Over the next three years, 68% of treasury professionals believe their role will become increasingly important to their businesses. Advances in technology are allowing corporate treasuries to become a stronger strategic partner to the rest of the company, according to a recent survey of treasury professionals.
The second annual “Global Treasury Benchmarking Survey”, compiles data from nearly 1,000 financial professionals. It is published by Reval, in association with Treasury Strategies, Standard Chartered, and Zanders. It found that by automating some traditional treasury functions, treasury employees have more time to focus on strategic activities, such as a cash forecasting and risk management.
Not only are treasuries becoming more important but their roles are expanding according to 68% of respondents. However, while treasuries’ importance and scope are increasing, 73% said they expect to have the same or less staff.
Rise of the machines
Limited staff fuels technology adoption and digitalisation so that they can do more with less. 65% percent of treasury professionals say that they are using technology to help their teams master treasury and risk management challenges and modernise their roles with a business.
Unsurprisingly, 35% of treasury professionals said they are reviewing their existing technology and 30% are implementing new treasury technology. Despite this, 30% of treasuries are using spreadsheets as their main technology.
This varies geographically, with treasuries in Canada (59%) and New Zealand (47%) relying heavily on Excel. Treasuries in Germany (21%) and the Benelux region (18%) rarely use it. In companies with revenues below US$500m, half of treasury practitioners say that they are working mostly with Excel.
The main challenges remain
In this year’s survey, the top challenges to treasuries are the same as the previous year: cash forecasting (75%), cash visibility (65%), and FX risk (53%).
“Underlying the recurrence of these statistics is the constant change of a dynamic business environment. Growing organisations introduce complexity into existing treasury processes and technology infrastructures. And when a company grows through M&A, that complexity is compounded,” said the survey report.
In fact, 58% of those in companies with revenues over US$20bn say that their companies will become more international. Treasury teams are also becoming more centralised, with 94% of respondent reporting that they are organising their treasuries using a centralised operating model.
The number of respondents who listed European Market Infrastructure Regulation (EMIR) and Dodd-Frank as their top regulatory challenges fell from 74% at the end of 2015 to 34% at the end of 2016, as the industry starts to develop best practice standards.
In fact, treasuries reported best practices being established for International Financial Reporting Standards 13 (IFRS 13), Accounting Standards Codification (ASC 820), single euro payments area (SEPA), Dodd-Frank, and EMIR. However, 40% of those surveyed said IFRS 9 was a top regulatory challenge.
