The biggest issues facing treasurers today

Duplicated, manual processes and foreign exchange volatilities are among the most common factors hampering corporate treasurers, while treasuries themselves are becoming more and more centralised.

The results of Deloitte’s 2015 Global Corporate Treasury Survey show that treasury groups are seeing their functions become ever more strategic, their organisations scaled up and their operations boosted by technology that supports global operations, cash repatriation and liquidity risk management.

However, they also reported experiencing challenges as a result of exposure to global economies, including emerging markets, as well as the growing threat of cyber attacks.

Half of respondents said that the ability to repatriate cash and manage foreign exchange volatility represented the biggest of these challenges. Meanwhile, 65% highlighted the problems of relying on multiple data sources and implementing multiple solutions, some of them manual, to deal with the needs of their organisation.

76% of respondents also noted that treasury activities are still, and increasingly, primarily carried out by centralised treasuries, highlighting a preference for using corporate treasury, centres of excellence and in-house banks.

The results were collected from 100 leading corporations all around the world, drawn from a variety of industries and locations.

As treasury takes on increasingly strategic roles within the corporation, it continues to be viewed as a risk management function,” says Melissa Cameron, principal of Deloitte & Touche LLP, and global treasury leader.

The findings of this survey add to our understanding of the challenges and solutions available to treasury groups as they close the gap to real-time and accurate financial exposures and control over cash exposures in all corners of the world.”

In its conclusions, Deloitte said that it was “critical” that treasuries get to grips with operational and technological issues “that mirror the larger threats to their colleagues across the business in emerging markets, third-party risk and cyber risk.”

It identified the following three emerging management challenges as being of particular concern:

1. Navigating restricted economies

Many companies face the opportunity of emerging market growth with the constraints of repatriation. Treasurers need to be able to speak to their boards and executives about the inter-play (and sometimes divergent outcomes) of these growth opportunities on earnings-per-share vs. cash returns, as well as discuss the liquidity and balance sheet consequences.

2. Increasing need for substance in foreign jurisdictions

Tax authorities are looking closely at the substance of global financing and treasury activities. Treasury teams should expect to see greater substance (decision making, scope of activities, and scale in offshore teams) in foreign treasury centers. This creates a unique opportunity to gather up the activities of countries not previously supported by treasury centers or shared services organizations.

3. Cyber threats have made it to treasury

Treasury departments are now being targeted in elaborate phishing, social engineering and hacking attacks. With the growing complexity of the technology infrastructure, data storage surface, and multiple access points for cyber threats, an organization’s internal monitoring and surveillance strategies as a whole may not be covering the assets treasury protects. Many treasury teams have focused on traditional process and financial controls, relying on team members to support systems administration and maintenance within its “four walls.”