Corporate treasury teams in 2024 found greater stability in their banking relationships, yet diversification remains a priority for many, according to the Tietoevry Banking and The Global Treasurer’s 2024 Corporate Treasury Survey. 

The research found that 55.4% of respondents maintained their existing banking relationships last year, up from 44.8% in 2022. However, nearly a third (31.3%) increased their number of banking partners, signalling a continued effort to spread risk and enhance flexibility.

The multi-bank approach has become the norm, with 90% of treasury teams now managing multiple banking partners, an increase from 84% in 2022. Foreign exchange (FX) management was the leading driver of this strategy, cited by 48.1% of respondents (up from 40.2% in 2022), followed by credit limit availability, which grew to 45.4% from 34.3%.

This growing emphasis on diversified banking relationships aligns with broader economic uncertainties. Persistent inflation, shifting central bank policies, and geopolitical tensions - such as ongoing conflicts and trade disputes - have made access to liquidity and credit lines increasingly critical. Treasury teams are responding by maintaining flexible, multi-partner strategies to mitigate risks associated with financial market volatility.

KYC frictions persist

Despite efforts to streamline banking processes, Know Your Customer (KYC) requirements remain a significant obstacle for treasury teams. Lengthy compliance checks continue to hinder operational efficiency, and the slow account opening process has moved up in priority since the last survey, reflecting the need for faster banking integration amid evolving market conditions. This issue is particularly pressing as companies increasingly diversify their banking relationships yet face delays in onboarding new partners due to compliance bottlenecks.

Fragmented account management remains a pressing issue, mainly as firms maintain relationships with multiple banks across various jurisdictions. A lack of real-time visibility into cash positions is also a growing concern, with treasury teams struggling to consolidate financial data. 37.8% of respondents rely on their banks for real-time cash visibility, making KYC-related delays even more problematic, as they can slow down access to critical banking services and further complicate liquidity management.

The rise of reconciliation issues - from the tenth most significant challenge in 2022 to the fifth in 2024 - coincides with increased transaction volumes, growing complexity in cross-border payments, and the expanding use of digital payment channels. The pressure to reconcile high volumes of transactions in real-time is mounting, especially as regulatory bodies tighten financial reporting requirements.

Cash visibility and liquidity management: a work in progress

Real-time cash visibility has seen considerable improvement. In 2024, 63% of respondents reported having real-time access to cash position data, up from just 43.1% in 2022. However, larger firms remain at a disadvantage. Survey analysis shows a strong correlation (0.97) between company size and a lack of real-time visibility, reflecting the operational complexity of multi-entity, cross-border treasury functions.

The mechanisms for managing liquidity have also shifted. Zero/target balancing saw a slight uptick, with adoption rising to 46.8% in 2024 from 44.8% in 2022. Conversely, notional pooling declined from 34.5% to 30.6%, potentially due to regulatory challenges. Meanwhile, the proportion of organisations not using any pooling mechanisms grew from 26.7% to 30.6%, suggesting that some treasury teams are seeking alternative liquidity management solutions or facing implementation barriers.

This shift comes at a time when global interest rates remain elevated. The cost of holding idle cash has increased, making optimised liquidity structures more valuable than ever. Additionally, evolving regulations in key financial hubs including Basel III banking reforms and EU liquidity reporting requirements are influencing how companies structure their cash management strategies.

As IHBs decline, VAM ramps up

The use of in-house banking (IHB) structures has dropped significantly. In 2024, 71.2% of respondents reported not having an IHB, compared with 57% in 2022. This decline may indicate a shift towards decentralised treasury models or greater reliance on bank-provided solutions. While IHBs offer control and efficiency, they require substantial resources to maintain, which may be influencing their waning adoption.

With an increasing emphasis on automation, many firms are choosing cloud-based treasury management solutions over traditional IHB structures. As technology providers enhance real-time capabilities, some companies are opting for outsourced solutions rather than bearing the cost and complexity of IHB frameworks.

Treasury teams are, however, turning to technology to address visibility and efficiency gaps. Virtual account management (VAM) adoption has increased, with 15% of respondents now using bank-provided VAM services, up from 11.2% in 2022. However, interest in exploring VAM has declined, with 25.2% of firms currently assessing its potential, compared with 37.1% in 2022.

For those leveraging VAM, the primary use cases include reducing the number of physical bank accounts (43.8%), payments-on-behalf-of (32.9%), receivables-on-behalf-of (24.7%), and automated reconciliation (31.5%). These solutions are enabling treasury teams to streamline processes and improve oversight of cash flows.

Adoption trends suggest that while innovative cash management tools are gaining traction, treasury teams remain cautious about implementation. Regulatory considerations, integration complexities, and internal resource constraints all play a role in determining the pace of adoption.

The road ahead

As treasury functions evolve, teams are being pushed to enhance risk management and liquidity strategies while addressing persistent banking inefficiencies. The increased adoption of real-time cash visibility tools, multi-bank approaches, and virtual account solutions signals a broader industry shift towards automation and strategic flexibility. However, challenges in reconciliation, KYC compliance, and liquidity structuring remain, making treasury management an increasingly complex balancing act in 2024.

Looking ahead, economic volatility, regulatory pressures, and technological advancements will continue to shape corporate treasury functions. The ability to integrate real-time data, navigate regulatory complexities, and leverage digital tools will be key differentiators for treasury teams seeking to optimise cash management and financial stability.