Corporate Treasury Technology + Trends 2023

Introduction

The financial services sector is under severe pressure in uncertain economic times and has been dealing with a risky environment for a while. Is it going to continue this way? In 2023, technology advancements and regulations are changing the corporate treasury landscape, thereby impacting strategic decisions for treasurers. Embracing technology can ease regulatory burdens, but compliance remains a crucial point.

Consumer expectations lean towards sustainable financial practices. Corporate treasurers should be alert and grasp how tech and regulations affect liquidity and growth. To thrive in today’s dynamic economic landscape, companies must keep up-to-date and quickly adapt to the changes.

So, what’s in store for the corporate treasury? Below we take a look at the emerging corporate treasury technology trends in 2023 and provide some tips on handling the challenges.

The State of Corporate Treasury Technology in 2023

Corporate treasury faces many challenges in 2023, like high inflation rates, geopolitical tensions like the war in Ukraine, financial crises, and stock market fluctuations, all leading to fears of a possible recession. To thrive in this uncertain terrain, businesses should follow industry trends.

Concerning corporate treasury, companies should be well-equipped for the turbulent economic climate’s changes and risks.

Banks remain the leading providers of corporate debt, with inflation and supply chain issues driving a greater need for borrowing. Despite the uncertainties, leaders stay optimistic about increasing organic investments and foresee growth in dividends and share repurchases by the end of the year.

Sustainable finance is facing challenges, like dealing with uncertainties and completing transactions. However, companies increasingly integrate Environmental, Social, and Governance (ESG) principles as a top-down strategy.

Remote working has become crucial for corporate treasury organizations, so there are no borders and limitations in attracting highly-qualified talent.

Changing interest rates are likely in 2023 as central banks address inflation, and companies can optimize interest rate differentials through their foreign exchange workflows by employing various strategies.

Corporate treasurers must focus on cash visibility, liquidity centralization, bank account rationalization, and automation to address the ongoing challenges. Treasure technology can play a significant role in closing the gaps in cash visibility and accessibility, with solutions like multibank reporting, and updated TMS and ERP platforms with modern connectivity options like APIs and Swift.

Overall, staying agile and leveraging technology will be crucial for corporate treasurers to navigate the dynamic landscape in 2023.

Corporate Treasury Technology Challenges in 2023

According to Deloitte’s 2022 Global Corporate Treasury Survey, organizations are facing five major corporate treasury challenges:

• 64% — Struggling to identify global operations, cash, and financial risk exposures
• 48% — Dealing with liquidity issues
• 59% — Seeking to enhance digital capabilities
• 45% — Coping with foreign exchange (FX) volatility

To address these challenges, Deloitte experts recommend three solutions:

1. Enhance liquidity management.
2. Improve cash forecasting capabilities.
3. Optimize capital structure.

Corporate Treasury Technology Trends in 2023

The Regulation Changes

In 2023, significant changes in regulations will affect how corporate treasurers do their work. Regulators want transparency, well-executed risk management, and stability. So, treasurers need a clear plan to meet these standards.

To meet the new regulations, corporate treasury departments must consider different things, like accounting, tax rules, and financial reporting.

Here are four main regulatory changes to remember when defining a compliance strategy for corporate treasury:

Automation and Digital Transformation

Digital transformation is still crucial for corporate treasurers and the financial industry, even though it’s not a new concept. To keep things running smoothly, treasurers want to be as productive and efficient as possible in the future. One big focus area is automation. Thanks to the rapid progress of AI and ML (artificial intelligence and machine learning), corporate treasurers have vital tools to automate important treasury tasks and improve their systems.

High Cyber Risks

According to the 2023 J.P. Morgan & Co report “Treasury Management: Understanding Your Risks“, corporate treasurers are urged to address five critical risks as top priorities:

Incorporating ESG Into Corporate Treasury Technology

ESG (Environmental, Social, Governance) is a crucial point for corporate treasury. Since treasurers handle financial and investment choices, sticking to ESG standards matters. Even if ESG compliance isn’t required, following these guidelines can affect how corporate treasurers support ethical and sustainable business practices. According to the Treasury Management International (TMI) report “Responsible Treasury: Your Essential Guide to ESG,” ESG is becoming increasingly relevant in corporate treasury operations. So, embracing ESG principles is a vital part of modern treasury management.

Strategic Corporate Treasury

Corporate treasurers are very important in times of economic uncertainty. They do more than just their regular tasks; they actively help make decisions, ensure money is allocated well, and keep finances transparent. The corporate treasury also brings different parts of the business together, like finance, risk and operations, to work toward common goals.

To do all this successfully, corporate treasurers need help from technology outside their department. Creating a strategic treasury involves getting the right resources and using digital solutions effectively and efficiently.

Global Corporate Treasury Management

Managing corporate treasury across different regions can require much work from multinational organizations. They face challenges from both operations and regulations in other places. But this connectivity is crucial to building a sustainable and robust business model in the global financial industry, which is increasingly interconnected.

For corporate treasurers, global connectivity has its benefits and difficulties. On a positive note, it allows access to talent and resources worldwide, which is helpful for international operations and efficient treasury work using local knowledge.

However, the broader global reach also means dealing with complex rules and supportive technologies. So, corporate treasurers must embrace these trends to navigate the situation, using innovative technologies securely to help the organization grow and make more money.

The Future of Corporate Treasury Technology in a Tech-Dominated World — Report

Would you like to dive into the emerging corporate treasury technology trends in financial services? Have a look at our latest report, in which we covered such topics as the current state of corporate treasury, the trends and the future of corporate treasury in financial services. Download the report now!

Treasury Trends 2023: Conclusion

Corporate treasurers have faced challenges related to cash flow, liquidity, and currency volatility in 2022, leading to an elevated role for CFOs and a need for rethinking processes and tools.

• FX hedging becomes necessary for businesses to tackle market volatility, as evidenced by losses some companies suffer due to currency exchange fluctuations
• Cross-border payments have increased, but firms face problems with slow payments and a lack of transparency, driving the need for more efficient and cost-effective solutions
• Supply chain disruption continues to be a major concern for businesses, emphasizing the importance of agility
• Technology integration is a key trend, allowing treasurers to manage payments and currency risk through streamlined platforms
• Corporate banking is also expected to improve to meet business customers’ demand for seamless real-time transactions

To sum up, treasury professionals should be prepared to embrace technology integration, improve currency hedging strategies, seek more effective cross-border payment solutions as well as focus on supply chain disruptions and potential changes in dynamic hedge effectiveness.

The future of corporate treasury technology is all about using fast information and advanced technology. Corporate treasurers need to stop using old systems that slow down their work. Instead, they should switch to modern treasury models that allow easy connections, quick data updates, and centralize necessary knowledge for the organization.