Cash & Liquidity Management

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Treasury in Transformation Extracts of Treasury Strategies' 2008 Global Corporate Treasury Research Programme The goal of the Corporate Treasury and Liquidity Research Programme is to help corporate treasurers and financial services providers better understand the market and provide a benchmark of current treasury practices and issues. The research programme explores the corporate treasury function broadly, encompassing treasury key issues and initiatives, organisation and staffing, liquidity management practices, treasury technology and financial services providers. This article provides extended extracts of the results of this programme. Further detail can be obtained from Treasury Strategies at www.treasurystrategies.com.

Treasury in Transformation

Extracts of Treasury Strategies’ 2008
Global Corporate Treasury Research Programme
by Helen Sanders, Editor

Insights from North America, Europe and Asia Pacific across

Research Objectives

The goal of the Corporate Treasury and Liquidity Research Programme is to help corporate treasurers and financial services providers better understand the market and provide a benchmark of current treasury practices and issues. The research programme explores the corporate treasury function broadly, encompassing treasury key issues and initiatives, organisation and staffing, liquidity management practices, treasury technology and financial services providers. This article provides extended extracts of the results of this programme. Further detail can be obtained from Treasury Strategies at www.treasurystrategies.com.

Summary of Findings

Treasury is undergoing a profound transformation across the globe. In response to market turmoil, globalisation, banking consolidation and the increasingly strategic nature of payments, treasury is expanding its scope of activities and becoming a change agent.

  • Treasury is becoming a strategic business partner, developing cross-functional relationships to help business units globalise as well as execute and accept new payment media. In some cases, treasury is helping to integrate the physical and financial supply chains to accelerate the speed of business. As part of this effort, treasury is examining counterparty relationships with financial institutions and trading partners for their ability to support this integration and drive efficiencies. More aggressive firms are adopting innovative new solutions that deliver buyer financing, simplify and automate the exchange of payment documents, improve workflow around working capital and deliver enhanced information throughout the lifecycle of a transaction.
  • Treasury is managing a broader set of risks, expanding beyond foreign exchange (FX) and interest rate risk, to assume responsibility for commodity risk and, in some cases, non-financial risks such as non-insurable business risk as part of a comprehensive enterprise risk management responsibility.
  • Treasury is deploying technology and centralising activities to strengthen controls and risk management, maximise efficiency and improve access to liquidity – a critical objective in today’s tight credit markets. While many firms are implementing or considering Treasury Management Systems (TMS), treasurers are evaluating a broader array of technology including multi-provider execution platforms, digital dashboards, bank relationship management software, online investment portals, payment factories and corporate access to SWIFTNet. Technology solutions are helping companies centralise key activities such as FX and investments. Through technology and more tightly integrated global banking solutions, treasury is improving efficiency – not to reduce staff, but to free up resources to take on expanded strategic activities. Across all regions, at least 10% of respondents noted that they increased treasury staff in 2008, underscoring the strategic importance of treasury.
  • In response to market turmoil, treasury is rebalancing its cash portfolios and restructuring its banking relationships. Market turmoil has led treasurers to reduce portfolio risk, often by moving money out of active investments and into lower risk, passive investments such as money market funds (MMFs). In most regions, treasury is planning to rely more heavily on banking providers, expanding service usage with a core group of strategic partners. In recent years, we have observed the increasing maturity of treasury management encompassing deeper working capital and liquidity solutions. 

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