Cash & Liquidity ManagementInvestment & FundingShort-term investment processes proving a headache for treasurers

Short-term investment processes proving a headache for treasurers

Treasurers are desperate for more efficient and robust short-term investment operations, and yearn for real-time information on their investments

Corporate treasurers are “crying out for help” in the short-term investment space, according to a survey by global funds network Calastone.

Results from the Global Liquidity Barometer 2022 survey noted many need help from their fund providers to make the trading process more robust and better integrated with their treasury management systems (TMSs).

According to the survey results,  77% of CFOs and treasurers would like to access and manage their money market funds (MMFs) and other short-term investments via their TMS, while only 13% want to use a portal.

Nevertheless, the findings show 53% are currently using a portal, for want of better technology. Almost half (47%) of survey respondents say they have no investment portal whatsoever.

“This all points to a lack of budget for such resources, as well as outdated workflows not being brought in line with digital developments,” the study says. “Investing is often the last area to benefit from treasury transformation, and these results reflect this reality.”

Ed Lopez, chief revenue officer at Calastone, adds that the report shows that systems integration is becoming “more critical than ever” for CFOs and treasurers in the short-term investment space.

“These clear gaps between short-term investment desires and reality demonstrate a need for treasurers to look beyond their traditional investment partners and technologies towards solutions that help them make smoother and smarter investments, from their system of choice,” Lopez says.

More generally, Calastone found a lack of automation is evident across the lifecycle of an investment trade, leading to significant process inefficiencies and creating unnecessary room for error. The area with least automation (33% of respondents) is trade confirmation.

Nearly half of those surveyed pointed to the lack of real-time information in areas such as fund performance, composition, and yield as their biggest challenge.

“Technologies such as blockchain, APIs, RPA, AI and machine learning should assist in overcoming many of these technology issues – but treasurers must work with vendors and investment providers to voice their frustrations and push for greater innovation,” the report says.

MMF regulation concerns

Another major concern for treasurers uncovered by the study is the impact of ongoing reform of money market fund (MMF) regulation in the US and Europe.

“While the intention of these reforms is to make funds more secure for investors, their unintended consequences are a significant concern and may see treasurers no longer choosing to invest in MMFs, or at least certain types of funds,” the report says.

Potential US regulatory changes to prime MMFs mean 70% of survey respondents are questioning their use of this instrument. Proposals under consideration by the Securities and Exchange Commission (SEC) include replacing liquidity fees and redemption gates with swing pricing and increasing the minimum liquidity requirements of funds.

In Europe, meanwhile, the proposal to remove stable NAV for LVNAV MMFs is “extremely concerning or very concerning” for almost one-third of survey respondents.

Calastone’s Global Liquidity Barometer 2022 survey is based on responses from CFOs and treasurers across 90 corporates, mainly in Europe and US.

In light of its findings, Calastone recommends vital steps treasurers can take to gain much greater control over the company’s invested cash and ensuring appropriate levels of liquidity in their portfolio to access it on demand.

These include applying automation to improve operational efficiency; increasing transparency through real-time information; and establishing real-time connectivity across systems through seamless integration.

“This level of digital innovation is available in the treasury technology market today. It can be readily deployed by treasurers to revolutionise short-term investing and optimise cash and liquidity management, ultimately enabling treasurers to better support their organisation,” the report says.


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