“The treasury community is expecting that technology will take up most of its time and attention within the next five years. Even in 12 months’ time, treasurers expect the time spent on technology will be second only to capital and liquidity management,” according to The Association of Corporate Treasurers’ (ACT) recent Business of Treasury 2024 survey report.

This 11th annual edition of the ACT’s Business of Treasury research included responses from 188 treasurers worldwide. Among the survey respondents, 52% describe themselves as leading the treasury function, 32% occupy other treasury positions, and the rest hold other roles, such as CFO. On average, respondent treasurers have been in their current positions for 5.1 years.

The Business of Treasury 2024 survey delves deeper into specific treasury areas. This edition focuses on key current and future topics such as technology and sustainable finance, as well as areas of concern in times of increasing uncertainty, so that treasurers are better equipped to navigate upcoming challenges. Here are the key findings:

Big shift in favour of technology in the next one to five years

Over the past four years, corporate treasurers have faced myriad challenges – the COVID-19 pandemic and its lingering effects, supply chain disruptions, geopolitical risks, cybersecurity, inflation, interest rate hikes, currency fluctuations, and economic uncertainty.

“In times of crisis and uncertainty, the critical role of treasury in delivering positive business performance is valued even more highly, and we are seeing this in the continued engagement by boards in core treasury areas, and in the view of treasurers as strategic business partners”, stated the ACT’s survey report.

During uncertain times, treasurers have been drawing on their strengths of expertise, calm demeanour, and resilience, as well as centering their attention on treasury operations and controls, together with capital and liquidity management, as per the report.

“More than half of the respondents said they spent most of their time on one or other of these areas (see figure below).”

 Source: ACT survey, Business of Treasury 2024 report

Corporate finance and risk management were the next significant time consumers for treasurers, while the focus on business strategy has been increasing in recent years, with 6% of treasurers indicating it now occupies the majority of their time, the report further added.

The ACT survey goes on to elaborate that for the immediate future or short-term (the next 12 months), treasurers will remain concentrated on capital and liquidity management. Nevertheless, the report suggests that treasures foresee a shift in priorities “five years out.” At that point, treasurers are likely to dedicate significantly more time to technological advancements (see figure below).

 Source: ACT survey, Business of Treasury 2024 report

As goes the next 12 months, the ACT report highlights that “nearly seven out of 10 (69%) expect to be spending more time on technological advances, followed by change management (48%), business strategy (47%) and risk management (46%). Interestingly, although a significant number (43%) expect to spend more time on environmental, social and governance (ESG) issues, this is noticeably down from the 65% in 2022 (see figure below).”

Source: ACT survey, Business of Treasury 2024 report

This is in spite the expanding interest in sustainability issues, where several financing and funding options revolve around ESG metrics, the ACT report explains.

Nonetheless, given the swift pace of technological change, the respondents in the ACT survey, believe that technology will likely dominate their time and attention over the coming five years.

The increased adoption of emerging technologies like artificial intelligence (AI) and machine learning (ML) will help drive the automation of treasury operations to increase operational efficiency and productivity, and achieve business growth. However, with the growing threat of cyberattacks and fraud, along with the evolving nature of technological advances, treasurers anticipate facing additional challenges in areas like risk management, automation, and treasury operation controls.

This possibly explains the range of technology areas that the surveyed treasurers are planning to invest in. This includes cybersecurity, automation, working from home, treasury management systems, AI and generative AI.

Treasurers from large companies to spend more time on technology in the future

Interestingly, there seems to be a noticeable difference in attitude between small and large organizations regarding the time they expect to allocate to technology in the future.

Based on the ACT report, “Nearly two in five treasurers from companies with turnovers of £10bn or more expect to be spending the majority of their time on technology in 12 months’ time. This figure is significantly lower among treasurers from smaller companies, where only a quarter (24%) anticipate spending more time on technology in the future.”

Anecdotally, the reports mentions that this could be attributed to the availability (or lack) of budget or funds necessary for technological implementation.

The survey report notes that treasurers will ultimately be tasked with recognising the opportunities and challenges that arise from technological advancements. They will need to have a thorough understanding of their strategies, the organization’s broader business strategy, and how technology can serve as an enabler to fulfil the objectives laid out in the strategy.

Conclusion

With ongoing global economic uncertainty and heightened geopolitical risks, corporate treasuries are likely to hasten their digital transformation by leveraging emerging technologies to improve cash flow visibility and enhance liquidity forecasting, thereby boosting efficiency, mitigating risks, and strengthening cybersecurity.

The path towards the digital transformation of corporate treasuries will require technology to play a dominant role in treasury operations and controls, treasurers to stay attuned to advances in treasury technology, and the prioritisation of further training and development, not just in business skills, but in technical skills as well.

More importantly, for this transformation to be successful, corporate treasurers and their teams must dedicate considerably more of their time and attention to technology in the coming years, especially given what technology is capable of achieving.