On September 8th 2020, Gresham Technologies (Gresham) brought together a selection of treasury leaders from across the UK, Europe, and the Middle East to discuss the current state of the treasury function, industry priorities, and what the future holds. Moderated by Peter Matza, former Engagement Director, Association of Corporate Treasurers (ACT), and Bill Wrest, Senior Cash Management Strategist, Gresham, the meeting covered a wide range of challenges and questions. We report on key highlights below.
Assessing the past: How did we get to where we are?
The discussion opened with participants considering not only how the treasury landscape looks today but also what has led us to this point? How do the various participants in the treasury ecosystem – corporates, banks, and vendors – interact with each other and which of them has played the greatest role in shaping the current state of affairs?
One participant, a Treasurer and Chief Risk Officer of a major industrial firm in the UAE, provided an elegant summary of the treasury journey over the past decade or so. They identified the financial crisis as a clear turning point, when the sudden and critical importance of cash meant that the treasurer was no longer a mere ‘piggy bank manager’ but was valued for their input on topics such as liquidity management, funding options, and of course cash generation and preservation. This shift in function also drove corresponding developments in technology, with the industry seeing real progress around the turn of the decade before there was something of a slow down as companies began to accept ‘good enough’ solutions.
Moving to the question of how the COVID-19 crisis has been handled to date, a Treasurer working in the private equity industry pointed out that the lack of technology and tools available or accessible to treasury teams during the lockdown made it challenging for them to provide executive boards with insights at the speed they would have liked. A Treasurer from a British manufacturing firm also indicated that the urgency of these situations often means using manual workarounds to get information in front of the board as quickly as possible.
At the same time, there was also an increased focus on the vital role of treasury in supporting businesses through this unprecedented time, with corporate treasurers being more frequently included in executive calls and cash and liquidity becoming high profile topics during the first part of the crisis.
Understanding present day priorities
So now that the treasury environment has shifted yet again, what are the key areas of focus for the industry? One participant, a Treasurer from the catering sector, stated that the treasury function has more to offer the business – whether that be in strategy and finance, understanding capital flows, or as working capital experts – and that being, as they described it, ‘at the shoulder of the CFO’ during the recent crisis presented real opportunities for the profession.
Collaboration was another theme, with one UAE based participant from an oil and gas services firm talking about a major treasury transformation process their firm has recently been through. They explained that alongside simplifying multiple ERPs and systems, they also focused on breaking down silos between departments and sharing best practices, forming transformation teams which focused on what was best for the organisation as a whole rather than their particular function. The importance of this was echoed by one of the moderators, pointing out that the interconnected nature of the cash management ecosystem means that no single vendor, bank, or partner can truly help without the development of more collaborative approaches across the industry.
What does the future hold?
Moving from the present to the future, the attendees discussed the challenges and opportunities ahead for the profession. Data continued to be a hot topic, with a Treasurer from a multinational entertainment firm pointing out that whilst they currently only use their treasury management system to see their cash and balances, there is a wealth of potentially exciting data contained in the detail on inflows and outflows and that this is something they hope to explore in the future using analytics tools.
There were questions as well over how the COVID-19 crisis has shaped future requirements for the industry, particularly around talent and skills. A Treasury Manager who had led their firm through a period of transformation highlighted that not only did they reorganise people internally, bringing staff from accounting and operations into the treasury team, they also shaped their hiring requirements to focus on candidates with IT and systems skills. Clearly the new treasury challenges are also having a significant effect on companies’ decision making in this area.
Many participants agreed that the future of treasury lies in moving to a business partnering relationship where treasury works alongside different departments to add value, whether that takes the form of working capital and supply chain finance expertise or sharing data with the finance team for fraud prevention purposes. What is certainly not in doubt is that the events of the past few months have demonstrated the strategic importance of treasury and intensified the need for technology solutions which can truly allow the function to flourish. It will be interesting to see over the coming months exactly what shape these solutions take and how the industry deploys.
To speak with Bill about the any of the topics outlined above or for help tackling your cash management challenges, please contact us below.