Philippe Gelis is the CEO of Kantox, an award-winning fintech firm that specialises in FX technology.
It should come as little surprise that the role of treasurers has undergone radical transformation in the last few years. In the face of the turmoil caused by the Global Financial Crisis (GFC), companies around the world called upon their financial directors and teams to shore up their finances, defend the company from ill winds, and plot a course for a brighter or more stable future. As the financial storm passed, finance departments have continued to hold on to this new and more strategic role, taking a more active part in anticipating risk, driving growth, and supporting the CEO.
With the evolution of their role, treasurers need to be sure that their skill set has grown in tandem, to ensure they can flourish and add value in the post-economic downturn corporate landscape. They will increasingly be expected to guide their company’s senior managers and in my opinion, they will need to hone three skills to succeed.
Enhanced risk management skills
Risk management is not a new aspect of the treasury role, to be sure, but it has become more critical and requires a broader world view, as companies seek to steer away from the global liquidity challenges that have been identified in the post-GFC world. Adding to the complexity is a wave of new regulations, implemented by financial authorities worldwide with a view to reducing the possibility of another financial crash. All in all, this means that companies are having to dedicate increased resources to managing their risk and reporting their efforts to regulators.
While treasurers are fighting to keep their companies liquid, they have not been helped by the banking sector’s renewed focus on risk management, which has encouraged banks to seek government bonds and other “safe” investments, rather than lending to companies. Additional support has emerged, however, from technological breakthroughs. Advances in mobile technology, e-service and treasury management systems can enable treasury departments to view liquidity and risk at an enterprise-wide level, can facilitate reporting for compliance reasons and overall can enable a firm to increase its competitive advantage, if harnessed properly.
To better manage their company’s risk, treasurers need to plan ahead, investing the time necessary to research every potential risk that their company is exposed to. Crucially, they must keep their ear to the ground to discover new technologies and anticipate future changes to finance, such as liquidity challenges, exchange rate fluctuations and operational risk that could negatively impact their business.
As managing risk has become a harder task, treasurers are increasingly finding that they need to consult with a broad range of specialists, including solicitors, tax consultants and external compliance officers. Coordinating efforts with such a broad group of professionals demands effective interpersonal skills and potentially the requirement for intercultural or language skills.
In addition, finance departments need to break out from their silo and communicate effectively across their organisations, as they play a more strategic role in supporting business goals. Treasurers are being called upon to communicate with business heads, provide advice to senior management, and sit in on executive meetings regarding the direction of the company. For these reasons, communication skills are essential, as they enable treasurers to manage professional relations well and communicate capably and thoroughly.
Few could have anticipated the GFC and its impact on businesses today. It is crucial, however, that treasury teams stay abreast of any business, finance or industry changes that could impact on their company’s bottom line in the future. This is no easy task, considering the sharp proliferation in perils facing corporates since the GFC. At the moment these include continued instability in the Eurozone; lack of certainty over the safety of the global economy (particularly as the US phases out the experimental quantitative easing and the EU considers introducing it); formidable liquidity and credit challenges; and the possible effects of instability at Europe’s front door over the Russia/Ukraine dispute, among a myriad of further reasons for concern.
Knowledge is power and a treasurer must try to stay ahead of the curve to maximise their value to their financial director and to their employer. Knowing how to ensure compliance with regulatory measures such as EMIR, having a finger on the FinTech pulse, or being able to estimate the future cost of resources based on market data will prove invaluable to a treasurer’s company and could prove the difference between being ahead or behind the competition.
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