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:
- Customer and 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—a 2 X increase since a 2018 survey
- 103%: Growth in transaction deposits in banks in 2020 vs 6% in 2019
- 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 have access to the Clearing House Real-Time Payments Network
- 35%: Percentage of treasurers who use or plan to use APIs to facilitate integration for real-time data exchange
- Payments Automation
Report automation technology is streamlining workflows and facilitating automated payments.
- 70 billion: Number of real-time payment transactions processed globally in 2020, up 41% from 2019.
- $6.7 trillion: Estimated value of digital payments made globally in 2021, a 20% increase from 2020
- 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%: Percentage of companies that had supply disruptions in March 2020
- 39%: Percentage of small businesses that reported delays from domestic suppliers in July 2021
- 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
Communication has become more vital to customer relationships and business operations in these volatile times.
- 95%: Percentage of treasury professionals who say communication is a critical skill for treasury leadership
- 52% Percentage of treasurers are interested in exchanging information in real-time