Corporate treasurers pursue trade finance fintech

A report released by financial technology group C2FO suggests that three in four European corporate treasurers are prioritising technology investments in trade finance heading into 2017.

Although this may be a surprisingly high number, tech innovations have been at the pinnacle of corporate investments and it’s no surprise for the industry to shift closer this space. Regulatory, currency and interest rates are also at an all-time concerning high for corporate treasurers, and 75% of those who are looking to invest in technology innovation, are looking specifically at the field of trade finance.

The report is based on the group’s second annual treasurer survey, which was conducted at the Cash and Liquidity Optimisation Europe conference held in London in late November.

“As the political and macro-economic landscape continues to shift, there is pressure on corporate treasurers to add value for shareholders in the boardroom,” said Colin Sharp, senior vice president (SVP) for Europe, the Middle East and Africa (EMEA) at C2FO.

“Successful treasurers are finding such value by embracing technology solutions to enhance trade finance while simultaneously creating a healthier supply chain.”

The survey also found that technology is seen as continuing to support the role of the treasury function, as it drives additional benefits for the whole organisation. Nearly three in four (74%) of the corporate treasurers surveyed agreed that roles in treasury will be revolutionised by technology innovation in the next three years.

The increased focus on innovation comes at a time when issues such as moves against base erosion and profit sharing (BEPS) tax avoidance strategies, the Basel III capital adequacy regime and know-your-customer (KYC) regulation (each cited by 32% of respondents in C2FO’s survey), along with currency fluctuations/market volatility (28%) and low interest rates (27%) are leading cash and liquidity concerns for corporate treasurers in the new year.

According to C2FO, corporate treasurers who are relying on technology innovation for trade finance this year, have high expectations in the areas of cash management (31%), supply chain and dynamic discounting (30% combined), as well as risk management/supplier risk (20%).

“Trade financing technology has the power to be a critical-value added resource for any treasurer’s toolkit,” said Andrew Burns, a C2FO director. “It presents a competitive advantage for corporate treasurers looking for efficient ways to manage working capital and generate a better return on cash.”

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