by Jonathon Traer-Clark, Treasury Practitioner Executive, Global Transaction Services EMEA, Bank of America Merrill Lynch and Bruce Meuli, Global Business Solutions Engagement Executive, Global Transaction Services EMEA, Bank of America Merrill Lynch
Over the past decade, many large corporates have concentrated functions, such as foreign exchange (FX), risk management, and corporate finance, or created structures such as an in-house bank, in order to improve visibility, control and efficiency. Often these developments have been eased or triggered by corresponding innovation in the banking sector, broader improvements in connectivity such as SWIFT, and common standards, such as ISO 20022.
Once established, many companies have further considered how their strategy should evolve in the future and how the visibility, control and efficiency established by centralisation can be effectively leveraged. As treasury becomes more strategic, it is increasingly called on not only to manage cash but also to oversee and govern broader capital sources – such as working capital – across the organisation. Furthermore, while treasury retains responsibility for day-to-day financial operations, corporates increasingly rely on its financial acumen to help determine the most effective deployment of capital.
An appropriate aspiration
All corporates can aspire to leveraging the capabilities and knowledge of treasury more widely across the organisation because of the risk management, efficiency and other benefits it can deliver. However, not all companies wish to extend the remit of treasury: finance may have ownership of working capital and capital deployment and the company may be satisfied with these arrangements.