The pandemic has put a spotlight on treasury managers and leaders, pushing liquidity, cash management, risk management and cash forecasting higher up as a priority for many corporations. This shift has elevated the role and profile of treasurers.

As the role of the treasurer continues to evolve, it beckons the question – what key competencies or characteristics do tomorrow’s treasury leaders need to develop and demonstrate to transform complex business challenges into competitive advantage?

Corporate treasury leaders are pivotal to business survival and prosperity and would do well to think beyond the immediate. No two treasurers will possess the exact same skill set, but nevertheless, we have put together the five essential traits that will define the successful treasury leader of the future.

Act as a business partner

In the book The Strategic Treasurer, author and experienced treasury consultant Craig Jeffery opined, “A partner is someone who is sought out by others in the organization, who pursues ways he can provide insight and bring his unique abilities to help others in the organization in reaching common goals. Treasurers with a vision of adding great value to their organization will make plans and take specific steps to become and be recognized as a strategic business partner. A strategic business partner will be vital to an organization’s health and mission.”

To act as a strategic partner, treasurers should gain knowledge of all aspects of a company’s business. Additionally, they ought to understand the business goals, the key drivers, the company’s appetite for risk, and figure out ways they can help across the business front, not just on the capital side.

In essence, it means going beyond the foundational activities of a treasury department. This could be offering advice, assisting in decision-making, showing intentionality in how you connect with other areas and providing mature perspectives to make the organization’s future look better. “To be a strategic treasurer requires that the role have the word partner embedded in it. Otherwise, people may have the title, but they will be merely operational treasurers,” observed Jeffery in his book.

Treasurers take a risk-oriented view and are heavily focused on the future. So a far-sighted treasurer should bring intellectual curiosity and analytical rigor to the table that will allow them to identify and mitigate risks in a way that protects the organization.

Treasury executives who act as engaged, ethical and trustworthy business partners will have greater longevity in an organization than those who perform as disconnected parties.

Hone functional expertise

As treasurers are being asked to play a more strategic role in companies, they must continue to hone their strategic acumen, professional qualifications, international business, finance and treasury skills to propel their careers and further their company’s fortunes.

The smartest treasury professionals will have a penchant for continual learning and flexibility to adapt to the business’s current and futuristic needs. So, a deep knowledge of their roles coupled with the ability to address emerging issues and solve problems will be more important than ever.

Rising protectionism and volatility in the global financial, currency and commodity markets has created new challenges for corporate treasurers. A thorough understanding of geopolitical issues and how these could affect liquidity, supply chain financing, foreign exchange rates and currency hedging positioning is imperative for high-performing treasury leaders of tomorrow. 

Effective communication and relationship management

Adept communication and relationship management will be the core leadership qualities that treasury leaders of today and the future will have to embody.

With treasurers now playing a much greater role as a strategic thinker and advisor, they are expected to connect and engage with a wider variety of people, both within and external to their organization. This has brought treasurers to the fore and will require them to communicate effectively and build and strengthen corporate relationships.

To become effective communicators, treasurers must be active listeners, take input on the communications side, and continue to ask questions so that they understand deeply what is going on in the business areas and what colleagues are trying to accomplish. They should talk only when they can add significant value, ensuring that their responses are nuanced or calibrated properly and address everyone’s concerns.

Savvy communicators are able to communicate relatively complex issues in simple language blended with good data storytelling skills, and treasurers who can do so will be in demand.

A treasurer’s focus must pivot between internal and external relationship management. Building rapport and strong relationships, including the dexterity to work with people at all levels and from different fields, will make a treasurer a sought-after professional. This will enhance their ability to collaborate and influence others in the organization.  

Craig Jeffery writes in his book, The Strategic Treasurer, “It is the treasurer’s responsibility to ensure that good and appropriate relationships are maintained in a deliberate and thoughtful manner with other organizations, departments, or units within the firm. It is important that this business-to-business relationship be deeper than a one-to-one interpersonal relationship, and both sides must be able to relate to each other in a manner that outlasts any one person.”

Technology-first mindset

Technology is a key tool in all areas of finance – treasury is no exception. Technology has allowed treasurers to focus on more value-added processes and maximize business insights.

Corporate treasury leaders will have to transition from being tech-savvy to tech-first in their mindset and approach. This will mean staying cognizant of the latest technology trends and harnessing the opportunities that new technologies provide in a strategic way.

Mere awareness or surface level understanding of technology will not be adequate for treasury professionals of tomorrow. Treasurers shouldn’t try and compete for the top spot without a certain level of proficiency in technology and a track record of using it. They have to understand what it is, what matters and how they will help drive it.

Technology has brought changes in the treasury function, but this is just the beginning. We are now on the cusp of colossal technological innovations - robotic process automation (RPA), artificial intelligence (AI), machine learning (ML), application programming interface (API), blockchain and other breakthrough technologies that will have a big impact on the treasury function and its future.

Automation, big data, analytics and digitalization are vital components for streamlining treasury departments, achieving operational and liquidity effectiveness, and making informed decisions.

Treasury professionals with a strategic and futuristic technology lens will understand the possibilities and implications of technology on the organization as a whole, including problem-solving across the company, rather than using technology to solve a single company problem.

The next generation of treasury leaders will pull together the best of emerging technologies to make treasury a strategic competence center because every crucial aspect of treasury will be managed through technology.

Risk management and fraud prevention focused

Risk management is at the heart of most treasury functions.

Treasury leaders need to know where the key risks are, develop the ability to prudently assess these risks, measure and monitor them, and then mitigate the risks.

Understanding of risk in all of its forms will be one of the most important skills for treasurers to have. From counterparty to foreign exchange risks, geopolitical uncertainty to interest rate risk management, the treasury leader of tomorrow must be on top of the critical threats that can afflict a corporation’s bottom line and brand.

Tomorrow’s treasurers are advised to recognize constantly and actively emerging and amplifying risk exposures across operational and financial areas of the business to make more prudent investment decisions. A vigilant treasury must also have excellent controls and policies in place that will help in alleviating risks, particularly if the future of work might be remote or hybrid.

Treasury is the steward of the organization’s financial assets and can be thought of as the superintendent of security. Treasury professionals must stay focused on security and fraud prevention. The risk that corporations will fall victim to fraud is considerable and growing.

As fraudsters adopt increasingly sophisticated techniques, it is imperative for treasurers to understand different types of fraud – continuing and emerging – and to proactively detect, prevent and control fraud to safeguard their companies.

“Fraud and losses require the effective use of an internal control framework with particular attention to the design of a firm’s banking system, monitoring and visibility, assessing the internal and external situations. To accomplish this requires intellectual curiosity that manifests itself in purposeful communication. For the treasurer, the downside of not being alert and thoughtful is all too frequently terminal. A treasury equivalent of the undo button does not exist,” warns the book, The Strategic Treasurer.

As treasury executives jostle with the effects of the pandemic – supply chain disruptions, rising inflation, economic uncertainty, geopolitical developments and regulatory changes – and also prepare for a life beyond the pandemic, they will have to juggle increased expectations to do more with less.

Treasury leaders of tomorrow will have to invest in people and team development, succession planning, processes and technology, and empowering staff to deliver strategic support to the business. They will also have to embody a range of skills not previously associated with the function. Treasury professionals who do so will thrive in the future.