Multinationals are empowering treasury to drive business growth - Industry roundup: 29 July
by Ben Poole
Multinationals are empowering treasury to drive business transformation and growth
A global survey by DBS has revealed a significant shift in the role of treasury and finance functions within multinational corporations – with these departments moving from traditionally supporting roles to providing strategic leadership. This comes amid a rapidly changing business landscape marked by supply chain shocks, rising geopolitical tensions and climate change.
Some 94% of respondents indicated that their treasury and finance functions are playing a more prominent role in shaping corporate strategy, according to the report entitled ‘Pivotal: How treasury and finance enable a new era of globalisation’. Another 80% said these teams actively drove innovation and new product development.
In addition, 79% of companies said they were leveraging treasury and finance expertise to drive procurement and supply chain reconfiguration strategies. Other emerging areas of involvement included digital transformation (75%) and sustainability-related activities (71%). These are on top of the teams’ existing responsibilities including cash and liquidity management, compliance, and risk management. The report findings underscored the growing strategic influence of these departments amid an increasingly complex business landscape.
The majority of companies looking to expand their operations and penetrate new markets expect these activities to be driven by growth within Asian markets. Some 76% of respondents said building top-line growth in the region is a key priority over the next two years. One in two companies said that Asia’s long-term growth potential and strategic location for supply chains were the key draws for regional expansion.
In line with the need to drive strategic priorities and enable diversification plans, companies cited the increasing importance of securing multiple financing streams.
Some 76% of businesses said that diversifying sources of financing – such as tapping lenders in different markets – is necessary for expansion across Asia. Another 74% said selecting a suitable location for a regional treasury centre (RTC) is critical. Key considerations in choosing a location included access to global markets (74%), a stable political environment (71%), a conducive business environment through business-friendly policies (70%) and availability of a diverse talent pool (70%). Having a financial services partner with deep sector knowledge (40%), strong market presence (38%) and technology capabilities (37%) was another critical factor in enabling success.
The findings give a deeper understanding of the evolving role of treasury and finance teams amid a new era of globalisation. Companies that embrace this change by upskilling, embracing new technology, embedding the right culture to enable teams, and working with a network of trusted partners to adapt to these new responsibilities stand to unlock new opportunities in a dynamic global marketplace.
A total of 570 senior executives from 15 markets across Asia Pacific, Europe and North America were surveyed. Over 85% of respondents were from companies with an annual revenue of over US$1bn. The study was conducted by FTLongitude, the specialist thought leadership division of the Financial Times Group.
Trovata and State Street look to streamline corporate investing
Trovata has announced an integration with State Street’s Fund Connect. This integration will enable joint clients to access Fund Connect as a third-party investing and trading tool with access to over 25 fund managers from the Trovata platform. Finance and corporate treasury teams will be able to determine liquidity needs and seamlessly invest excess cash with Fund Connect, according to a statement from the pair.
Understanding their company's cash position to invest excess cash has historically been a challenging, disparate process for treasury and finance professionals. Often, they collect bank files, aggregate and normalise data and build reporting in spreadsheets. It can take hours of manual work to gain visibility, all before logging into an investments portal to take action. Trovata aims to digitally transform the treasury function, using bank APIs, AI, and automation to offer real-time reporting and forecasting. With this intelligence, companies can now take quick action to invest with Fund Connect through a single interface.
With Fund Connect, treasury teams can gain real-time global portfolio access, enabling comparisons across factors, including fund managers, fund types, and currencies. Fund Connect trading and holdings data will flow into Trovata, consolidating operational and investment oversight in one unified experience.
Fund Connect is a part of GlobalLink, State Street's global suite of electronic trading platforms that offer a single interface for managing short-term liquidity through an innovative electronic trading solution. Fund Connect supports multiple money market account structures, including fully disclosed, omnibus, and nominee, which can be used in various combinations through a single login.
ICC issues guidance on responsible business in challenging contexts
The International Chamber of Commerce (ICC) has issued guidance to support businesses faced with challenging situations that cause stay-or-leave dilemmas, requiring crisis management and due diligence to identify, prevent and mitigate the impacts of company decisions on human rights, society and the conflict.
In situations of conflict, such as an armed conflict, a gross human rights violation, the imposition of trade sanctions, or a governance crisis, such as a coup d’état, businesses are expected to understand their role and the risks of business involvement in the conflict to respect international humanitarian law.
When a crisis evolves, companies are under pressure from stakeholders to take prompt action, including deciding whether to remain in or exit the market while simultaneously assessing the impacts on people, communities, and society more broadly. These expectations can be daunting for companies, in particular when they do not have the prerequisites or a developed strategy to act responsibly in these contexts.
By implementing this guidance and establishing an adapted tactical planning programme for high-risk countries of operation, a company can set a solid foundation for crisis response. Companies can support their remain-or-exit resolutions with sound evidence-based due diligence through engagement with stakeholders, with due consideration of the company’s responsibilities, and by applying creative leverage.
Komgo enters secondary trade finance market
Trade finance platform Komgo has introduced a secondary market product tailored for originators and investors. This development signifies a pivotal industry effort to modernise and digitise traditional asset distribution processes.
The new offering targets a previously untouched market segment, where banks and non-bank funders predominantly rely on manual procedures to prepare and execute secondary risk participations for trade transactions. This manual process has long been a bottleneck in the efficiency and scalability of trade finance.
Since the product's launch in June, Komgo has successfully onboarded approximately ten asset sellers and around 200 buyers. The company says this early traction underscores the market’s readiness for digital transformation in trade finance.
Komgo’s immediate focus will be on expanding the number of sellers utilising the platform, with the expectation that a corresponding increase in investor participation will naturally follow. The company strategically positions itself for growth, betting on a subscription-based model rather than a per-transaction fee structure to attract and retain users.
This move by Komgo reflects a broader trend in the financial industry towards digitisation, aiming to enhance operational efficiency and transparency in trade finance markets.
Sage partners with Stripe to give SMBs control over their cash flow
Sage has expanded its partnership with Stripe to help improve cash flow management and payment processing for SMBs. The partnership with Stripe provides Sage customers with more options to pay and get paid quickly.
Using Stripe’s financial infrastructure, Sage plans to offer its customers a trusted solution to help ease cash flow and simplify financial processes - from streamlined checkout and payment processing, to Tap to Pay contactless payments, and auto-reconciling bank transfers.
Supporting customers globally, Stripe’s integration into Sage is currently available in the UK through Sage Accounting, Sage 50, and Sage 200. Stripe is also fully integrated into Sage Network, enabling customers to plug into the broader Sage ecosystem, choose additional applications and features such as Sage Connect, automate AR and AP processes, and help manage their cashflow and payments.
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