2nd March 2020 – Corporate treasury departments are increasingly being asked to take on a greater role as strategic advisor to the business as a whole. The demands of these higher level initiatives mean treasurers and their teams need to save time by automating many of the routine tasks that once made up the bulk of their day-to-day work.
New data from a recent Greenwich Associates study of multinational and major corporate treasurers in the U.S. shows that nearly 90% of treasury departments say their key performance indicators have changed. To meet the new demands, treasurers said they need additional resources to fully support company initiatives, especially in tracking company’s risks.
“When treasurers were asked how confident they were in fully capturing and calculating their foreign exchange risks, we were surprised to find that nearly one in five treasurers were not at all confident about the data they were using,” says Ken Monahan, Senior Analyst for Greenwich Associates Market Structure and Technology and author of Forward and Upward: Changing KPIs Force Treasurers to Improve Their Risk Technology.
This uncertainty about data quality impacts what risk management strategies are chosen, and also influences the choice of systems used to monitor them. Greenwich Associates data also found that as firms scale, they tend to transition away from spreadsheets and toward purpose built applications because these are designed to handle higher quality data, and better strategies. In addition to having the right data (18%), what corporate treasurers want most is to:
- Improve the connectivity between their department and the rest of the firm (32%)
- Hire more staff (16%)
- Upgrade their treasury management systems (15%)
“Treasury departments are increasingly looking to new technologies and third-party providers to help them address data and risk management, partially because of budget constraints, but mainly because improved technology helps them to better diagnose their issues and improve their efficiency,” said Monahan. “All this, helps them pivot toward being more forward-looking and more strategic in their thinking.”
