Optimising Our Performance
WATC’s ability to provide the State with ready access to capital markets and a wide variety of financial offerings is supported by our considerable experience and expertise, together with our systems and processes.
WATC continually looks to improve how we engage with clients, increase efficiencies in our systems and processes and invest in our people and capabilities.
Streamlining Agency Engagement
In June, WATC held a client forum about the State’s finances, the economy, financial markets and client borrowing, and their interconnectedness. This included explaining how, once new borrowing limits are approved, WATC works closely with each client to assess their debt financing objectives, define their risk appetite and assist them to choose the most appropriate debt product that supports their debt management strategy.
To assist clients in the efficient management of short- to medium-term cash surpluses, a new over-arching Investment Facility was introduced in 2018/19, which gives clients access to all of our direct investment products. This includes the new Term Deposit Facility, a practical investment alternative focussed on aspects not well served by comparable banking products.
The rollout of our Client Portal continued in 2018/19, with over 90 per cent of state government and 75 per cent of local government clients now registered. A number of new features were also introduced, such as the provision of historical interest rate time series for common borrowing products. Additionally, a range of end of financial year self-help services are now available, which allow clients to access official audit reports on the Client Portal as well as grant temporary access for their audit firm.
Improving Systems and Building Capability
After a successful tender and due diligence process, WATC commenced a major initiative to implement a new treasury management system. Replacing existing technology, which has been in place for nearly 20 years, this system is core to our management of financial market activities and client loans, investments and foreign exchange. We have also taken the opportunity to review associated processes to see where internal efficiencies can be gained.
Investing in our people ensures WATC is best placed to achieve our vision and objectives, now and into the future. As such, a human resources strategic plan was developed to identify, facilitate and guide people related policies, processes, activities and practices.
Managing and Monitoring Material Risks Effectively
WATC operates in a dynamic market which presents both opportunities and risks that could materially impact our ability to meet our responsibilities to our clients, investors, the State, our Board and other stakeholders. Our business is exposed to a range of strategic, operational, compliance and financial risks associated with operating in global financial markets. We have a Risk Management Framework that, together with corporate governance and organisational systems and processes, provides a sound framework for identifying, assessing, managing and the ongoing monitoring of material risks.
During 2018/19, the Board approved a revised Operational Risk Management Policy, which sets out how we measure and control operational risks that threaten to have an unacceptable impact upon our business. Through the regular monitoring and reporting of operational risks and their controls, our exposure to unacceptable risk-related events can be reduced and the impact of such events, should they occur, are mitigated.
Concurrent to this, a review of our foreign exchange risk management policies was conducted to ensure that they remain relevant and reflective of our business, objectives and the Board’s risk appetite. This included the review of our hedging strategies to ensure that they continue to mitigate foreign exchange risk as intended.
WATC also met both of the Board’s balance sheet debt metric targets for 30 June 2019: debt maturing within 12 months to be less than 20 per cent of total debt and maturing debt coverage ratio of at least 100 per cent.
The new treasury management system is expected to be operational during the first half of 2020.
Transition to infrastructure as a service where appropriate within GovNext capabilities.
Continue development of cybersecurity capabilities and the ongoing evolution of business continuity and disaster recovery.
Work collaboratively with clients on the continual development of the Client Portal to improve efficiencies and become a hub for client information.