How the ‘Year of Elections’ Reshaped Treasury Priorities
As elections reshaped the global economy in 2024, corporate treasurers are finding themselves having to navigate shifting trade policies, currency volatility, regulatory changes, and technological disruption. Agility, resilience, and strategic foresight will be the key to success in 2025 and beyond.
Dubbed “the biggest election year in human history,”[1] 2024 saw around half of the world’s population exercising their democratic right to vote. The resulting political upheaval has left treasurers steering a course across an uncertain economic landscape. Poll results have redefined vital concerns including trade relationships, monetary policies, and risk exposures.
Perhaps the most impactful result globally is Donald Trump’s re-election in the US, which has sent fresh tremors through the international trade sector. His administration’s renewed focus on tariffs is set to reshape supply chains.
Nigel Owen, Head of Corporate Origination, TreasurySpring, notes: “We now know that Trump is going to be far less net-zero targeted, pulling the US out of the various accords … tariffs seem to be his blunt instrument to try to get what he wants.”
Meanwhile, in India, the ruling Bharatiya Janata Party (BJP) secured a third-term victory, with the support of the National Democratic Alliance. This has ensured a continuity of pro-business policies.
Devesh Makhijani, Senior Associate Vice-President, Darashaw, reflects: “Corporates that stay agile, leverage policy incentives, and expand their global reach will define the next chapter of this growth story.” India’s emphasis on infrastructure expansion, tax efficiency, and foreign direct investment (FDI) has positioned the country as an increasingly attractive market for corporates.
In the UK, the Labour government’s ascent spurred an initial market rally, pushing the FTSE 100 up 5% since July 2024. However, bond markets tell a more complicated story.
Owen explains: “If we look at gilt yields, when the government came to power, we were at around 4.2% for the two-year gilt at the time. There was then a rate cut very shortly afterwards at the August Monetary Policy Committee meeting, the two-year yield went down to about 3.5%. However, we’ve then seen it climb back up to around 4.6%, and now we’re back at 4.25%.”
The divergence between rate cuts and rising yields underscores fiscal concerns facing the UK economy.
BOX 1: UK focus: Labour’s Economic Strategy and Corporate Response
Since coming to power, the Labour government has emphasised economic growth through infrastructure and regulatory reforms. For example, the Oxford-Cambridge Growth Corridor project[2] aims to establish a tech and innovation hub. Yet concerns remain over its scale and impact. “The 4,500 homes proposed are a very small fraction of what would be required,” observes Nigel Owen, Head of Corporate Origination, TreasurySpring.
Labour’s budget has drawn mixed reactions from businesses. Higher employment costs have prompted some firms to reassess hiring plans, while others have opted for workforce reductions. “A prudent treasurer or CFO has to consider that as a risk going forward, that there may be more of a tax take coming down the line,” Owen cautions.
Corporate credit markets remain stable for now, with tight spreads signalling investor confidence in business fundamentals. However, an overreliance on government-driven investment could test market resilience in the long term.
Risks and strategies for trade policy in flux
For corporate treasurers, the shifting trade landscape triggered by election results in 2024 present an immediate challenge. For example, US tariff proposals could trigger retaliatory actions from the EU and China, impacting pricing strategies and supply chain costs.
Sophie Marnhier-Foy, Vice President and Head of Client Solutions Strategy, Nasdaq, underlines the need for treasurers to be agile: “Tariffs represent another one of those unexpected events for which firms have to be prepared. It’s vital for corporate treasurers to start scenario planning and thinking through potential impacts to their businesses.”
Hedging against such trade volatility requires corporates to closely monitor FX risks and ensure a diversification of supplier networks. Treasury teams should consider agile risk management strategies, including pre-emptive scenario modelling to cushion the impact of potential tariff disruptions.
Elias Apel, CEO, Lucanet, highlights the importance of this preparation. “If a corporate has a heavy exposure to the US market, the treasury and finance teams need to simulate how the company’s top and bottom lines will evolve depending on tariffs. A 10% tariff can have a massive impact, especially in industries with thin margins.”
India, for one, stands to gain from these disruptions. American firms seeking cost-effective alternatives are increasingly looking to India, particularly in sectors such as electronics, textiles, and pharmaceuticals, as supply chain resilience rises in importance.
Makhijani advises: “Robust logistics, diversified sourcing, and enhanced inventory management will be critical to mitigating disruptions and capitalising on emerging trade shifts.”
India’s geopolitical positioning adds to its appeal. Maintaining balanced ties with the US and Russia, the country has attracted investment without overexposing itself to trade disputes. As tariffs reshape global trade, companies looking to enter or expand in India should align with policy incentives that promote industrial expansion and digital innovation.
