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Slower top line growth and talent issues head CFO worries for 2025 - Industry roundup: 11 December

Slower top line growth and talent issues head CFO worries for 2025

CFOs anticipate slower top line growth (19%) and talent issues (18%) will be the biggest challenges for enterprise performance in 2025, according to a December survey by Gartner. The poll of 250 CFOs and finance leaders was taken during 'The Top Priorities for CFOs in 2025' webinar.

Other concerns included the strategic alignment and execution gaps on the executive team (17%), cost increases (15%), enterprise data quality (14%), and AI strategy and implementation (9%).

To help CFOs protect top line growth, Gartner experts have identified five practices that set apart a top 5% of companies that have delivered efficient growth relative to their industry peers through several economic cycles:

  1. Cycle discipline.
  2. Remove growth anchors.
  3. Cultivate overperformance.
  4. Avoid starving growth investments during cost-cutting.
  5. Address offering complexity.

On cycle discipline, Gartner notes that efficient growth leaders plan around all four phases of the business cycle: stable growth, peak, recession and trough. They practice cycle discipline by reducing operating costs incrementally when economic growth is strong and funding bold investment opportunities when economic activity hits a trough and competitors struggle to match their spending.

Consistently funding and helping bigger, riskier growth investments succeed is one of the hallmarks of efficient growth leaders, but growth anchors such as bureaucracy, career and financial risks, short-termism, or a lack of capacity can inadvertently lead business leaders away from making such investments. Such anchors can also be barriers to overperformance. 

To avoid starving growth investments during cost-cutting, the report suggests that CFOs should play the role of ‘internal activist investor’ to relocate cost rapidly and find creative funding techniques to ensure growth investments continue to receive necessary resources.

And while funding new products and services is essential for growth, unchecked proliferation can drive costs and complexity. Looking at a company’s offerings through a return on invested capital (ROIC) lens can optimise capital-efficient growth.

Gartner experts recommend that finance teams identify and insulate products that are crucial to long-term growth and then use an ROIC scorecard to assess product lines based on revenue, costs, working capital, and fixed assets.

 

US election reverberations shape StanChart’s 2025 global economic predictions

Standard Chartered expects global economic growth to be broadly flat in 2025, slowing slightly to 3.1% from 3.2% in 2024. Support from looser financial conditions and expansionary fiscal policy may be partly offset by protectionist trade policies and still-high interest rates in the US and elsewhere.

The global economy is bracing for the fallout from the US election. The clean sweep for President-elect Trump and the Republican party gives them a clear mandate to implement their policies, including significant tariffs on key US trading partners, including China. Trump’s pro-growth and protectionist policies are likely to be inflationary for the US, with consequences for the rest of the world. On the geopolitical front, Trump has said that he would end the wars in Ukraine and the Middle East, which would have far-reaching consequences globally.

The US economy has been consistently strong for the past few years, supported by consumption and services. Market calls for a US recession triggered by high interest rates proved unfounded. The Bank expects a growth moderation in 2025 as a softer labour market and wage growth cap consumer spending, but the economy is still on a sound footing.

By contrast, the euro-area economy continues to struggle. Germany and France, the region’s largest economies, risk slipping into recession. Renewed US tariffs on the EU would further weaken the region’s already-fragile economy. Exports are a primary growth engine, and the manufacturing sector has already been under pressure in recent years from elevated energy costs, weak demand, and greater competition from abroad. The Russia-Ukraine situation is another source of risk for Europe, as the potential reduction of US support for Ukraine would place a greater burden on the region. Given limited fiscal space, these pressures may force the ECB to move even faster on rate cuts than expected, widening the interest rate differential with the US.

China is likely to bear the brunt of US tariff policy. The authorities prepared for the potential fallout by delivering additional stimulus to support the domestic economy in September, aiming to boost growth in late 2024 and early 2025. In a worst-case scenario of 60% US tariffs on all imports from China, the Bank expects further stimulus focused more on consumption than investment. Net exports contributed significantly to China’s growth in 2024 but are expected to decline substantially in 2025 and while the PBoC is expected to keep monetary policy loose, expansionary fiscal policy will be the biggest source of support for 2025 growth, with China’s economy expected to grow 4.5% next year.

Elsewhere across Asia, the bank expects growth in ASEAN and India to slow slightly in 2025 versus 2024 because of monetary tightening and the moderating economic outlook for key trade partners – namely the US, the euro area and China. That said, growth in the region should remain healthy.

Despite concerns about the energy sector, the bank expects the GCC to remain a bright spot for global growth in 2025, with the region’s non-oil growth exceeding overall global economic growth. Investment in the non-oil sector will continue to drive economic activity in 2025, while lower interest rates should benefit interest rate-sensitive sectors in Saudi Arabia, the UAE and Qatar. While the regional conflict has had a material negative economic impact on the broader MENA region (particularly Egypt and Lebanon), the GCC is likely to remain relatively insulated from geopolitical risk.

