The New Reality of Treasury

The role of treasury, and the corporate treasurer, has been evolving over the past decade. And there’s no turning back – pandemic or no pandemic, ‘the new normal’ is here to stay.

The business landscape is being shaped not just by Covid-19, but by digitisation, rapidly changing technology, geopolitical unrest and regulations for everything from financial messaging and transactions to data privacy. To stay relevant, treasurers need to be more flexible, adaptable and reliable than ever before.

There are six key areas of importance that treasurers should keep top of mind while planning for the near- and longer-term future: cash visibility, communication, cybersecurity, compliance, technology and flexibility.

Cash visibility

Accurate cash visibility, positioning and management are key to businesses surviving and thriving. Supply chain disruption due to Covid-19, and the resulting liquidity issues – paired with an uptick in fraud – have made it even more vital for treasury to know how much money there is and where it is, and be able to access it when it is needed.

Cross-functional communication

Treasurers need to have a solid understanding of how all areas of the business interrelate. This means actively communicating, and fostering communication, both interdepartmentally and with the suppliers and partners that make up the company’s supply chain. These include but aren’t limited to business areas such as legal, operations, and sales.

Cybersecurity

One of treasury’s responsibilities is protecting and defending business funds from cybercriminals. While payments fraud is the most obvious form of attack, it’s not the only threat. In addition to being a repository of corporate business funds, treasury is a repository of data –  and a potential window into the larger corporate infrastructure. Treasurers should be aware of the common types of cyber-attacks and take proactive defensive measures. 

Legal and regulatory compliance

Conducting business is complex –  even more so when  carrying out financial transactions in multiple countries and regions. In addition to country- or region-specific laws that impact finance, compliance with regulations such as the revised Payment Services Directive 2 (PSD2), the 5th Anti Money Laundering Directive (AMLD5), AMLD6, and the General Data Protection Regulation (GDPR) should be top of the agenda for treasury. It’s vital for treasurers to either add this knowledge to their repertoire or work closely with the departments and legal resources that have expertise in this area.

Treasury technology

Modern treasury tools provide automation to drive greater efficiency, as well as improved cash visibility, transparency, and increased reporting and positioning accuracy. They help detect and prevent fraud. They can also help support governance measures to ensure compliance and standards-driven change, such as migration to ISO 20022 (MT to MX). And they can be securely accessed by the right people, from anywhere, at any time.

Flexibility

To handle uncertainty and rapid change in the business and the world at large, flexibility is critical. Being a trusted adviser to the business – which is the goal for many treasurers today – has flexibility as a key requirement. Anyone working in corporate treasury right now is expected to adapt to constantly changing business needs. And in addition to traditional treasury functions, they may also be responsible for regulatory compliance, fraud prevention, financial technology, and higher-level support for the business. Those who aren’t  flexible won’t survive.

Multi-bank connectivity

For corporates working with more than a handful of banks and numerous accounts, a third-party multi-bank connectivity solution may be the right answer to address this new reality. Multi-banking enables treasury and finance teams to centralise their bank accounts and easily make secure payments to anywhere in the world. With the right multi-banking solution in place to aggregate bank communications and transactions, businesses gain the flexibility necessary to remain resilient in the face of any situation.   

Fides offers innovative solutions for bank connectivity, transaction aggregation and payment automation. For more information, please visit www.fides.ch