Four Treasury Trends Powering the Real Economy
A challenging – and rapidly changing – macroeconomic backdrop, together with evolving digital business models, and the rise of ESG, means that smart and sustainable cash management is the order of the day. As such, omnichannel collections, embedded FX services, APIs, and sustainable corporate accounts, are among the latest trends on every strategic treasurer’s lips. TMI invites Philip Panaino, Global Head of Cash, Standard Chartered Bank, to share his insights on contemporary cash management innovations – and how to deploy them to greatest effect.
Corporate treasurers are in the thick of it. Inflation is rearing its head in many economies across the globe for the first time in decades. In Asia, inflation is sitting around the 5% mark, but in Europe and the US, it is closer to 9%. Some treasury team members will never have operated in an inflationary environment before; an uncharted territory for them.
Adding more uncertainty to the mix, central banks have been raising interest rates as a means to combat these inflationary spikes. Again, this is a macroeconomic phenomenon that has not been seen in many global economies, or factored into many cash management decisions, for more than 10 years. The low to zero, and even negative, interest rate environment had become all too familiar.
Of course, there are upsides to increased interest rates from an investment perspective; but from a borrowing standpoint, the news is far more challenging. And the increased cost of capital, coupled with margins being eroded by inflation and the energy crisis, makes for a very tough operating environment.