CASH MANAGEMENT, TRADE FINANCE | Staff Reporter, Singapore

Complexity in treasury management the 'new norm' in 2013

Guess what the 9 top priorities for Asian corporate treasurers are?

According to Citi, Corporate Treasurers in Asia are gearing up for another challenging year as companies are expected to face headwinds from volatile global markets and lackluster economic outlook.

Ongoing regulatory changes add to the complexity of  treasury management where economic uncertainty is now the ‘new norm.’

Here's more from Citi:

Insights derived from the Citi Treasury Diagnostic Benchmarking Survey showed a continued evolution of the corporate treasury function into an internal advisor to the business, contributing to corporate strategic planning. 

The survey was conducted over a period of four years, from 2009 to 2012, with 350 treasurers from top multinational corporations  (MNCs) representing a broad range of industry sectors. Of the respondents, 76 percent were from companies headquartered in developed markets and 24 percent from emerging markets.

“As treasurers strive to ensure they have the right strategy in place to address operational requirements, they are also recognizing the growing importance of external forces such as macro-economic, regulatory and technological developments when planning objectives and projects. We have identified three key trends that reflect the growth in the scope and influence of the corporate treasury today,” says Gourang Shah, Head of Treasury Advisory, Asia Pacific for Citi Transaction Services.

“The first is an increase in visibility and control over cash, funding and risk management. 64 percent of the respondents said they now have full visibility of their daily cash balances, an increase of 22 percentage points since 2009,” notes Shah.

“The second key trend is that treasurers from both emerging market MNCs and their western counterparts are displaying a strong appetite for centralization structures in the Asia Pacific region; and the third is an increased involvement of treasury in working capital management.” 

Based on these findings, Citi identified nine top priorities for corporate treasurers in 2013:

  • Establishing an optimal treasury structure for emerging markets
  • Funding working capital optimally
  • Mobilizing cash reserves to gain competitive advantage
  • Evaluating the organizational impact of regulatory changes
  • Preparing for SEPA migration
  • Leveraging reforms in China and India
  • Gearing up for converging bank standards
  • Leveraging advanced treasury analytical tools
  • Transitioning to an in-house bank model

“These priorities span across the full spectrum of the treasurer’s scope – governance, structure, cash, funding and risk management systems – and provide a broad view of what corporate treasuries around the world will be focusing on in 2013,” says Shah.

The treasurer’s challenge is to decide on the most appropriate priorities that will support the operational and strategic objectives of their business.  

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