Treasury Today January/February 2023

Published: Jan 2023



Treasury in a changing world

Treasury is constantly subject to change and in this edition, the first of a new year, the theme of change and how best to navigate it runs throughout. Our Insight and Analysis feature reports how companies are diversifying their supply chains out of China, building a dual supply chain to better navigate geopolitical, ethical or logistical risk. “Almost all our customers want to hear that we are opening other factories outside China. This seems to be the winning formula,” observes Jacob Rothman, President and CEO of Velong Enterprises, a China-based manufacturer of kitchen and household products for export. Picking up Velong’s Chinese supply chain and dropping it in another country like Turkey or Mexico is far from easy, and Rothman shares his approach to this seismic change.

Technology continues to reap profound change, none more so than AI. This edition explores how treasury is using AI particularly around cash flow forecasting, optimising hedging decisions, forecasting the parameters of the markets and improving data quality, but also flags how AI doesn’t come without risks or ethical considerations.

The ongoing transition from Interbank offered rates (IBOR) and evolving ESG regulation are front of mind for most treasurers. The transition to risk-free rates (RFR), or alternate reference rates (ARR) will remain a priority over the next 12 months although our interviewees report this transition is increasingly viewed as business as usual. In contrast, the climate transition is a growing risk and priority with ESG likely to have a significant impact on treasury, driven by financial institutions and corporate policies.

ESG also features high in our exploration of the key lessons treasurers have learnt during the last 12 months – and their focus in the year ahead. Alongside sustainability, black swan events, high interest rates to APIs are front of mind.

Lastly, this edition’s Corporate View features Rene Bustamante, Staff Vice President & Assistant Treasurer, Global Cash Management at FedEx Corporation. He discusses his unique career path into treasury, the challenges treasurers face in today’s environment, his views on emerging technology trends and the importance of giving back to the community, ringing in the new year with a loud endorsement of the importance of treasury and the career fulfilment it holds.

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