches, subsidiaries or affiliates are not FDIC or CDIC insured. Deposit products offered by WF Bank, N.A. Member FDIC.

## Evolution and innovation in payments

In our next podcast, Joe Hussey, WF Payables and Receivables executive and Chair of the Nacha Board of Directors discusses the evolution and innovation in payments, from checks to the multitude of payment networks and platforms available today. Joe also discusses common themes we are hearing from clients, including the challenges related to payment fields, reconciliation, and fraud. Moving into the future, Joe outlines the continuum of payments, including ACH, virtual, wire, and ever-evolving payment rails. Heightened client expectations, coupled with a dynamic landscape make this podcast a must-listen for treasury professionals.

RO-3524269

### Listen to episode 2

Audio: Listen to episode 2

### Transcript: Listen to episode 2

>>Jonathon Traer-Clark:
Hello and welcome to another episode of Treasury Takeaways. My name is Jonathan Traer-Clark. I'm a managing director at WF, and today I'm absolutely delighted to be joined by Joe Hussey, who is one of our Payables and Receivables Product Executives in our Treasury Management Business. Welcome, Joe. It's great to have you.

>>Joe Hussey:
Thank you. Glad to be here. I'm Joe Hussey and I'm the payables and receivables executive here at WF. I'm also the current chair of the Nacha board. Nacha oversees the ACH network in the US. In both roles, I see our job to make payments seamless, fast, and efficient from a same day ACH to instant payment. We seek to drive innovation to solve the needs of our clients in a safe and secure process. Nacha has a similar focus, and the board has been dedicated to focusing on speed of payment, data delivery and fraud protection initiatives over the last few years. As we continue to see payments transition and innovation occur around those payments, I assume and expect there will be a lot more innovation ahead of us yet to come.

>>Jonathon Traer-Clark:
Fantastic. Perhaps you'd like to tell our listeners a few of the highlights of the things that you do, both in terms of WF, but also how you represent, if you like, the wider Treasury community.

>>Joe Hussey:
Yeah. Thank you. So from a WF perspective, I look at our role as delivering products out to the clients, both the traditional products as well as the innovative products and the emerging products that are continuing to come on board in the payments space. As I look back, 10 or 15 years where we were thinking that everything was still paper for the most part. We had minimal electronic and digitization out there, too. If you spring forward, we've seen a lot of changes and we've seen a tremendous amount of innovation occur in the space. But yet we still know we have about 13 billion checks out there that we're still processing every year. So the one step forward, two step backs somehow feels like it applies. But when you look at it across, you know, the last 20 years or so, you know, we've taken 20, 20 billion checks out of the industry. We just are stuck on the last piece. The other component that you ask about was, how do we see what we do today, and how do we deliver that for WF as a firm and then broader in the industry? Probably the industry has become one of the more critical perspectives, because if there's one thing we've learned is we need this ability for a transaction to be easy across multiple platforms. There are certainly across multiple networks. And as we continue to innovate, that ability for a payment to move seamlessly between two providers and even between two clients is incredibly important for us. And everything we do, we try to focus on how quickly and efficiently can we move that payment.

>>Jonathon Traer-Clark:
I know you've used the term payments continuum, and when I've spoken to you in the past, but you also talked about different networks, different types of payments. I mean, forgive me, it's surprising to think that if you like moving money around transactions representing the movement of money around. Is it so difficult? Can you just kind of give us a few clues as to why that is the case today?

>>Joe Hussey:
I like the term the continuum of payments because what a payment is today, it may not be tomorrow. And the way we look at how we evolve payments, especially when we're working with our treasury groups across the multiple industries, moving a health care payment across the industry can be very different than moving a simple cell phone bill or a utility bill across it. So when I talk to multiple clients and we talk about what is the payment structure, what is the payment architecture, this continuum of - it depends on what you're trying to pay. If you're a large retailer, a lot of your receipts are going to go through the credit card industry. But yet when you turn it around, you have to buy goods and services, and those are going to go across a completely different rail, which may be ACH card, virtual card or wire. And so as I look across at what I've tried to get clients to open up with is what are your biggest pain points and what would you like for us to solve for you? I've never been really one of those, “if you build it, they will come”, I'd prefer to go find a problem and solve the problem for a client, because in our industry, if you solve for one client, you've probably solved for multiple vendors or counterparties. If you can do that, you now have an ability to say, it worked over here. Does the same thing apply to you as well? So regardless of the industry, you're touching base in, you can actually say this works for health care. Does it work for the auto dealerships? Does it work for aerospace? And you can find the commonality within those industries.

