Dear Reader,
If there is an overarching theme to this issue, it is how treasury teams are staying on top of any challenges that they come up against despite finding their tasks multiplying.
As is made clear in our lead article, it is vital that treasury teams are prepared for every eventuality in what is considered an unpredictable economic climate.
We quote one group treasurer and head of corporate finance as saying that even seven years after the 2007/8 financial crisis, the effects can still be felt. “The markets remain unsettled and it seems that every day brings new developments”.
Therefore, he asserts, corporates have no choice other than to adapt and develop the tools needed to contain risk and support the growth of their businesses.
“The prime challenge for all financial management and treasury teams remains to understand the market well, identify and accurately calculate their exposure – and then deploy optimal strategies to manage that exposure. In these conditions, liquidity and cash management, to manage risk and enhance returns, is also critical.”
Another article concurs but adds that although treasury teams find their core focus still remains on tasks such as cash management, cash forecasting and compliance, their role is widening.
According to a survey conducted by Kyriba and the Association of Corporate Treasurers,“Treasury teams are playing a broader role, and are contributing to a wide range of tasks beyond pure treasury, cash and risk management.” It discovered that almost seven out of 10 treasury professionals contribute data and analysis towards strategic decision-making, and six out of 10 are involved in working capital management.
The goal of the survey was to see how treasury professionals operate; how productive they are; what challenges and concerns they face; and what type of technology platforms they rely on.
But added the authors, “Equally important, was how strategic are treasury professionals? Do they primarily focus their efforts on functional tasks, or more higher-level, strategic and analytical activities? To what extent do they believe that their activities have an overall positive impact on the organisation at large?”
Also in this edition, in an exclusive interview with one of the Gulf’s leading banks, the fundamentals of running a successful cash and trade business are expanded on. According to the bank’s head of global transaction services, it is operating both cash management and trade finance as a seamlessly integrated transaction banking proposition.
“This,” he is quoted as saying, “has had a very positive response from all of our corporate customers, from the smallest business to the largest conglomerate, and we have found that what our corporate customers want is a credible and consistent provider of cash and trade products, services and, most importantly, advice on how to become more efficient and improve performance.”
He added,“We have implemented an operating model that allows us to provide a completely integrated solution platform that can satisfy the needs of all our target customers for any type of cash or trade transactions.”
Still on the subject of treasury responsibilities, another of our articles looks at how MENA can benefit from changes in the Eurozone.
In short, the deadline for implementing an obligatory Single Euro Payments Area (SEPA) has now passed for the 32 countries in that zone. The culmination of a concept that began with the euro, this deadline saw the ultimate achievement of a standardised and harmonised payments region, homogenising the previously different retail systems, prices and regulations.
Now, the standardisation – both legal and technical – that SEPA offers will reduce the cost of payments, increase competition and maximise the ease of cross-border payments.
Most importantly though for readers of Cash&Trade, this has implications for corporates outside the eurozone and it’s said that “multinational corporates (that trade with Europe) cannot afford to ignore its broader implications – nor miss out on the example it sets for payments and treasury”.
There are other benefits, too. For example, multinational corporates – from the Middle East to Africa or elsewhere – with trade or subsidiaries in Europe can simplify their operations by rationalising both their number of bank accounts and treasury departments within the zone.