Above all, treasury teams must prepare for continued tariff uncertainty, particularly as the US administration explores further import restrictions from China, Mexico, and the EU. The possibility of retaliatory measures to US tariffs adds another layer of risk.
Thomas Gavaghan, Vice President, Global Presales, Kyriba, highlights the urgency of proactive treasury planning: “Amid the current tariff turmoil, treasurers must act decisively to ensure they understand the short-term and prolonged impact to their organisations from global trade uncertainties. Businesses are also anticipating how tariffs affect consumers, which in turn impacts inflation, supply chain dynamics, and market demand.”
The treasury playbook for 2025 and beyond
Treasurers are increasingly expected to take a strategic, commercial approach that aligns with broader business objectives. Leveraging data-driven insights can enable treasurers to take proactive decision and offer stronger support to today’s CFO.
Apel observes: “We’ve seen a major shift in the role of the CFO, not only relatively recently, but also over the past decades. CFOs need to become more commercial in their mindset, not just focusing on transactions but understanding the business at a deeper level.”
Managing liquidity and interest rate exposure In volatile times, treasurers should reassess their liquidity strategies. In the UK, gilt yields remain elevated despite central bank rate cuts, reflecting ongoing concerns about government borrowing. Elsewhere, US policy shifts could further impact dollar liquidity. With some initial tariffs implemented and then postponed, uncertainty has been created in investors’ minds.
Owen highlights: “There will always be a heightened base level now, as everyone tries to understand which uncertainty is coming next. Everybody’s appetite for risk reduces a little, and everybody’s base level of uncertainty increases a similar amount.”
Diversified cash management strategies can help ensure a balance between short-term liquidity needs and long-term investment returns. A greater emphasis placed on dynamic cash forecasting, leveraging real-time data to anticipate funding needs, can help strengthen liquidity management in a heightened risk environment.
FX and trade risk mitigation Currency fluctuations pose a significant challenge, with divergent central bank monetary policies and trade disruptions impacting FX markets. The potential depreciation of currencies such as the Mexican peso and Canadian dollar against the US dollar could erode earnings for companies with significant cross-border exposure, for example.
Gavaghan warns that treasurers should seek real-time insight into FX risk. “FX volatility will continue to pose problems for treasurers who have not fully quantified the impact of currency movements on their balance sheets, income statements, and cash flows. It is essential that they can utilise on-demand data and analytics to answer key financial questions in real-time.”
A focus on hedging strategies and dynamic forecasting tools can help treasurers measure how even minor fluctuations in exchange rates can impact earnings, cash flow stability, and capital allocation decisions.
Marnhier-Foy stresses the role that scenario modelling can play across multiple dimensions. “Managing treasury isn’t just managing cash and payments,” she points out. “Short-term, medium-term and long-term outlooks should be considered, with treasurers running scenarios across various dimensions, including changes to the geopolitical environment, the economy, and interest rates.”
Strengthening SCF and working capital efficiency Today’s economic environment is also causing some working capital headaches for corporates. But by maintaining strong supplier relationships, extending payment terms strategically, and managing receivables more effectively, treasurers can create additional liquidity buffers to withstand such volatility.
Gavaghan underscores the importance of working capital as a risk mitigation tool. “Proactively managing working capital is critical to counteracting the adverse effects of tariffs and economic volatility. By strategically managing assets and liabilities, treasurers and financial leaders can optimise cash flow decisions, including collaborating with suppliers and funding partners to manage payment and receivable terms.”
Companies should consider expanding SCF programmes to provide flexibility to suppliers while maintaining cash flow discipline. Dynamic discounting and receivables securitisation could also help free up capital and reduce financing costs. By working closely with other business areas, such as procurement and operations, treasurers can evaluate supplier creditworthiness and improve cross-border transparency.
Apel stresses the risks of slow financial reporting. “Unfortunately, having a real-time perspective on the business has not been the standard until recently. However, CFOs are realising that they need access to real-time data, not just a PowerPoint four weeks later when it’s too late to react.”
Additionally, firms must factor in logistical developments. India’s investment in infrastructure – including port modernisation, highway expansion, and improved digital customs processing – should allow for more efficient trade flows, for example. Working with logistics teams to integrate supply chain visibility tools can ensure greater transparency in cross-border transactions for treasurers.
Regulatory compliance and tax strategy adjustments As new administrations look to bring about regulatory changes, corporates could see an impact on cross-border financial operations. The UK’s corporate tax policies remain in flux, and further tax increases cannot be ruled out. In the US, shifting corporate tax policies under a new administration could impact repatriation strategies and cash pooling arrangements for multinationals. In India, indirect taxation plays an increasingly pivotal role, with firms needing to adjust pricing strategies accordingly.
