Future-proofing Global Treasury Teams

This quote is one of many insights contained in our detailed report on managing treasury organisations. More and more, treasurers are telling us that the people side of the role is key: you can have the best technical solution, but treasury’s contribution and importance will not be understood if you can’t communicate with the business.

At the same time, we are becoming ever more dependant on IT. Routine tasks are being automated, and the holy grail of becoming the strategic advisor to the business requires the ability to analyse huge amounts of data. Ironically, when treasurers need to make sure they have a key skill in the team, it is more likely to be an IT capability than being good at discounted cash flows – it is easier to teach the traditional treasury skills.

• Change management is also key. New technologies, and shifting organisation structures such as shared service centres, are re-defining roles and organisation structures. The task a person has been successfully performing for years may no longer exist, or may move to a different function or location: career development may mean moving outside treasury.
• As usual, the full report brings many insights. The main points:
• Change management: jobs are moving from processing transactions (increasingly automated) to more strategic, higher level analysis – especially improved cash forecasting. Buy-in is essential: these changes can be discomforting. Transparency is important: team members need to see the benefits of improving the processes and systems, and to have individual development plans to equip them for the new reality. It is best to involve them in projects which expose them to the new areas.
• Everyone is under constant pressure to do more with less. Inevitably, this reduces career progression opportunities within the treasury team. The preferred solution is to encourage and facilitate mobility between treasury and other finance functions. Treasury skills can be acquired on the job – but there will be attrition.
• Good IT systems help by automating a lot of the low value added administrative tasks, but they can also provide more flexible reporting and data extraction, enhancing analysis and reducing the need for people to prepare data manually.
• The relationship with the system is also a challenge. People need to accept and trust the output – but it is also important to have checks.
• Training is a challenge. The automation of many tasks has meant there is less scope to “learn the ropes”: new team members often have a steep learning curve, especially given the increase in job scope and, often, the need to understand the IT system. Several participants reported a concern about dependency on key staff, who could not be easily replaced.
• The creation of remote shared service centres (SSCs) contributes to this problem. It is increasingly common to have the back and front offices in different locations, often on different continents. This creates efficiencies, but makes it very difficult for staff to transition between the two.
• SSCs often cause changes in how roles are split between functions: a payment factory, for example, may take over activities which used to be in treasury. Given that many SSCs are in low cost jurisdictions, this creates concern for job security in the existing team. Again, the treasurer may need to convince the team of the need for, and benefits of, change and flexibility.
• Some treasuries are highly centralised, while others may have small teams in different countries – these can be as small as a single person. Usually, other finance functions are called on to help with the issues this creates.
• The interaction between IT systems and detailed knowledge of processes is a cause for concern. One participant was trying to get the team to accept output from the (new) system without trying to check it all manually. Others are concerned that the systems may become black boxes, where no-one understands what is going on inside, and the team no longer understand the underlying processes. One participant looks to the banks to provide training assistance here.
• Today’s environment puts a premium on having an open and enquiring mind, and being willing to learn and adapt. One participant expressed concern that, in their experience, younger recruits often do not display these qualities.
• The press often talks about the challenges of remote working. Participants on this call had varying approaches. One has everything in HQ, with 100% office presence being required. At the other extreme, one has team members in many locations, with on-site presence required 50% of the time. In this case, team collaboration via video conferencing is deeply engrained and is not an issue: in fact, it helped during the pandemic.
• New systems can cause problems when other functions do not change. One participant had issues with auditors because the bank statements are now transmitted via SWIFT, instead of being printed on the bank’s headed notepaper.

Bottom line: today’s reality for treasurers is a fast paced, changing business environment with lean organisations, often widely dispersed geographically. IT systems underly everything – and communication is essential to make sure the role is understood and the value added appreciated.

So – the treasury team which is best prepared for the future is flexible, with a solid IT base. And which communicates. Treasurers need the technical skills – but the soft skills are vital.