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Analysis

Treasury’s Move Toward the Strategic

Survey indicates that treasury teams are increasingly being asked to be strategic partners to the business, but they are lagging in use of technologies that could support this transformation.

Treasury teams are becoming increasingly strategic, but most are ill-prepared to leverage the technologies that can move them further down this path. That’s the headline news from Deloitte’s “2019 Global Treasury Survey,” released late last year.

Deloitte surveyed treasury professionals from an array of different industries, who are located primarily in Europe, the Asia-Pacific region, and the Americas. Nearly two-thirds of respondents (62 percent) reported that visibility into global operations, cash, and financial risk exposures is their biggest strategic challenge, followed by liquidity (57 percent) and currency volatility (50 percent). These results make sense because almost every respondent (97 percent) said liquidity risk management is a critical or very important mandate for their function, and 94 percent placed high importance on serving as a steward for financial risk management for the company. (See Figure 1, below.)

At the same time, 86 percent rated being a value-added partner to the CFO as a critical or very important treasury function. Eighty-four percent said the same thing about being a strategic adviser to the business. And 47 percent attribute at least some degree of importance to becoming a profit center. Compared with Deloitte’s 2017 survey, all three of these proportions are trending upward.

In fact, the proportion of treasurers reporting that becoming a profit center is a critical task for their team has nearly doubled since 2017, up from 15 percent to 27 percent. Melissa Cameron, finance advisory leader for Deloitte, advises reading that statistic in context. “I think for most companies, becoming a profit center is not about proprietary trading,” she says. This year’s survey added a descriptive phrase providing examples of how a treasury function might become a profit center: “performing proprietary trading and the ability to directly improve the bottom line.”

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Meg Waters

Meg Waters

Meg Waters is the editor in chief of Treasury & Risk. She is the former editor in chief of BPM Magazine and the former managing editor of Business Finance.

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