Why is the world of corporate treasury complex? | A perspective Business Landscape
“Complexity is the prodigy of the world. Simplicity is the sensation of the universe. Behind complexity, there is always simplicity to be revealed. Inside simplicity, there is always complexity to be discovered”
BY Gang Yu
Having worked on treasury solutions for a while now, I can definitely say that the world of a corporate treasurer is complex. And what makes the world of corporate treasury complex is the topic of many conversations.
Here’s a perspective...
The corporate treasury office is constantly striving to ensure the financial well-being of an enterprise, to enable businesses to stay competitive, to deliver effectively today and to future-proof the company against the VUCA (Volatile Uncertain Complex and Ambiguous) world of tomorrow.
Several external and internal factors affect, influence and impact the daily operations, processes, decisions and strategy of the corporate treasurer. External factors include macro-economic issues, geo-political trends, global financial implications, industry trends, regulations and compliance, currency volatility and multi-dimensional risks.
Internal factors include the role definition of a corporate treasurer and the increasing expectations of the treasury office. Key among them is:
- Treasury is a corporate level function: It cuts across all enterprise functions, geographies and legal entities / business units, and hence it is imperative for the corporate treasury to know, understand and work closely with different (global) groups/ teams to ensure financial well-being of an enterprise.
- Treasury is multi-disciplinary: Treasury is at the interplay of business, technology, policy, process, people, procedure, operations and systems. Treasury operations span across front-office, middle-office and back-office, with each office using different systems/ products, people and processes. Treasury functions span across Cash and Liquidity Management, Payments Management, Risk Management and next generation payments/ emerging technology solutions. Treasury technology/ systems typically involve integration/ interaction with banks software, market information systems and in-house technology landscape for data and information.
- Treasury is an evolving function: Ever since the 2008 financial crisis, the role of a corporate treasurer is evolving and the expectations and boundaries are expanding every day. According to the 2015 Deloitte Global Corporate Treasury Survey, more than 70% of treasurers have clear mandates from their CFOs to be more strategic. This potentially translates to leveraging technology for automation of operational tasks, offshoring treasury services/ activities and consolidation/ standardization of treasury processes so that the treasury office has more time/ resources for analytical/ strategic functions.
What’s your view? What makes the world a corporate treasurer complex? Leave a comment in the section below to let us know.
Excerpt from the post published here ; Edited and re-published here