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Corporate treasury in 2015: snapshot of a risky business

A survey of corporate treasurers and CFOs, carried out for the Boston Consulting Group (BCG) and BNP Paribas, has found that risk management is the number one priority for financial professionals.

The survey report puts this in the perspective of the group treasurer's expanded responsibilities since the financial crisis in 2008, which made risk, liquidity and cash management a pressing board-room issue. It notes that treasurers “are now looking to manage their expanded responsibilities with greater efficiency and sophistication... and are bringing an increasingly strategic lens to their remit.”

Together with the need for strategic responsibility from treasury and a strong focus on risk management, treasury departments in multinationals are increasingly centralising their operations. The report states: “More than 80 per cent of treasury teams have already chosen to centralise strategic decision making around global treasury policies, cash management, key investment-management operations, funding, and hedging.”

The survey also found that:

  • As financing needs increase (partly as a result of banking regulation), treasurers are looking more closely at working capital financing (WCF) solutions, particularly supplier financing. Survey results revealed that 25 per cent of treasurers with WCF responsibilities said they plan to increase their use of supplier financing in the near term.
  • Around 80 per cent of large corporations have – or will soon have – some form of cash pooling in place but only 50 per cent currently pool cash on a global level.
  • About 35 per cent of treasurers said that setting up a payment factory is a key priority – second only to physical cash pooling and electronic bank-account management (e-BAM).
  • The two top qualities treasurers look for in their transaction banking partners are broad product knowledge and creative ideas and solutions.
  • Treasurers have high expectations for data enrichment, an emerging interest in analytics but a limited interest in mobile services.
  • Corporate treasurers are demanding better, more integrated, multi-language systems that offer a consolidated view of liquidity. The current market, which consists of fragmented solutions from single banks, some multi-bank platforms and some non-bank platforms, does not meet treasurers' needs. Treasury management systems (TMSs) are gaining in popularity and treasurers value the systems from independent non-bank providers because they believe they limit counterparty risk.
  • Market and economic risks are the greatest risks for treasury activity in 2015, followed by cyber crime and fraud.

The survey contacted 500 corporate treasurers and CFOs around the world, with consolidated annual revenues of more than $500 million. It also included interviews with 50 corporate treasurers and CFOs from multinationals with total revenues of approximately $1 trillion and more than $75 billion in cash and cash equivalents.

The survey was conducted by Expand Research (a wholly owned subsidiary of BCG) for BNP Paribas and BCG.

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