 

Treasury4 launches seamless connectivity for BlackRock Cachematrix

Treasury4 has announced that it now offers seamless connectivity to BlackRock Cachematrix, a dynamic investment trading and reporting system. Through this capability, mutual customers can automate the secure ingress of BlackRock Cachematrix investment holdings and transactions data into Cash4, the cash management, reporting, and forecasting solution from Treasury4 that provides a consolidated view of cash and investments.

BlackRock Cachematrix provides configurable trading and reporting solutions to help clients streamline their daily cash management. Through BlackRock Cachematrix, investors can place purchase and redemption requests for money market fund investments from more than 30 fund providers globally.

“We are pleased to now offer a connectivity interface to Cash4 for BlackRock Cachematrix customers,” said Steve Helmbrecht, President and CEO, Treasury4. “We believe that this important capability will deliver more efficient cash management for our customers by giving them a 360° view of their liquidity, including their investment data from BlackRock Cachematrix.”

 

BofA’s CashPro App to surpass $1 trillion in payment approvals for 2024

By the end of 2024, Bank of America (BofA) corporate clients will have made over $1 trillion in payment approvals on the bank’s CashPro App, the mobile application that companies can use to manage their treasury operations. 

This figure will represent a more than 25% year-over-year increase in payments approved via the app. The bank says this illustrates how its corporate clients are further utilising the technology for its enhanced security and convenience.

CashPro is BofA’s digital banking platform and is accessed by approximately 550,000 users at 40,000 companies worldwide to manage and monitor their payments, deposits, loans, and trade finance transactions. The CashPro App is integral to this platform.

Lauren Hobbs, Cash Management Manager at the energy infrastructure company Sempra, comments: “The CashPro App is great. Whether I’m in between meetings or at my desk, it’s extremely powerful. I can quickly look at account balances and approve high dollar payments with confidence.”

Bank of America clients can initiate corporate payments across any of the four channels of the CashPro platform: online, app, APIs, and Connect (file-based). For added security, these payments may require additional levels of approval prior to being released, and clients can leverage the CashPro App to complete those approvals. Historically, December sees the highest volume and value of payments approved through the app, driven by year-end activity and users travelling during the holiday season.

 

FX traders investing in automation and data in the search for best execution

Investment firms and corporate treasurers participating in the foreign exchange market are actively investing to further automate their trading workflow to improve execution quality and reduce operational risks, a report from Coalition Greenwich has found.

Achieving best execution is a top strategic priority for the buy side. The technologies and tools that help in this quest, including the use of electronic execution venues, transaction cost analysis (TCA) and algorithms, are improving and are now more commonly used. Looking ahead, nearly half the buy-side firms participating in a recent study from Coalition Greenwich identified execution management and analytics as top priorities in technology investment strategies.

“The overarching goal is to optimise FX trading, and investing in automation and new analytical capabilities is critical to achieving that goal,” said Stephen Bruel, Senior Analyst on the Market Structure & Technology team at Coalition Greenwich and author of ‘FX Trading: Strategic Importance of Electronification and Automation’. “Upgrading trading systems such as execution and order management systems, enhancing data acquisition and improving pre-trade analytics all support the broader goal of improving execution quality.”

Automating trade execution is also seen as a key means of reducing risk. However, despite the FX market’s reputation as being one of the world’s most digitised marketplaces, some trades are not conducive to electronic execution. For example, a lack of liquidity and the buy-side’s preference for voice and chat may limit electronic execution when trading certain non-deliverable forwards (NDFs).

“Not all executions can be automated, so the buy side is also looking for improved tools to optimise their execution when manual intervention is required, still hoping to ensure they are receiving competitive executions,” added Bruel.

 

Citi announces strategic Investment in Digital Vega

Citi has announced a strategic investment in Digital Vega, a FX derivative trading solutions provider. Headquartered in the UK, the firm specialises in developing over-the-counter (OTC) FX options trading platforms and workflow automation tools, catering to the growing demand for electronic solutions in the FX options market.

As the FX options market continues to shift from traditional voice-based trading to more modern electronic channels, banks and buy-side firms seek modern and innovative services to automate trading workflows.

The investment was led by Citi’s Markets Strategic Investments arm, which sources and executes venture investments in fintech companies and financial market infrastructures that drive innovation and progress across markets.

“As banks and buy-side firms focus on automating FX options trading workflows, Digital Vega is regularly asked by clients to develop new automated services or build enhancements,” said Mark Suter, Executive Chairman and Co-Founder of Digital Vega. “We are pleased to have attracted this new investment from Citi which provides us with the resources to respond faster to new opportunities and expand our services while continuing to provide high levels of service.”

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