>>Jonathon Traer-Clark:
Thank you. But when we talk about payments, which I think is typically how the industry has a conversation, the other side of a payment, of course, is a receipt or receivable. Right. So I am pleased that you have both hats. That's great. And obviously for our clients and perhaps. The industry. You know, the receiving of money in that reconciliation is as important, right?

>>Joe Hussey:
Definitely. So I think you mentioned earlier, I also sit as chairman of Nacha. And the way the industry is evolved, I'll say over the last probably ten, ten, 15 years is we used to focus a lot on payroll and moving payments out. Right. What we really have focused on now is how do we make that receivable as seamless as possible? And when you look at what we do here, moving the money is often the less important piece. The most important piece is that I just bought something from you, but you need to be credited for my payments. So the fact that you have the money sitting in your organization, but this vendor hasn't been credited with it, is a problem. But also, if you look at the amount of emerging innovation that's occurring within our industry, the fintechs and everyone that we partnered with are now working together to try to simplify. How do we reconcile your payment to my invoice? As quickly as we can and move that into a working capital for the client.

>>Jonathon Traer-Clark:
I'm so pleased you kind of went into that space about the reconciliation, right? I mean, I can remember a time when field size limit was a massive constraint, within transactional information as it cost around the systems because, frankly, there was a real dollar charge or cost to it. And because of the size of mainframes and all the other sorts of systems, whereas nowadays, obviously infrastructure and telecommunications and indeed just technology as a whole has evolved enormously. So presumably, and not wanting to put words into your mouth, but that should make the process of reconciliation much easier, particularly with AI.

>>Joe Hussey:
Yes. Let's talk about just field size. All of us can harken back to the Y2K events, where we were all arguing over the two digit or four digit year, right. Where we've evolved from there, though, is with the new file formats, we've added more and more information to our transactions that go through. We even have transactions today that aren't really monetary transactions. They are just simply information transactions that we're passing back and forth, whether it be within Swift, within wire, within ACH, within the card networks, the more information we can pass, the better the reconciliation is. And then I'll add to that, the better the reconciliation is, the better the customer experience is. Whether you are a corporate client or a consumer client working with your biller, the ability to have that information out there and visible on both sides of the transaction is really one of those changes that we've seen that has come into effect, and it started slowly. We added a few more data fields here. We added a few more characters over here. But what it's evolved to is I can almost now literally send a PDF for every single transaction if I chose to. Now, there are some architects out there who just cringed when I said it, because we don't need that on all of our transactions, but that is the ability we have now is we have data, we have image, and we have monetary all sitting within a framework that allows us to keep that package together, that enables then the final client to say, I can reconcile this, and I can also move the money much more quickly into my balances.

>>Jonathon Traer-Clark:
So interesting there. We talked a lot about, I'm going to call it client experience. It's becoming much simpler for the transactions to represent not just value transfer but information transfer, which obviously facilitates a much better end to end user and customer experience and probably business experience overall. But all of this requires not just investment from our side as an industry, to make the mechanics work and operate better, but also for the customers, the end users. In your experience, what sort of makes a client sort of feel compelled to kind of either update their systems or think about modifying the way they transmit information to us, and how might they go about it? The best way.

