Future Treasury Report 2018: The treasury as a strategic partner—what’s standing in the way?

We’re excited to announce the release of our new Future Treasury report—which sheds light on something we’ve suspected for a while. As the world becomes more digitalised, Nordic treasuries are hoping to become much more strategic players within the wider business. But is this optimism justified? We’ve discovered a disconnect between treasuries’ ambitions and what they’re doing in practice.

Nordic treasuries are on the verge of fundamental change. Technology, geopolitical uncertainty and new financial risks are pushing corporates to entirely rethink their business models. These changes pose challenges and opportunities for modern treasuries. Will they use digitalisation to their advantage and become more strategic players by 2025? And if not, what’s standing in the way?

Read the future treasury 2018 report

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They want to have a bigger seat at the C-Suite table and a voice in core business decisions. In fact, they expect this to happen—only 1% of those we surveyed say the treasury won’t be a strategic function in 2025. But a disconnect does exist. Here’s where modern treasuries are falling down, and why change is urgent if they want to avoid disruption and ensure their future relevance.

Treasuries are missing the bigger picture

By 2025, the treasuries we surveyed expect to be doing more of everything. They’ll still have a strong focus on liquidity, cash management and managing financial risks. But they foresee a rise in other areas of responsibility— including e-commerce, payment factories and business innovation. How will they manage this growing mandate?

Treasuries are hopeful that technology will be an enabler, helping them achieve more with less. They believe they’ll be spending less time on back-office tasks. Tools like robotic process automation (RPA), the cloud and machine-learning could have a big impact on internal efficiencies. But it seems like treasuries are missing the bigger picture—what if everything becomes automated? It’s possible that technology could take over more than just the administrative tasks. That’s why the treasury needs to take more control of the digital transformation agenda.

They’re not proactively driving digitalisation

To avoid having its core responsibilities diminished or made obsolete by technology, treasuries need to be involved in the highest levels of decision making. That means driving digitalisation—and our report found that only 4% of treasurers believe they’re doing this. That’s concerning because it suggests they could have a much bigger say on the role that technology plays in their company’s future financial management.

And the wider business shares this view of the treasury. Of all the parts of the business, only the Chief Financial Officer (CFO) currently sees the treasury as a digitalisation partner. The rest of the business isn’t actively seeking its input. Treasuries need to challenge this perception and make their voices heard.

They’re not future-proofing fast enough

With rapid change happening in the payments landscape and new risks emerging, we’d expect treasuries to make future-proofing their systems a priority. Unfortunately, more than half (51%) of the treasuries we spoke to say their management systems aren’t future-proof. And a further 13% of those have no plans to upgrade or replace them.

They’re also failing to include technology in their finance policies. We think that’s surprising, given the significant impact that future technologies—like artificial intelligence (AI), RPA and robotics—are likely to have on business models and financial management by 2025. It suggests that even if these treasuries have a separate technology policy, it’s not fully integrated with their core objectives.

Time to take control

But it’s not all bad news. While our research shows a disconnect between ambitions and reality, there’s still time for treasuries to address this gap. If they can step up and take a leading role in digitalisation, they can leverage technology to their advantage—using it to provide richer financial insights to the business and actually increase their strategic relevance. They could even use technology to strengthen their strategic involvement in new areas—helping the business to enter new markets, drive innovation and enhance the customer experience.

To find out more, contact your Nordea Cash Management Advsior or write to txbmarketengagement@nordea.com.

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