Employment costs are another area of concern. Higher employer contributions and regulatory changes affecting payroll taxes in major economies mean that financial executives, including treasurers, may have to reassess workforce planning.
Owen highlights the dilemma facing many corporates. “What firms have got to work out is, if they had plans to recruit X number of people, are they still going to see the return that investment in people was going to bring? Or can they try to squeeze a bit more out of the existing staff already in place?”
As workforce-related expenses increase, businesses may need to explore automation, outsourcing, or more flexible employment structures to optimise costs while maintaining productivity. At the same time, firms must remain compliant with evolving regulations, including labour laws, ensuring workforce strategies align with tax obligations and broader corporate financial goals.
Apel cautions: “If you think compliance is expensive, try non-compliance. The cost of failing to comply with new regulations is far greater than the investment required to stay ahead of them.”
Bolstering operations with technology Given the pace of market change, digital transformation must remain a priority for corporate treasury teams in 2025.
Marnhier-Foy advises: “The best way to manage risk is by leveraging new technologies. When you consider settlement, look at blockchain technologies. When thinking about settlement velocity, look at tokenisation. When it comes to risk analyses, have real-time data.”
Adopting cloud-based treasury platforms allows for greater agility, enabling treasury teams to scale operations across different markets. “Agility and automation go hand in hand,” Marnhier-Foy enthuses. “Cloud is the baseline for business agility, because in that context, the financial technology vendor will manage and update the software as needed. This enables the treasury platform to evolve quickly to market developments and treasurers to focus on other areas of their business.”
Of course, AI solutions are part of the equation for increasing treasury automation. Beyond that, it is also evolving into a more strategic tool for CFOs and treasurers.
Gavaghan highlights: “AI can process vast amounts of data to spot trends, model scenarios, and predict market movements, helping treasurers optimise hedging strategies and capital allocation.”
But those expecting a quick fix may be in for some short-term disappointment.
Apel elaborates: “AI will play a tangible role in finance, but it will take time. The real challenge is that many financial systems are still disconnected, and automation will only be as good as the data integration across those systems.”
Finally, cybersecurity remains a pressing concern, mainly as treasury functions rely more on digital infrastructure. Treasurers should collaborate with IT teams to ensure robust cyber-security protocols are in place, particularly around payment fraud detection and data encryption.
BOX 2: India focus: Stability, Strategy, and Global Appeal
India’s 2024 general election result reinforced policy stability while introducing new coalition influences. The BJP-led government remains committed to fiscal prudence, with a controlled debt-to-GDP ratio and strong reserve management. The Make in India[3] initiative, which celebrated its 10-year anniversary in 2024, has gained further momentum.
“The government’s steadfast focus on fiscal discipline, infrastructural expansion, and digital transformation ensures sustained foreign interest,” Devesh Makhijani, Senior Associate Vice-President, Darashaw, explains.
For multinational corporates, India’s business environment offers both opportunities and challenges. Streamlined regulations are helping to ease compliance, but a growing reliance on indirect taxation amid a limited direct taxpayer base requires attention. As such, tax policies will be key in shaping pricing strategies and profitability.
Regulatory changes are also streamlining business operations. For example, the government’s push for single-window clearance, where licences and approvals for trade transactions go through a single online platform, is helping to reduce bureaucratic delays. Foreign portfolio investors (FPI) and foreign institutional investors (FII) have also benefited from increased investment limits. And India’s China+1 strategy continues to attract global manufacturers as firms seek to diversify their supply chains beyond China.
Delivering treasury that is fit for the future
As treasurers navigate 2025’s evolving economic landscape, agility will be paramount. Firms must strengthen liquidity buffers, manage FX risks proactively, diversify supply chains, and leverage technology to drive efficiency.
Gavaghan reflects: “In 2025, treasury priorities will be significantly influenced by global economic trends, specifically political policies, perhaps more than at any other time in modern history. One key area of attention will be navigating the complexities of geopolitical shifts and their impact on trade and economic policies.”
Treasury leaders must actively shape corporate strategy to ensure financial stability amid uncertainty. Embracing digital transformation can help businesses capitalise on opportunities while mitigating risks. And while regions such as the Eurozone, particularly Germany, face economic challenges, transformative possibilities exist that treasurers can seize upon.
“The uneven distribution of economic growth globally presents opportunities for treasurers,” Gavaghan highlights. “Markets such as India and the UK offer avenues for long-term project funding and diversification.”
Treasury leaders are sharpening their focus on resilience and growth. Embracing technology, forging strategic partnerships, and tapping into high-growth markets will be key.
“The velocity of change is the main driver of treasury priorities in 2025,” concludes Marnhier-Foy. “Economic growth and volatility are not the same in every region. But what’s the same is the speed of change and the need for technology modernisation.”