>>Joe Hussey:
I'm going to start with the latter half of that question about how do they go about it, and then we'll talk about why do they do it. Only because I think everyone gets afraid of, how do I go about it before I actually answer, why am I ready to do this? Or why do I need to do it? My perspective on how to go about it. And I talked to several larger groups, if you're waiting on that final solution, that will be the end all, be all, you'll probably be waiting a long time. And as we look at the evolution of our applications and then the evolution of all of the changes that are out there, a lot of the hesitancy, I think at least when I came into banking, candidly, in the 80s, was, you know, you wanted to go with one of the big powerhouses that were out there because you just knew it was going to be safe for you to do that. There was also this theory that you don't want to be the first on any application, because you're debugging it for a client at the current pace of change. Look at where that has changed. And then think about if I wait, what have I lost in waiting? And if I'm waiting to change, has one of my competitors going to leapfrog me because they went ahead and made a bet on an on an application? So that's my, what do I think about the change and how do I think about the change? Answer. Because I think as an organization, both banking and corporate and government, you have to answer that second question. Am I willing to make the change now? Why do I make the change, which is what you asked first. I think it's fairly straightforward. When you look at where are your consumers going and where are your vendors going or the people that you're trying to pay? Are the people buying products from you, even in corporate to corporate, that has changed tremendously, where we now go online to look at our invoices, even if you're a corporate to corporate, if I am buying from a large consumer supply company, I probably know every day what's on my shelves and what do I need to purchase. If my system can't keep up with that, or if, as I'm building out or looking at what are the new products coming to market and I have a consumer website, what is more frustrating for us as a consumer than to order something, only to get an email saying it's not available later, right? Expectations have been set on the consumer side that if it's not available, it says that when I pull it up, right. That's just the way the marketplace’s work. Why would my corporate applications not do the exact same thing? You and I know, the reason is because the corporate applications - with the plural - probably has multiple receivables sitting under it, payables sitting under it, inventory from mergers and acquisitions that now need to be combined. So the answer I always give, and especially when we're talking to clients thinking of what investments are important to them, the first thing you need to do is to make the corporate experience almost as seamless as what it is when I go home and I try to do a consumer transaction. Because regardless of what we do in our day jobs, our experiences are usually formed on what we get to do on our end, our laptops and our mobile phones at home.

>>Jonathon Traer-Clark:
I love the way you put that right. I mean, the analogy I use when I try to describe these things to, you know, how non-financial folk is when you go to buy a car, you want to understand how it feels to drive. You trust, if you like, that, the mechanics and the operations will work. And so that defines your experience. But it also defines not just your experience at the point of purchase, but also for the lifetime of it. So the same analogy here in the financial services sector, of course, is that the consumer experience, to your point, should mirror the one at home. And yes, the underlying mechanics are important, but how the engineers, if you like, of the organization, build those, that's where they should be focused. Whilst the overall user experience is much more one of just facilitation of transfer.

>>Joe Hussey:
I had an interesting dialog with a group of analysts that were coming into the firm one time, and we were talking about the in-office experience versus the at-home experience, and I realized that my in-office experience in ‘85 was more technologically advanced in the office than I was at home with probably my VCR, Betamax, or whatever I had back then, right? Today, if you flip that around, the tools we have at home and our ability to go have double monitors and triple monitors and everything else we can have at home, may be completely different than what we get when we step into our work environment, which is prescribed by our companies. Right. And I thought that was an interesting analogy that I've used with clients before. As we think about both hiring and next generation of Treasury managers coming in, all of those things come together to how do you entice the right people and as well, how does your working environment mirror what I can do at home? Can I, you know, can I make it simple?

>>Jonathon Traer-Clark:
I love that analogy. It's so true, right? My HP 12 C sitting on my desk at home is not the same as my working for it, wasn't it? Back in the days when we were starting our careers, shall we say. It would be, remiss of us, obviously not to mention, particularly, I think even news this weekend about some data leak, shall we say, how should a client think about, I guess, fraud and security and might I think to some extent it's a continual chasing mechanism. People are trying to keep up with it. But I mean, what's your perspective? What advice would you give our listeners?

>>Joe Hussey:
It's a funny topic when it comes up with clients, because if you haven't dealt with fraud and security, you probably look at it as a complete sunk cost that you don't have a return on. If you've dealt with the fallout of a security breach or even fraud on your own bank accounts, you quickly see it as an investment and a very preventative tactic, right? The problem we have is, is there is no one right answer to fraud and security, right? There are multiple ways you can tackle each of those fraud in and of itself, will, always evolve to the most sophisticated criminal, if you will, because, you know, everyone's in business to get paid including our criminals. Right. And they continue to up the bar, unfortunately. When we look at things like business, email, compromise, there are tools you can use without a doubt. But those are procedural controls that in many cases need to be applied within a Treasury organization that often are overlooked because of legitimate other higher priorities until something occurs. Right? And then everyone says, wait a minute, how did we let this occur? You know, you move to best practices, and that happens. If you go to a conference, you don't go to a conference anymore without multiple sessions available on fraud and security practices. I think that is really upped the industry overall. So we have stopped a significant amount of it, but there are just more people out there trying to perpetrate against the industry today. Without a doubt, the industry itself has also evolved. I spoke about Nacha before. We probably spend well over a third of our time talking about fraud and within the industry and the tools that we can use. You've seen rule changes that we've put out there that tried to layer a standard approach to everyone, because when you're in a counterparty market, everyone is exposed at the most vulnerable level some time. So we worked on that. If you take it one step further and you say, okay, what can I do to prevent fraud within my company? Every client needs to ask themselves that because it's probably different for every company. I'll close with the security part of everything we do has become so paramount to the trust of our client. And so when I started this answer, I mentioned the fact that it's never important until it's important, losing the trust of your client. And I won't name examples, but all of you had a couple that probably just popped into your head. Once that trust is lost, building back that trust is incredibly difficult, right? And we've all spent in our organizations, you know, some over 100 years building that trust, then gaining it back once you've lost it, because of a security or any other interjection of fraud into the system, puts the whole industry in a problem. So I think we have to look at both incredibly important. Does everyone need to spend 40% of their time on it? If you haven't, you will.

