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How corporate treasury needs to get ready for next phase/spike in COVID-19

The Treasury Coalition, which includes GTreasury as a member, has surveyed corporate treasurers across the world for their ongoing reactions in the face of the COVID-19 pandemic. CTMfile discussed the survey results and their implications for corporate treasury departments with Mathilde Sanson, GTreasury’s Chief Customer Officer.

Which of these findings stands out most?

Corporate treasurers really led the way early on in anticipating – thus far with particularly good accuracy – what the road to pandemic recovery was going to look like. Collectively, their takes on the situation have proved more predictive than a lot of the other forecasts and data extrapolations out there. While April and May saw a bottoming out in treasurers’ opinions around the pandemic’s harmful impacts, their improved outlooks could yet be curtailed by new case spikes (especially here in the United States). I recommend treasurers and other financial professionals regularly check the Treasury Coalition’s continuously updated surveys. It’s a unique resource for understanding how peers are responding to ongoing uncertainty.

How ready are treasurers ready for a second wave?

The work that a treasurer has (or hasn’t) done to prepare so far will determine how effectively they’re able to weather a second wave. But from our vantage point, treasurers are very active right now in ensuring the right levers are in place if and when volatility continues. In fact, over the last five months, our client base has set new records with the number of add-on services they’ve requested. Treasurers are also telling us where they’ve identified particular weak points in their preparations, and are eager to connect with software providers able to help fill those gaps. Treasurers are making it clear they don’t want to be caught flatfooted, and that they’ll have the tools already in place to combat whatever comes next.

I do think that businesses behind the curve in automating their treasury processes will have more difficulty with a potential second wave. Considering the sharp rise in real-time cash reporting tasks (reporting that is now more often including broader executive team engagement), organizations that lack a treasury management system with effective automation will struggle to complete those tasks efficiently. Treasury and finance teams will then apply their available bandwidth and resources to deliver that reporting rather than to projects that advance their automation capabilities, which will only exacerbate ongoing challenges.

What business continuity strategies leveraged by treasurers have been the most successful?

Treasurers were quick to heighten focus on their cash positions and the accuracy of their cash forecasting, starting from the beginning of the pandemic. We saw many of our clients also rapidly consolidate their global cash positions to the United States. In our 34-year history, we’ve never before seen client cash movements across our platform as large as those made in March. The uncertainty in March and April as to how long the pandemic’s impact would last (and at what scale) also caused a lot of corporate treasurers to increase their cash positions by drawing from lines of credit. 

In response to the pandemic, treasurers now need to present executives and corporate boards with clearer and more frequent cash visibility reports. We’ve also observed that treasurers and CFOs are actively empowering their executive management with the information to implement faster and necessary changes across their organizations that strike the right liquidity balance. 

In my opinion, we’ll likely see this degree of quick and wider access to real-time cash visibility as the standard going forward.

Where do you see treasury and risk management systems heading in near future?

For quite some time, the goal for treasurers has been to integrate end-to-end solutions that match and support their workflows. This requires a treasury and risk management system (TRMS) that can deliver closely integrated solutions for cash, risk, payments management, and more within a singular platform. Treasurers also require a TRMS that readily connects with all payments systems (including FX, fraud, etc.), ERPs, and BI solutions in the greater treasury ecosystem. 

Looking forward, treasurers need those integrations among the technologies they utilize to be more seamless than ever before. As customers’ needs evolve, treasury technology must be capable of leveraging data across solutions without any obstacles or delays.

Are there some actions treasurers can take now to better prepare for pandemic-based uncertainty in the future?

Yes – the clearest and fundamental need is to remove all concerns about liquidity. Beyond that, I highly recommend treasury teams putting in the work now (if they haven’t already) to achieve cash visibility that’s as accurate as possible. Getting that right builds up a strong foundation that touches all other treasury team efforts. I also recommend expediting work on any digital automation projects in order to realize their benefits sooner than later. Lastly, treasurers should take time now to carefully review their cash forecasting methods, looking for ways to optimize the accuracy of those predictions. 


CTMfile take: Agreed: removing all concerns about liquidity AND risk in our pandemic based future is THE key driver for corporate treasury today.

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This item appears in the following sections:
Cash & Liquidity Management
Liquidity Risk Management
Cash Flow Forecasting
Dedicated Treasury Systems
General Treasury Systems
Financial Risk Management
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