In recent years, the role of the corporate treasury has been steadily evolving and transforming. Over the past decade, since the global financial crisis of 2008, the pace of this evolution has increased dramatically, and in the past few years, the strategic importance of the treasury function has been significantly raised as financial institutions have been required to respond to the rapid pace of disruptive change and the increased complexity of regulation.
While much has been said about the technological aspect of this disruption, the reality takes many forms, not least local and global political uncertainty, economic instability, extensive financial markets consolidation, demands for greater transparency and improved financial performance. Most important though are the widespread and significant shifts in the expectations of clients and the way in which financial institutions have to respond to these shifts. The new role of treasuries is to ensure sustainability of organisations throughout all these changes.
The reason for this shift in the role and importance of the treasury function is not hard to see. In an uncertain environment, where boards and executive leaders are not able to predict what the future holds for their industry, or even their sector, the need for at least some semblance of solidity is fully understandable, and a treasury must be able to provide that sense of security. This makes it an increasingly valuable contributor to shaping the strategy of the business, provided that the treasury function can demonstrate that it too has the ability to address its own challenges, provide efficiency and effectiveness in demonstrating this stability.
This transformation of the role of treasuries from basically being managers of working capital and liquidity and financial risks, to being vital contributors to organisational strategic and financial planning, requires treasuries to commit to clearly defining their strategic roles in the organisation and implementing the systems, models and mechanisms to make them the scalable, forward-looking, flexible and agile success enablers that their organisations need them to be.