Shaping the Future of Treasury

Geopolitical headwinds, the global economy, and black swan events have led many treasurers  to expect the unexpected and reassess how treasury will look in the future. Change is happening on all fronts, and treasurers must respond. Not only do they have to manage liquidity effectively in the here and now, they must understand megatrends and endeavour to stay ahead of the curve.

Liquidity management strategies have topped the agenda, especially during the recent period of high inflation. While liquidity has been scarce at times, the relevance of the treasurer has not. The upside of the recent challenges is that treasurers have been elevated in importance within their organisations. Their role is now more strategic, and to do it effectively they need the right informationat their fingertips, which includes visibility of where their organisation’s cash is at any given time.

The need for speed also applies to the payments infrastructure into which corporates, and their banking partners, are plugged. Real-time paymentsare taking hold globally, and national systems are becoming increasingly connected cross-border. Although some still need to be convinced of the compelling need to be real-time, in some industries – such as those that are dealing directly with consumers – it is a no-brainer. In this real-time world some system providers are embedding APIs into their platforms to enable connectivity. One result of this offering is that treasurers will have access to accurate cash flow forecasting. During difficult periods, cash is often described as king. And as one expert explains in this whitepaper, if cash is king, then cash forecasting is queen.

Forecasting and anticipating future trends are part of the treasurer’s workload. And looking farther into the future, treasurers should also keep an eye on the longer-term directions that will impact the function’s future.

As this whitepaper highlights, one major trend is that companies are turning towards ESG and sustainability. These commitments are gradually being embedded into the way that companies and their banking partners do business. Trade finance has typically lagged behind the loan and bond markets in this respect, but now sustainable finance is being adopted in the world of trade. One hurdle – the lack of standardisation – is now being addressed, along with increased transparency about the methodology that sustainable solutions use. As with much in the corporate treasury world, the pace of change has been rapid, dizzying even, yet the journey is only just beginning.

The same could be said for the advancements in AI  and the breakneck speed at which generative AI has been adopted. Amid the noise and excitement about the latest tools, treasurers must understand their potential while also staying focused on the predicaments that need solving. While AI can help them with more accurate cash flow forecasting, for example, there is also a flip side to the technology. AI has become more accessible and more sophisticated, which also means criminals are adept at using it.

Financial crime continues to be a concern and treasurers and financial institutions are having to comply with everincreasing regulations that cover KYC and sanctions, for example. Also, there are other rules to navigate, such as the new industry standards for payments in the form of ISO 20022, which also adds to the treasurer’s to-do list.

It is something of a juggling act for treasurers to stay on top of everything and keep their treasuries running smoothly. They are not doing this in isolation, however. They have partners and peers to rely on for help; and if they communicate openly, and in a trusted and safe environment, they can shape the future of treasury together.

Chapter 1: "United we stand: Strengthening the liquidity ecosystem"

Robust and well-supported liquidity ecosystems keep the commercial world turning, whatever else is going on in society at large. But it’s the symbiotic relationship between bank and corporate that keeps those systems strong. Edwin Hartog, Head of GTB, Societe Generale, Netherlands, and Joost Bergen, Founder of liquidity management advisory and training firm Cash Dynamics, explore the nature of this true partnership.

Chapter 2: "How Soon is Now? What Instant Payment Really Means"

Service immediacy has become a priority for many today, and this includes payments. However, not all markets have moved at the same pace to deliver on this aspect. Does it matter? Our experts Stephanie Ekindjian Delliste, Global Head of Payments and Cash Management Solutions, and Philippe Penichou, Global Head of Sales, Wholesale Payments and Cash Management, consider the value and impact of instant payments.

Chapter 3: "Swapping Vanilla for Green: ESG’s Expanding Role in Trade Finance"

Sustainable finance has formed strong roots in the loan and bond markets, but where does it stand in the world of trade? Our experts Charline Profillet, Deputy Head, Structured Trade Finance, and Marie-Gabrielle de Drouas, Head of ESG Global Transaction Banking, shine a light on its developing role.

Chapter 4: "Cross-border payments: supporting the treasurers' juggling act"

Treasurers know what they want for their cross-border payments: seamless interoperability and liquidity management. This, however, is becoming harder to achieve amid geopolitical uncertainty and proliferating sanctions and compliance obligations. Add to that real-time operations, ISO 20022 standardisation and instant cross-border payments, it is easy to see how expert guidance is essential. Frantz Teissèdre, Head of Public Affairs, Cash Clearing Services, and Isabelle Poussigues, Head of Cash Clearing Offer, discuss how a bank can help.

Chapter 5: "AI: An Opportunity for Treasurers in Search of Performance"

Macro-economic environment and higher interest rates have stressed the importance of liquidity and how to precisely forecast cash requirements for corporates with the ambition to maximise return. As a consequence, artificial intelligence will certainly play a pivotal role in the monitoring of liquidity, working capital needs and investment by taking advantage of the management of the data while strengthening capabilities to better tackle regulation, compliance rules and fraud. Noémie Ellezam-Danielo, Group Head of AI, and Houda Anfaoui, CDO and Head of Data/AI transformation for Global Transaction and Payment Services, discuss Societe Generale AI’s end use cases, benefits, and advise on its safe roll-out.

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These articles are part of the whitepaper "Shaping the Future of Treasury", published by Treasury Management International (TMI) - September 2024. Click here to download the whitepaper.