COVID-19 has highlighted the importance of cash flow forecasting, data analytics and cybersecurity, and in so doing the pandemic has elevated the role of treasury.

More than 80% of treasury professionals globally said they believe treasury has become more valuable to their organizations during the pandemic.

Treasurers are tackling unforeseen challenges almost daily. Digital transformation has been fast-tracked. Security risks are growing. Work culture is being reimagined.

In the spring of 2020, our Journeys to Treasury alliance surveyed treasurers in search of practical insights applicable to senior finance leaders worldwide.*

The findings illustrate treasury’s rapid evolution and offer actionable ideas for navigating COVID-19’s impact.

Toward a Simplified, Modernized, Centralized Treasury

Companies of all sizes want streamlined operations, improved visibility into cash flow, and to optimize liquidity and manage risk. Treasury centralization can deliver all those advantages.

In our survey, 28% of treasurers identified centralization as a priority reflecting a long-term trend as treasurers push for better efficiencies and increased control.

The barriers to centralization have included: fragmentation and lack of standardization across processes and controls, bank relationships, account structures, and technology platforms.

But during the pandemic, the liquidity position has changed markedly for many businesses, underscoring the urgency of better managing liquidity and risk through centralization.

And with centralized treasuries adapting more quickly to the current business environment, some organizations are also seeing an injection of resources and support for the transition from senior management.

Top Priorities for Treasurers

Treasurers are reshaping how they work with teams and get work done. Creating the right culture and using the right tools has become crucial. With uncertainty clouding the horizon, finance leaders are asking themselves: What should I prioritize and how can digitization empower my team to make better-informed, data-driven decisions?

• Cash flow forecasting is the highest priority for 55% of treasurers, continuing a long-term trend, and reflecting the importance of liquidity management during the crisis.
• 62% use, or plan to use, data analytics—compared with just 43% in 2019.
• 35% use, or plan to use, application programming interfaces (APIs) to facilitate integration for on-demand or real-time transactions or data exchange.
• More than half (52%) of treasurers are interested in exchanging information in real time, and 47% are interested in real-time liquidity, real-time payments and collections.
• 37% reported that working capital management is a significant priority for them. But more than half (56%) indicated that they either have no role in working capital decision-making, or have influence rather than responsibility.

Cybersecurity: Heightened Vulnerability and Risk

The pandemic is proving a lucrative opportunity for scammers, fraudsters, and organized cyber-crime gangs.

Whether it’s Zoom meetings, fitness classes or virtual happy hours, work and social life have moved almost completely online. This can make them more susceptible to fraud.

Cyber criminals are exploiting this convergence of forces to spread malware and steal financial and personal data. The FBI calls the spike in fraud the “other” coronavirus crisis, and the SEC has warned of the growing cybersecurity risk to corporations.

Cyber criminals are using an array of attack methods and techniques that require organizations to respond to threats across multiple channels. At the same time, the proliferation of payments types has introduced new risks to organizations. Advanced technologies like multilayered security with adaptive authentication can help protect against threats, but treasury must also adopt a risk-management approach across the function. For example:

Treasury best practices:

• Ensure processes and controls remain rigorous given the extraordinary circumstances
• Allow extra time for key tasks to avoid making rushed decisions or taking action hastily and under pressure
• Build backups into approval processes and provide mobile access for critical business users to enable remote approvals
• Centralize master data handling
• Digitize processes, avoiding manual and undocumented workarounds
• Ensure systems deliver end-to-end traceability and drill down on individual transactions
• Use data analytics as an additional layer of protection and be particularly careful when dealing with new clients and/or suppliers
• Sanctions screening can be another potential line of defense

Payments best practices

• Make sure employees know you will never ask to make urgent payments that do not follow normal procedures. Make clear in your policy that refusing to act on an instruction that is outside normal processes would never be a disciplinary offense.
• Maintain vigilance against the risk of identity fraud.
• Check and double-check that you know whom you are communicating with. Contact them using known and verifiable details, particularly when onboarding suppliers or amending suppliers’ settlement instructions.
• Do not assume that callers are who they say they are (and don’t trust caller ID).
• Never give anyone bank or security codes.
• Check with management if you have doubts before executing a payment.
• Participate in community fraud prevention and supplier validation programs.

The COVID-19 crisis unexpectedly elevated treasury’s role in managing existential issues around liquidity and risk. Although the way treasury functions operate has been reshaped, priorities have remained largely consistent.

Treasurers remain motivated by a long-term, strategic view of business needs, as opposed to being impulsively reactive to the day-to-day demands of the crisis. They have been empowered by technology providing transparency, real-time data and analytics that supports transactions, maintains flexibility and accelerates supply chain and cash cycles.

In the face of the crisis, the priorities of treasurers have not changed significantly, reinforcing the stability of the function during uncertain times. But the role of treasury continues to evolve in the drive to deliver ever greater organizational value.

We are marking the fifth anniversary of our Journeys to Treasury alliance with a “COVID-19 Special Edition” series to help treasurers navigate this unprecedented period. Read previous articles on Cyber Threats, Business Continuity, Managing Liquidity Risk, Cash Flow Forecasting, FX Hedging in Volatile Markets, and Managing the Working Capital Gap.

* Journeys to Treasury is a unique collaboration between BNP Paribas, PricewaterhouseCoopers (PwC), SAP, and the European Association of Corporate Treasurers (EACT). The European Association of Corporate Treasurers (EACT) surveyed 200 treasury professionals from across Europe on treasury’s role and priorities. Survey responses were received between March 11, 2020 and April 15, 2020.