>>Jonathon Traer-Clark:
So there's an awful lot of information there. And I just also want to connect back to some of the things that you said at the beginning, because you also said transactions don't just represent monetary transfer, they can represent information. And one of the things that occurred to me was, with the advent of if we like more paper to electronic, there's also the opportunity there to use information services like account validation and whatnot to try and ensure or at least give a how shall we put this a greater degree of confidence. Either the recipient or the beneficiary is who you think it is, and therefore, you know you can feel comfortable that your business is operating in a secure manner as possible. I'm guessing from your perspective, do you see the emergence of more solutions like that, giving clients multiple layers of defense?

>>Joe Hussey:
Without a doubt. When you look at it, account validation and it can mean a lot of different things to different people, doesn't mean that this account is good. Doesn't mean the account is open. The way I look at it, and the way we have tried to talk about it, is use a risk-based approach to it. I think when you move up the continuum, though, if this is a new vendor that is setting up for the first time or two, someone's calling in and saying, hey, I had to get a new account number. And the worst thing to have happen is they call and say, I had fraud on my account, I need a new account. Well, they're the ones frauding you because they didn't get a new account, right? That's the time where there's clearly a need to do an additional level of due diligence on that account number, because the volume and the value you're about to send across that is significant and could represent a significant, charge off to the company. The solutions out in the industry today are varied. And, you know, it goes from a very basic which have a nominal price to them, to the more complex that have a more sophisticated.

>>Jonathon Traer-Clark:
The point is, if you have a breach, you have a breach. And it's probably a failure of multiple layers, control systems, possibly people, possibly a genuine mistake, quite often a genuine mistake, and usually some element of technology as well. So the challenge the Treasury function has is that as a concentrator of how should we say financial assets, or is the allocation of capital engine, as I like to call it. You know, that responsibility isn't just about collecting, it's also about dispersing it too, which kind of brings us back to your original point. You know, it's customer experience led.

And as the name of the podcast suggests, what are our takeaways from this? Well, I think there's three of them. I'm going to start, as always with customer experience. Right. One of our responsibilities is to make sure that, as we said, our clients and customers really do experience the very best of the capabilities that we have to offer. But in order to do that, we need to also be very welcoming and think a lot about changing innovation. And I think, Joe, you said it best. It's about having conversations with others. It's about listening and learning, being open to new opportunities, but also taking a measure of that experience and understanding what's worked well in the past and what may still be appropriate today. Which brings me neatly onto the third point I would make, which I think is around fraud and security. And that is always going to be a continuum in the way that we have to operate and run our businesses. We must be aware that. We have a responsibility, to operate and disperse and collect, if you like, the moneys and the capital that flows through our ecosystems. So those are my three takeaways for today. And again, Joe, thanks ever so much for your time today.

>>Joe Hussey:
Thank you.

>>Jonathon Traer-Clark (Disclosures):
Global Treasury Management products and services are provided by WF Bank, N.A. WF Bank, N.A. is a bank affiliate of WF & Company. WF Bank, N.A. is not liable or responsible for obligations of its affiliates. Deposits held in non-U.S. branches, subsidiaries or affiliates are not FDIC or CDIC insured. Deposit products offered by WF Bank, N.A. Member FDIC.

Global Payments and Liquidity products and services are provided by WF Bank, N.A. WF Bank, N.A. is a bank affiliate of WF & Company. WF Bank, N.A. is not liable or responsible for obligations of its affiliates.

Deposits held in non-U.S. branches, subsidiaries or affiliates are not FDIC or CDIC insured. Deposit products offered by WF Bank, N.A. Member FDIC.

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