The core relationship between banks and corporates has not changed, despite businesses having more choice when it comes to service providers, Michael Cummins, head of treasury solutions at Citizens Bank, tells GTNews.
“The traditional relationship between corporate and banker still exists as treasurers need traditional bank and treasury services,” Cummins says.
“Corporations have more choice now than they had in the past. For example, if you wanted to put together a payables process you would have previously gone to your bank. Today corporations can go to non-bank providers for these services.
“In that regard, the relationship is changing but the core foundational relationship is the same, especially with the larger banks. These relationships are still valuable,” he adds.
Cummins’ comment goes against the views of many in the industry who argue that technology and open banking regulation is fundamentally changing the relationship between banks and corporates.
Cummins believes that CFOs have a much higher regard for the work that treasury teams do since the 2008 financial crisis.
“CFOs really saw the complexity of what the treasury operations do [during the 2008 financial crisis],” says Cummins.
Treasurers are taking on increasingly strategic roles in businesses as their day-to-day operations are becoming automated and CFOs are expecting more from treasury departments.
Indeed, Tim de Knegt, manager for strategic finance and treasurer for the Port of Rotterdam, argues that the biggest challenge for treasury teams in 2018 will be to “further strengthen its role as a strategic business partner to ensure they can give their invaluable input.”
Using robotics to automate day-to-day process has the potential to help with some of treasury’s heavy operational workload which frees up time to take on a more strategic role, explains Cummins.
“We are starting to use robotics in our daily operations whether it is opening accounts or day-to-day processes. Robotics will become the everyday reality,” he says.
“Treasurers’ real goal is to speed up receivables, slow down payables and to prevent fraud,” he adds.
“In an environment of consistently low returns, treasury teams are continuing to seek ways to increase yield and make their cash holdings work harder,” Cross tells GTNews.
“The impact of regulatory changes within the money market fund (MMF) industry will require corporate treasurers to review their treasury management policies and adapt them for a new regime of funds coming down the track”
“This has resulted in many treasurers looking outside of traditional money market and bond funds for extra return on surplus cash holdings.
“We anticipate these trends to continue in 2018, although, with interest rate rises in sterling now expected during quarter four of 2017, this may ease these pressures,” Cross adds.
Heaney argues: “The impact of regulatory changes within the money market fund (MMF) industry will require corporate treasurers to review their treasury management policies and adapt them for a new regime of funds coming down the track.
“Whilst these changes are not effective for existing MMFs until January 2019, it will be vital to ensure the changes and impacts of these changes, are fully understood by investors,” he says.
Cash-flow based metrics now feature prominently alongside traditional revenue measures of business performance in the key figures or financial summary pages of any public company.
GTNews asks Pugsley about what advice she would give to treasurers dealing with mergers and acquisitions, what the key challenges for her year ahead will be and how she is selecting a treasury management system (TMS).
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.
There are various ways for financial institutions to benefit from advanced technologies and business models provided by FinTech's. Whether a business' approach is radical or incremental, data management can help a company to increase their return on investment, argues André Casterman, INTIX.