In the 20th century many businessmen thought that with technology the march of progress would homogenise practices and workflows in treasury. Cash management would centralise, payments standardise, and global treasury would become common. Yet for many companies, treasury is still a local or regional affair. The technology is there, and now that global markets are so connected we really do need to think about multiple regions, even when dealing with cash management within a single one. Yet this kind of global focus requires a shift in how companies think about treasury, and most notably cash management, as there are fundamental attitudes and infrastructural differences in cash and payments between regions–especially America and Europe.
If you had asked treasurers 20 years ago how they saw treasury evolving, you would have been told that it was going global. Business had made that jump in leading into the 80s, and technology was enabling more than anyone had imagined. Yet cash management has remained fairly regional, or even local, due to several key differences between Europe and North America which emerged early on, creating major infrastructural and attitudinal differences in how cash management functions between the continents.
Cash management has remained fairly regional, or even local, due to several key differences between Europe and North America which emerged early on
Currency is, of course, an obvious difference. Europe has always been a continent of many markets, dealing with many currencies – and therefore also much currency risk. European companies have had to deal with heterogeneous issues in the field of payment transactions for decades and work hard to have common standards. This has resulted in a system where European treasury is either executed completely independently per location, or within the appropriate hubs: London, Zurich, Frankfurt.