Deloitte has released its 2019 Global Corporate Treasury Survey. The poll of over 200 corporates considered the challenges and mandates that treasurers are facing, the current use of treasury management systems and the new technologies are available to treasurers, as well as to what extent have treasurers utilised opportunities and solutions that new technologies offer.
The survey found that treasurers are increasingly accepting the mandate to become a profit, not cost, centre. The number of treasurers who believe that it’s a critical mandate for the treasury function to become a profit centre nearly doubled from 15% in 2017 to 27% in 2019. Liquidity risk management (97%) and being a steward for financial risk management (94%) are by far the most critical mandates set by the CFO.
The top strategic challenges for treasurers have shifted in the past two years. Visibility of data, into areas such as global operations, cash and financial risk exposure, for example, is the most challenging area for treasurers today, according to 62% of respondents. This was up from the second highest challenge in 2017 when the survey was last conducted, when visibility of data was a strategic challenge for just 43%. FX volatility is still a key challenge for half (50%) of respondents, and although it has moved down from the top position since 2017, it remains relatively consistent as it was a challenge for 52% two years ago.
Concerns about lagging tech systems have also shot up. Almost half (47%) of treasurers report that inadequate treasury systems is their biggest challenge, up significantly from 30% in 2017.
Some technologies are viewed as critical to treasury, but adoption is lagging. Approximately 70% of treasurers agree that visual analytics and robotics are important, if not critical, to treasury - and these are the two most applied technologies so far. However, the cost of ownership and the perceived complexity of implementation and maintenance of treasury systems remain a barrier to adoption of the technology. Treasurers reported that their main drivers for applying new technologies are mitigating risk (68% critical and very important driver), process automation (72%), and extensive data analysis and insights (51%).
In terms of regulatory concerns, the survey found that changes to the International Financial Reporting Standards (18%) and ripple effects of Brexit (17%) are most likely to affect treasury functions over the next 12 months. The high percentage selection for IFRS is likely due to IFRS 9 - financial instruments standard and the changes to hedge accounting rules.
Over 208 companies participated in the 2019 survey. The largest percentage of respondents were from the consumer and industrial products industry. Around 70% of the companies in this survey have between 1 and 15 FTEs in their treasury function. More than 30% of participants have a revenue above US$10bn equivalent. The information obtained during the survey was taken “as is” and was not validated or confirmed by Deloitte.
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