“Treasurers perform a challenging role. They ensure the company has adequate liquidity, minimize financial risks, and contain net financing costs so they do not materially impact cash flow. They have the vital mission of supporting the CFO in capital strategy. And they must do this in all financial conditions”, moted Shahmir Khaliq, Global Head of Services at Citi, in Citi’s latest corporate treasury focused Global Perspectives & Solutions (Citi GPS) report, Treasury 2030: Modernize or Risk Irrelevance.

This may explain why, increasingly, treasurers are focusing on the future, asking questions such as, What will the treasury landscape look like? How should we prepare to adapt? This report, developed by Citi's Services Client Advisory Group in collaboration with Zanders, addresses these questions and outlines what treasury might look like by 2030.

Citi anticipates that by 2030, treasury will evolve to exhibit four distinct characteristics. Achieving this will require organizations and their treasuries to adopt innovative thinking “To map out what each company should do and how to get there,” as per the Citi GPS report. The transformation involves not only technology and infrastructure but also significant organizational and cultural shifts. Here are the four traits that will define treasury leadership in the future:

Serving as the centre of excellence to govern all financial transactions

Managing financial risks, cash, and funding remains a core focus for most treasuries. As treasury is responsible for cash, it serves as the organization’s cash manager and steward of its most liquid assets (e.g., cash). Thus, treasury operates downstream to ensure adequate liquidity and mitigate financial exposures, such as foreign exchange (FX) and interest rate risks.

The Citi GPS report highlights the evolving role of treasury in driving strategic value for organizations. According to the report, “While the management of risk, cash, and funding remain table stakes, treasury needs to be equipped to proactively contribute to the success of the business. We believe this calls for any transaction with financial impact or implication to be governed by treasury. This would include the strategy for commercial payments and receipts, including those related to e-commerce and digital payment channels. It requires partnering with the business to ensure leadership understands and appreciates the cash and capital implications of decisions.”

In this regard, the report suggests that treasury should be closely integrated with commercial functions across the order-to-cash (O2C) and procure-to-pay (P2P) cycles, while also overseeing all external financial counterparties, including payment service providers. This integration helps facilitate smooth transaction delivery for the business and extends treasury’s influence over a wider counterparty risk framework.

Treasurers transitioning from Risk and Liquidity Managers to Chief Returns and Risk Officers

The Citi report emphasises that treasury brings together a unique blend of expertise covering financial risk management, liquidity management, capital and returns implications, and scenario thinking. Consequently, treasurers need to be brought into strategic decisions early on to help the CEO and CFO deliver promised shareholder returns.

The Citi report further elaborates that “The objective is to bring together a firm-wide deep understanding of core business risks (Paid to Take), financial risks (Paid to Manage), and operational risks (Paid to Mitigate). Treasury should be at the center of cross-functional alignment in the corporate planning process, bringing to the table its unique end-to-end understanding of risk, returns and cost of capital. Horizontal collaboration between treasury, FP&A, and business development will ensure that top line growth, returns, and risks are all considered.”

As treasurers transition into their expanded role, they should be at the heart of decision-making processes, offering critical insights into the trade-offs between risk and returns. This strategic involvement ensures that treasury’s expertise directly impacts key decisions, driving improved financial performance while aligning with the company’s risk appetite.

Embracing a 24/7, real-time mindset

Cash movement and management today are fraught with inefficiencies that treasurers are well aware of, some of which are inherent in the payments and banking sectors, points out the Citi GPS report. However, changes are underway to address them. Despite this, there are unacknowledged opportunity costs and risks associated with the batch-driven, information-delayed workflows in treasuries, leaving little room for the flexibility and agility that companies need in fast-paced environments.

This is precisely why the report states that “Treasuries in the future will need a real-time mindset to always get the most from corporate cash. Companies, irrespective of business model, will need to move towards real-time treasury that accelerates the velocity of cash.”

To achieve this “Always on, 24/7,” real-time mindset, the Citi report recommends “A fundamental re-engineering of treasury processes and how treasuries consume and harness data.”

Real-time treasury will result in substantially improved efficiency, driving major changes in how corporations handle cash. Companies that adopt real-time treasury early will secure a competitive edge. The advent of real-time treasury could mark the end of value-dating and the beginning of value-timing.

Employing AI as the core of a new treasury operating system to enable automation

Increasing the velocity of cash will require the automation of routine and repetitive tasks through process-oriented systems, the Citi report advocates. Considered a value-added business partner, treasury’s ability to provide meaningful insights and support business strategy hinges on freeing up capacity for critical thinking and analysis—an area where artificial intelligence (AI) will play a pivotal role.

Across industries, AI and machine learning (ML) are effectively automating repetitive processes, minimising errors, boosting productivity and efficiency, and empowering analytics to enable smarter decision-making.

Going forward, the Citi GPS report reckons that “AI should be at the core of a new treasury operating system that powers automation, efficiency, accuracy, and data-supported insights.” However, it also advises caution, noting that treasury’s critical role demands human intervention to manage, monitor, and intervene when AI operates beyond predefined boundaries or parameters “Deemed suitable for machine-based decisions.”

Citi’s research indicates that treasury departments often lack adequate funding for technology and resources. Yet, groundbreaking technologies like AI and digital assets are emerging, offering the potential to transform treasury processes. To capitalise on these developments, “Treasurers need to plan beyond incremental improvement and adopt novel ways of thinking to drive proactive strategies”, the Citi report proposes.

The report also uncovered that corporate treasury cannot attain its full potential in isolation. As a function, it is dependent on a wide range of stakeholders and counterparties, both internal and external. To catalyse the profound changes necessary for real-time treasury, corporate treasurers must actively engage in broader collaboration and partnerships with treasury technology providers, banks, and fintechs.

“The payoff is treasury with an expanded remit equipping businesses to make better decisions to deliver growth and returns”, the Citi report explains.

In addition to fostering broader partnerships, securing and nurturing the necessary talent will be vital for shaping the future treasury function.

Confirming this, the Citi report observes, “Chief amongst the areas of concentration for leading treasurers will be the need to ensure they have the right people and talent mix at all levels and across all functions. For many, this will necessitate shifting from the role of being an executer to one of influencer.”

For the corporate treasury ecosystem, a lot will change in the years leading to 2030. The real prize for treasury lies in stepping into an expanded role within the organization, driving impactful results that enable businesses to meet the goals and expectations of the CEO and stakeholders. For those corporate treasurers who are bold enough to take on this challenge, “The road to 2030 is filled with opportunity”, the Citi GPS report concludes.