In recent times the need for a corporate treasurer to adopt an integrated, holistic approach has gone up instead of temporary solutions for individual issues.
The role of a corporate treasurer was confined to solely risk and cash management, but the speed and volatility of global business have transformed the responsibilities into something much bigger. Treasurers need to cope with the growing complexity of financial instruments, volatile financial markets and the introduction of new regulations and accounting practices.
The increased ownership of today’s corporate treasurer comes with more strategic decision-making and carries a huge list of new tasks which falls under the treasury’s court.
The diversification of the role is mainly attributed to the sophisticated platforms, regulations, and risks as the demand has skyrocketed and increased expectations, and as a result, the responsibility across the organisation has to be taken at short notice.
Regulatory changes have created a complex environment wherein corporate treasurers have taken up costs and responsibilities that were once taken care of by the banks. The reason being reducing the burden by removing certain asset ownership from banks.
Besides, the volatile markets have complicated the corporate treasurer’s role.
Recent regulations have kept a check on bank sales and restructuring desks, reducing the headcount dramatically. Corporations used to rely on banks well-equipped with manpower for additional requests. But today the corporations deal with simple requests from banks.
Regulations also bar corporations from rewarding banks and hence, procuring detailed market analysis and information from banks is too costly to afford.
The market transparency between the bank and corporations has significantly changed that has, however, been meaningful though. The accessibility to market pricing by corporations is at the same level as that of banks, something that was non-existent previously.
Trade details are readily available to treasurers who were once restricted to banks alone.
This beneficial development has helped corporates to access greater liquidity while increasing the responsibilities with the treasury group with the takeover of roles from banks. Corporations will now be able to freely and effectively handle invoices from their vendors as the treasury’s top priorities are liquidity, controllership, and efficiency. The rapid adoption of fintech is another factor working in their favour allowing less scrutiny on processes due to the transparency.
Technology has been contributing immensely for treasurers with in-depth analysis, monitoring of cash and risk management, and simultaneously adapting to all the regulatory changes.
Responsibilities and costs will only increase for a corporate treasurer in the future with more support from technology. A tactical combination of human intelligence with technology can help corporate treasurers to be the forerunner and create a strong foothold as they evolve even further.