6 Factors Changing the Future of Treasury Management

Supply chain snafus, the pandemic, and climate change add pressure on corporate treasurers to better track cash, monitor and forecast liquidity, and assess financial risk. No wonder 83% of treasury professionals say the value assigned to treasury grew during COVID-19.

Here are 6 forces reshaping treasury management:

#1: Customer & Partner Awareness

Pandemic-related shutdowns and volatility made customer and partner awareness critical to liquidity management. Supply-chain and climate-related disruptions are having similar effects.

• 86%: Executives who say cash flow and liquidity management was a priority in 2020—more than 2X 2018 responses
• 103%: Growth in transaction deposits in banks in 2020 vs 6% in 2019

#2: Real-time Data and Tracking

Real-time payments and reporting are helping companies cope with turbulent economic conditions.

• 73%: Percentage of US demand deposit accounts with access to the Clearing House Real-Time Payments Network
• 35%: Treasurers who use or plan to use APIs to facilitate integration for real-time data exchange

#3: Payments Automation

Report automation technology is streamlining workflows and facilitating automated payments.

• 70 billion: Real-time payment transactions processed globally in 2020, up 41% from 2019
• $6.7 trillion: Estimated value of digital payments in 2021 globally, a 20% increase from 2020

#4: Forecasting Challenges

“Forecasting is probably the greatest source of angst for any treasurer. What was predictable in the past is no longer predictable.” -H. Chip Spiegel, Director of Treasury Solutions, Bank of the West.

• 75%: Companies had supply disruptions in March 2020
• 39%: Small businesses that reported delays from domestic suppliers in July

#5: Internal Risk

Treasury risk now includes internal cybersecurity controls for the flow of information. Security measures must include multilayered, risk-based protection.

• 140%: Increase in data records leaked worldwide in 2020
• 63%: Percent of cyber incidents caused directly by employees

#6: Communications

Communication have become more vital to customer relationships and business operations in these volatile times.

• 95%: Treasury professionals who say communication is a critical skill for treasury leadership
• 52% of treasurers are interested in exchanging information in real-time