Smart Routes Around Today’s Treasury Snags Seen from Both Sides of the Pond

Steering a course around the complexities of treasury and cash flow in today’s dynamic global environment can feel like being in the wheelhouse without an up-to-date sea chart  – and treasurers face the ongoing challenge of adapting to these conditions. Here, in the third in a series of TMI guest columns written by leading experts from ING Transaction Services, Tibor Bartels, Head Transaction Services ING Americas, combines perspectives from both sides of the Atlantic. He offers insights into the evolving demands on treasurers, the role of technology, and the critical need for banking partners to bridge regional and global operations.

From daily payments and managing working capital in different currencies to intricate trade-finance operations, the demands on treasurers are growing and becoming more complex. While technological advancements in corporate treasury can ease some of the burden, regulatory and operational complexity can make treasurers feel as if there is no relief.

I’ve spent years engaging with multinational corporations, both in the US and previously in Europe, which has given me a perspective on financial operations across these two regions and how to bridge borders. In this column, I want to share with you three transatlantic trends that corporates on both sides of the ocean should keep in mind as they address the evolving global situation.

1. Go beyond the headlines; the biggest threat could be in the day-to-day

Treasury challenges and opportunities for multinational companies are everywhere. Geopolitical unrest and uncertainty, disruption of supply chains, and shifting trade flows pose significant threats (and sometimes even opportunities) to corporate operations. Perhaps even more critical are the ‘plain-vanilla-threats’, related to fraud and compliance.

Cash conversion cycles raise essential questions: Where are raw materials sourced? Where does manufacturing take place globally? Who are the buyers? How and when are payments settled? These fundamental concerns are now deeply intertwined with geopolitical tensions and evolving trade patterns. Strong collaboration between banks and corporations is crucial to navigate these complexities, ensuring cash continues to flow and trade keeps moving.

2. Europe continues to evolve; local insights are critical

Global trade has become increasingly interconnected over recent decades. While technology has simplified managing financial operations across the globe, treasurers still face significant regional differences and preferences. From a US perspective, Europe might appear as a unified market. Yet, despite the EU’s harmonisation efforts, it remains a collection of distinct markets. These local variations are not always a result of legacy infrastructure – they can also stem from country-specific innovations, such as the local payment systems Bizum, iDEAL, and Blik in Spain, the Netherlands and Poland respectively.

Nevertheless, Europe is striving for greater payments’ harmonisation through initiatives such as Wero. Wero has begun with peer-to-peer payments in Belgium, France, and Germany, and e-commerce is set to follow in these countries and the Netherlands. For a US multinational, these local differences and preferences can be complex to navigate.

3. In uncertain times, tech can’t provide all the answers

Another trend I’ve noticed in recent years is the interesting evolution in treasury set-ups. After a strong push towards global centralisation, we are now seeing a clear shift back to regional structures – a shift that current global developments will likely accelerate. This evolution highlights the importance of partnering with banks with a strong network and deep local expertise.

Technology has enabled greater centralisation in corporate treasury operations. Advanced banking technology helps corporates navigate changing environments and adapt their set-ups accordingly. However, significant risks remain from external challenges including  political polarisation and geopolitical shifts.

Today’s government in the US, and some in Europe, for example, hold fundamentally different views on globalisation from their predecessors, resulting in trade barriers through tariffs, sanctions, and other restrictions, that impact global trade.

For now, this seems to be a new reality, in one way or another. In this evolving landscape, banks must do more than provide technological solutions. They should lead by helping clients understand these geopolitical shifts, explaining their impact on financial operations, and guiding treasurers through these new complexities.

My cross-continental experience – as a European working in the US – gives me insight into treasury operations from both sides of the pond. This perspective shows that today’s unpredictable global trade environment needs banking partners that blend deep local know-how with a global outlook.

FIs must grasp both corporate-wide operations and regional developments – from Europe’s evolving payments landscape to digitised trade finance – while helping treasurers navigate the daily twists and turns of geopolitical shifts.