Key focus areas at EuroFinance International 2021, this year’s virtual gathering for treasurers, banks, CFOs, service providers and fintechs included working capital and ESG integration, says Bank of America’s Laura Franco Sarto, Head of Corporate Sales for Western Europe, Global Transaction Services, reflecting on her key take-homes from the global treasury shindig.
Speaking from Madrid, Franco Sarto said after last year’s frantic debt issuance in response to the pandemic, corporates are now focused most on improving their cash conversion and optimising their working capital from sales. Here she also noted treasury conversations around working capital provision to ensure companies’ ability to support their suppliers’ access to cash against the current backdrop in supply chain angst.
Conference conversation confirmed treasury’s growing strategic role, accelerated by COVID. “The role of treasury has continued to grow. Treasury is more involved in board level decision-making than ever before,” says Franco Sarto, noting treasury now guides decisions from working capital to M&A, ensuring all business units align with company goals.
Other sessions focused on global visibility and access to cash, as well as treasury increasingly prioritising cash flow forecasting, things she attributes to a legacy of the crisis. “I would say three quarters of treasurers have increased their focus on cash flow forecasting since the crisis. More than half will prioritise cash flow forecasting going forwards.” Something that is in turn fuelling the trend in highly centralised treasury models.
Consolidation of banking partners was another hot topic, says Franco Sarto, who called virtual accounts a “game changer” in this respect. “They are the best way of reducing multiple physical accounts and facilitating accounts receivable reconciliation.” Corporate fraud, which has spiked during the pandemic, was also a key theme in risk management sessions. “Companies value regular meetings with their banks and security groups to prevent fraud.”
The conference also underscored treasury’s digital transformation. However, treasury’s adoption of APIs to communicate with their banks and move from manual to real-time is mixed. “As an industry we are not yet here,” she says. “There is still a hybrid model, but we will see more of this in the future.”
Franco Sarto concluded with a nod to another pervasive conference theme: ESG. It was manifest in sessions exploring how corporates can develop their own ESG agenda, build KPIs, issue green debt and integrate sustainable chain finance solutions. Against the backdrop of treasury’s demand for ESG solutions, the importance of bank support - and banks own ESG integration - ran through. “Corporates were pleased to hear about our strong commitment to ESG,” she said. Something she compared to companies similarly digging deeper to gauge banking partners’ ability to support them in their digital journey. “They are only choosing partners that invest in digital tech and innovation because at the end of the day it is central to decision making.”