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by Sarah Boyce, Associate Director – Policy and Technical, Association of Corporate Treasurers
Industry View from
It is clear that the future CFO faces a complex and challenging business landscape. In addressing these challenges, they overlook the possibilities offered by their treasury teams at their peril.
As organisations and the external environment become more complex, the need for wise counsel from qualified, skilled treasury professionals grows. Geopolitical risk, uncertain markets, regulatory change and people issues weigh most heavily on the modern treasurer.
In this article we look at a selection of the key findings from the Association of Corporate Treasurers’ (ACT) annual bellwether research, which maps the trends and issues for treasurers, and the wider financial community. The Business of Treasury report paints a picture of a profession poised to take a bigger role in organisations – embracing a more strategic role and the technology that will enable it.
In an ever-more-complex world, organisations need skilled treasurers to provide them with robust, evidencedriven advice. According to this year’s survey the time spent by treasurers on business strategy, communications and relationship management continues to rise, and this is clearly a long-term trend.
Boards are listening to treasurers’ input, especially on risk-management issues. To make sure that treasury insights do inform business strategy, treasurers must continue to invest in their communications and relationship management skills, and CFOs must make sure they access this resource.
The following table highlights those areas where treasury and the board are working most closely together.
It is widely recognised that one of the ongoing challenges for organisations is the quality of data available to inform strategic decision-making, and the ACT research explores detailed views on automation and the opportunities and threats this may pose. Treasurers continue to embrace automation and look at new fintech solutions to help them do their jobs more effectively. “[The treasurer’s role] will become more analytical. The availability of technology will also impact processes and the type of job we do in treasury,” said one EU-based treasurer.
More specifically, automation will give treasurers greater certainty over the accuracy of their information, enable complex, real-time cash flow insight, and highlight risks more effectively. It will ultimately allow treasurers to be more strategic in their contribution to their organisation.
In this year’s Business of Treasury report we looked back at the trends of the last seven years of research, drawing on the findings to identify the key characteristics for the treasurers of tomorrow:
1. Adding Value. We’ve already seen over the past couple of years that the direction of travel for treasurers is away from tasks that can be automated (treasury management and controls, pension management), and towards business strategy, communication and relationship management, as well as corporate finance. We see nothing to suggest that this trend won’t continue.
2. The cutting edge of financial risk management. Treasurers’ focus on risk management is one of the key insights from this year’s survey. As treasurers become increasingly involved in helping define strategy, their expertise in risk management has clearly become evident. As the business world becomes ever more systematic in how it identifies, assesses and mitigates financial risk, the treasurer’s contribution must surely become invaluable.
3. Overseeing a highly automated function. How humans interact with algorithms is one of the most profound questions facing organisations today. This year’s survey showed how much impact automation is already having on treasury departments – automating routine tasks, moving treasury’s contribution upstream and, in some cases, enabling head-count reductions.
4. Highly networked. All the indications in recent Business of Treasury surveys are that treasurers continue to develop communication and influencing skills, alongside their core technical capability. This enables them to maximise their positive influence across the organisation and points to a future in which treasurers are highly networked within the decision-making circles of their organisation.
5. Sensitised to external forces. When you analyse the professional concerns of treasurers, you see that they are less consumed by internal factors and more focused on external ones – whether these are geopolitical forces, market volatility or cyber-security. This supports the core finding of recent surveys that treasury is less of an inward-looking function and increasingly one that is engaged with the outside world.
6. Inclusive treasury. The treasury function is becoming more diverse in its composition. Women make up, for example, almost 40 per cent of non-FTSE roles in this year’s Business of Treasury respondents, and roughly 30 per cent overall. We also identified a growing ethnic and age diversity in the profession.
Treasurers play a unique role – in addition to the detailed understanding of the organisation in which they operate, they are closest to macro-economic developments, particularly in financial markets, and can offer valuable insights to support corporate strategy.
As organisations and the external environment become more complex, the future CFO needs to access the resources available. Qualified, highly skilled treasury professionals can offer wise counsel.
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