Banking Fintech

The expanding role of the corporate treasury

The expanding role of the corporate treasury. Image by Teguh Jati Prasetyo,
Written by Patricia Hines

The road to an advanced treasury operation is a journey, says Patricia Hines, who advocates results that can help develop a roadmap for continued evolution.

The Association for Financial Professionals (AFP) recently published its 2017 AFP Strategic Role of Treasury Survey supported by Marsh & McLennan Companies’ Global Risk Center. The survey confirms that treasurers’ roles in most organisations are expanding, with their departments increasingly called on to support the execution of corporate strategy. Many now serve as strategic advisers across their organisations, taking on diverse responsibilities such as long-term borrowing, investing, payments strategy and execution, and counterparty risk analysis and enterprise risk management.

The key reason behind treasury’s strategic role? Senior management’s focus on liquidity and risk exposures, along with the call to improve cash management and forecasting.

The report analyses how treasury’s level of maturity impacts how well it can serve as a strategic partner to an organisation, the c-suite and board. To help organisations gauge the level of maturity of their treasury function, AFP and other treasury experts developed a treasury maturity model that defines five stages of maturity:

Treasury maturity model. Source: 2017 AFP Strategic Role of Treasury Survey, Celent Analysis.

The maturity spectrum

Technology and automation are enabling treasurers to focus on higher-value-added work, but nearly half of respondents either disagree or are noncommittal about whether technology is being used effectively by their organisation’s treasury to manage risk and increase its contribution to an organisation overall. Organisations positioned on the farther (more mature) end of the maturity spectrum are using technology more effectively than are those at the other end.

Strategic banking partners can help companies ensure they have the treasury technology tools to accurately forecast cash positions, assess capital allocation and manage financial risk. Banks that provide integrated liquidity and investment platforms can also help treasurers reduce borrowing costs, hit liquidity targets and increase risk management effectiveness through automation and digitisation.

The road to an advanced treasury operation is a journey, and these survey results can help develop a roadmap for treasury’s continued evolution. If you’re a corporate banker or treasury management professional, I highly recommend a reading of The 2017 AFP Strategic Role of Treasury Survey.

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– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. Read more here. Image by Teguh Jati Prasetyo,

About the author

Patricia Hines

Patricia Hines is a senior analyst with Celent’s Banking practice. Her areas of research include global transaction services and wholesale banking, with emphasis on treasury and cash management, corporate banking delivery channels, and trade and supply chain finance, along with commercial and small business lending.

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