18th Oct 2021

Preparing your treasury team for 2022

The role of the corporate treasurer has evolved over the past decade.

Following on from the financial crisis in 2008, treasurers have spent the 2010s becoming risk managers, corporate strategy advisers, compliance officers, data scientists, regulator managers and liquidity risk managers – all in addition to their traditional duties.

The problem with this is that some of the more traditional skills of the corporate treasurer have taken a back seat.

This added complexity generated by a decade of economic stabilisation was, as you’re well aware, entirely upended by the host of new complexities generated throughout the start of the 2020s.

Around the world, people are looking to the future of FinTech for answers: will treasury services provide the solution? Is real time treasury management here to stay? And what are the treasury trends of the upcoming years?

We’re here to help out with just that.

By looking at some 2022 treasury trends and identifying current issues, the team here at AccessPay will help bulletproof your corporate banking solutions.

Dealing with Interest and Risk Within the Digital Treasury

Dealing with interest is always a risky business. And it’s something that many millennial treasury professionals have never had to work within the manner it was required pre-2007.

Cheaper, more traditional capital market and funding tasks have been diminished given the prevalence of inexpensive overnight financing.

There is rarely a guarantee that interested rates will remain stable, so it’s always important that your teams are prepared for the worst. Never has this been more true than throughout the past couple of years.

At the start of 2020, many treasury teams anticipated a rise in interest rates, given the continuation of their fall in 2019.

As we now know, this very much was not the case.

On March 11th 2020, interest rates fell to a record low of 0.25% – a fall down from 0.75% – before plummeting further a meagre 8 days later to 0.1%.

Although this is intended to help out those in senior finance and treasury positions, it’s easy to see how such a period of destabilisation caused shockwaves of ill-confidence throughout teams globally.

Learning to adapt and anticipate changes in interest rates – especially given that 2022 may represent a period of newfound economic stability – will likely be a crucial skill for treasury professionals in 2022.

Speaking of adaptability…

Adapting to the ‘New Normal’

Working from home isn’t going anywhere.

That’s not to say that we’ll exclusively be working from home – companies around the world have made a fond return to face-to-face meetings, officer chatter, and overpriced coffee trips.

Treasury is a naturally collaborative discipline, thriving on the generation of ideas and differing viewpoints that are best generated through physical interaction.

But treasury leaders need to demonstrate an awareness that flexibility is the so-called ‘new normal’, requiring new methods and techniques to maximise productivity.

No longer are treasury management systems and team-wide automation services (more on this in a moment) viable as an indulgence or luxury. In the digital age, they’re necessities.

Also worth mentioning is that, as ever, the realm of geopolitics remains … up in the air.

While Brexit no longer dominates the headlines (hurray), its impacts are still being felt as negotiations continue.

Many businesses are looking to set up an additional European treasury hub, while others are anticipating a rise in Euro-based payments throughout 2022.

How Can You Prepare Your Treasury Team for Uncertainty?

It used to be that treasury professionals just ‘had a nose’ for a variety of tasks, but that’s not sufficient anymore. The board, along with the regulator, will want to see evidence-based investment strategies.

With a rising tide of challenges on the horizon, it’s time to change the approach.

The answer lies in automation and analytics.

As aforementioned, a rising interest rate environment will create both risk and opportunity, so optimal treasury teams will need to be focused on value-added activities, meaning everything outside of this could and should be automated – a key 2022 treasury trend.

Automation adoption should focus on three key area to enable this to happen: Risk Management, Data Analysis and Concentration of Funds.

Risk management: The crisis shifted the focus from return on equity to liquidity.  You can now automate your liquidity reporting based on pre-defined rules, exposures and limits. Reporting exceptions, now the treasurer is only called into action when an issue arises, leaving them more time to focus on returns in the market.

Data analysis: The crisis and low-interest rates meant that treasurers stopped chasing their ops teams as fiercely for early positions as there was no real incentive to deal in the market early in the day. As rates return, you don’t want analysts spending hours every morning gathering data on last night’s closing balance and generating a figure which is already out of date by the time it’s produced. What you want, is a definitive centralised cash position when you arrive at your desk in the morning.

Concentration of funds: Automated cash management tools will help treasury teams quickly and easily identify pockets of uninvested cash sat around the banking estate. With analytics highlighting dormant cash, treasurers are able highlight requirements for additional banking products and services such as notional pooling and cross-currency pooling and negotiate on bank charges.

There is little doubt that automation has the potential to unlock treasury resource and that this will only become more prominent as rates rise.

Cash and Liquidity Management Simplified

Automating the tasks of risk management, data analysis and the concentration of funds has never been easier, provided you give your teams the right tool for the job.

The AccessPay platform has a full suite of automated cash management tools that allow your team to automate the likes of finance and treasury reporting and end of day reconciliation, whilst helping you achieve multi bank visibility across your entire banking estate.

Our platform acts as the integration layer between all of your banks and back-office systems meaning, through a single UI, you are able to create and automate seamless cash management workflows, irrespective of how many TMS, ERP and Banks you are working with.

To learn more, book a demo with us today.