Treasurers have assumed much more strategic roles within their organisations. They are increasingly integral to a company’s success, working closely with the board to manage risk and boost the bottom line.</p> As they are drawn further into managing debt, financing and hedging strategies, what challenges are corporate treasurers facing from their extended remit? What do they want from their banking partners in order to efficiently maintain their department?</p> Representatives of the Malaysian Association of Corporate Treasurers (MACT)</a> and the Association of Corporate Treasurers (Singapore)</a> – ACT(S) – gave their perspective on how the role is changing.</p> “Whilst the need for operational efficiency and ensuring sufficient control remains the same, optimising capital and managing financial risks have become more demanding in light of increasing volatility and uncertainty in the financial markets,” says Mohamad Derwish, president, MACT.</p> “Treasurers will be spending more time understanding their business, and what is driving risk - which goes beyond FX and liquidity risks. A more holistic assessment is required to devise a sustainable risk management strategy. In addition, increasing demands from shareholders are prompting a need for better cash management and a more effective approach to funding.”</p> Damian Glendinning, president, ACT(S), agrees on the importance of effective risk management, but believes that, in some ways, things haven’t really changed that much: “I am probably going to sound old fashioned, but I really think that the role of the treasury function has always depended mostly on the personality of the treasurer and the nature of the company, rather than anything else. Today, we have a lot more centralisation and information flows a lot faster – but the ability to interpret it and use it in a risk advisory capacity (and be listened to!) is still very much a function of the circumstances.”</p> With the treasury function having to find more efficient operational procedures to deal with the growing demands on its time, is emerging treasury technology the solution?</p> The MACT’s Derwish believes so. He said: “Advances in technology, such as ERP (Enterprise Resource Planning) and better interfacing with banks, have enabled corporate treasurers to move to a more strategic role from the traditional transactional and processing role.”</p> “Technological improvements will continue to be a driving force for more efficient treasury operations, and there is an increasing use of mobile solutions.”</p> The ACT(S)’s Glendinning would like to see more user-friendly technology integrated further into the function. “There is no doubt that, overall, we do not use technology anything like as well as we should,” he says.</p> “I have been working in the technology industry for many years, and the main lesson I have learnt is a simple one - the companies who make the technology user-friendly are the ones who win. The technology itself may be complex, but it can be made simple to use. We need to be in the situation where we can do ‘plug and play’ – we should be able to plug into any bank service and have it interface automatically and accurately with our systems.”</p> Many multinationals are looking to simplify their banking relationships. This begs the question, what exactly do corporates need from their banks in 2015?</p> Glendinning offers a stark response: “We don’t expect much from our banks. That was true even before the financial crisis and the new regulations, which are adding a lot of bureaucracy into how we interact, especially when it comes to opening new accounts. Now, we are mostly concerned with just trying to keep business moving. In terms of what we really need, we should all have straight through processing between our systems and the banks. We are a very long way from that.”</p> Derwish thinks that multiple banking relationships are necessary for the majority of treasury functions, especially as more companies work across more borders.</p> “Nevertheless,” he says, “attempts to consolidate banking relationships are gaining momentum where banks can truly show the benefits in doing so. The rising popularity of centralising treasury operations via RTCs (Regional Treasury Centres) or in-house banking have spurred many banks to provide more comprehensive services to corporates.”</p> This increasing trend of RTCs and in-house banks in Asia is somewhat checked by the fact that infrastructure and regulatory frameworks differ between countries. “Thus most structures are hybrid in nature to achieve an optimal balance between global consistency and local flexibility,” he adds.</p> What of the contrasts between Asia and other markets? Whilst the underlying realities of treasury management are the same, Glendinning highlights that the region has some advantages compared to the US and Europe, and some handicaps.</p> “The advantages are principally that economic growth here is much stronger than in the West. This generates an optimism, and a reason to invest. It also brings home the complexities of managing large international organisations, and so is generating a rapid development of the treasury profession. For example, China has a tremendously efficient and advanced nationwide real-time gross settlement system, which can get funds from anywhere in this vast country to anywhere else within 45 minutes.”</p> “The downside is that there is not a long tradition of corporate treasury management, so not everyone is taking full advantage of the systems which exist,” he counters.</p> The Corporate Forum </a>at Sibos 2015 Singapore takes place on 14-15 October. Register now to join the discussion on industry developments and debate the challenges faced by corporates and banks.</p>