8 November 2018 | By Dan Roberts Community

Next generation finance

While the fundamental goals of treasury management rarely change, new ways of working create significant opportunities, says Barclays’ Dan Roberts.

It’s no secret that the role of the treasurer has undergone a significant evolution in recent years. From the financial crisis of 2008 to more recent macroeconomic events, challenge after challenge has prompted treasury professionals to step up and play a more strategic role within their organisations.

In today’s market, there are certainly still plenty of challenges for treasurers to tackle. While funding conditions may be favourable – at least for the time being – years of low interest rates have made it difficult to achieve attractive returns on investments. Treasurers are required to protect their businesses from an increasingly wide array of risks, and the more rigorous regulatory environment has brought additional obstacles.

Treasurers everywhere also need to keep a close eye on macroeconomic developments and their potential impact on trade and treasury practices.

With Brexit on the horizon, and the prospect of a global trade war looming, the geopolitical environment brings numerous challenges for treasurers to navigate. Indeed, the International Monetary Fund has warned that mounting tensions between the US and its trading partners could cost global GDP as much as $430bn by 2020, with supply chains around the world likely to be disrupted by the arrival of hefty tariffs.

Innovations to consider

Against this backdrop, and in pursuit of more efficient working practices, treasurers are seeking to harness new tools and technologies. While many prefer to proceed with caution, there are numerous innovations in the pipeline which could pave the way to greater efficiency and better decision making.

These new opportunities are diverse and numerous. The payments landscape, for example, is being transformed by the increasing prevalence of immediate payments systems around the world. Treasurers should also be aware of the opportunities arising from the latest foreign exchange services, and the potential benefits these may bring in the area of cross-border payments.

Meanwhile, greater integration between internal and external systems could bring enhanced transparency, efficiency and accessibility.

Where working capital is concerned, treasurers are increasingly adopting solutions like virtual payment cards as they work to tailor supplier financing programmes to different suppliers’ needs.

Innovation is also giving rise to new funding sources and approaches, with areas of development ranging from green loans and bonds to partnerships between direct lending funds and traditional lenders.

Of course, there’s more to treasury than technology and innovation. Closer to home, treasurers should remember that attracting and retaining top talent is fundamental to the success of any treasury function – and that there is much to be gained by fostering a workplace which actively promotes diversity and inclusion.

In this dynamic environment, it is more important than ever to adopt a forward-looking approach.

You can find the full Barclay’s Next Generation Treasury report here

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