The treasury - and the treasurer - of 2025 will look very different to that of today, as detailed in the 2019 Journeys to Treasury report. Treasury is becoming more relevant as the need to manage liquidity and risk internationally becomes more important and visible at Board level, and more strategic as it becomes more deeply involved in the commercial aspects of the business. As treasurers extend their reach and influence, the skills requirement is changing while the combination of data and available technology is creating valuable new opportunities.
Embracing change can be daunting, and treasurers may often think that other treasuries are ahead of their own. Rather than taking an idealised view of treasury, the Journeys to Treasury report acknowledges the reality that although some treasuries have digitised more fully than others, everyone has organisational, human, technology and budget constraints that shape their priorities and capacity.
In the fourth edition of Journeys to Treasury, BNP Paribas, PwC, SAP and the European Association of Corporate Treasurers (EACT) come together once again to explore some of the priorities that treasurers have identified, and which are shaping the treasury of today and tomorrow:
Payments and collections
As digital business models emerge, new payment methods are proliferating. Treasurers can play a key role in supporting business units by proposing new payment and collection methods to differentiate the experience of customers and suppliers.
“Whether treasurers are leaders or influencers, they have a vital role to play in evaluating, facilitating and managing the effects of different payment and collection methods," said Bruno Mellado, global head of Payments and Receivables at BNP Paribas. "By doing so, they can help to drive the company’s success in a changing, increasingly digital, environment.”
FX risk management
Managing foreign exchange (FX) risk remains one of treasurers’ highest priorities, and FX volatility can make a major difference to earnings.
“Senior executives and company Boards continue to be motivated to understand the potential impact of FX volatility and limit negative effects on the business," commented Didier Vandenhaute, partner at PwC. "Consequently, treasurers are renewing their focus on hedging strategies and optimal execution to manage risk and reduce the impact of volatility. Given limits on resources, automating some of the day-to-day business, including the use of robotics, machine learning and artificial intelligence, can give treasurers time to spend on more complex and strategic activities.”
With expanding technology opportunities and lower barriers to adoption, treasurers have an unprecedented ability to automate processes and enhance decision-making. However, the success of these endeavours relies on high quality data. To get the best from new technology, treasurers and their partners across the business need to adopt a data-driven mindset.
“To gain the full value of new solutions, treasurers need to look at their needs and identify where pain points are occurring," noted Christian Mnich, VP and head of Solution Management, Treasury and Working Capital Management at SAP. "In many cases, problems with underlying data prevent treasurers from fulfilling basic treasury requirements, let alone developing advanced capabilities. Improving the completeness and integrity of data is therefore becoming a significant priority. With treasury data often owned and held in different parts of the organisation, this will often require a company-wide shift towards a data-driven mindset.”
The future treasury
Treasury is still a relatively new profession, yet has become increasingly important as corporations expand their international reach. In a fast-changing business and digital environment, and with an expanding set of responsibilities, how can treasurers prepare for the future? François Masquelier, deputy chair at the EACT said:
“As treasury structures, processes and controls are increasingly shaped by technology, and the role of treasury continues to evolve, treasury functions need to reinvent themselves to remain relevant and enhance their value to the business. The need to engage and collaborate with internal and external partners will be also be amplified in the coming years.”
CTMcast - 11 October 2019: Part I & II
Nick and Gene discuss: Only ONE KYC/KYV solution? Swift gpi link service; Confidence falls due to cyber threats & AI risks
Treasury management systems ‘falling short of needs’
There’s increased recognition of technology as a risk management enabler, but many TMSs aren’t full supportive, a Citi survey finds
BNP Paribas announces strategic partnership with Kantox
The partnership aims to help treasurers automate and streamline FX workflows.