London – Citi has released its latest findings from Treasury Diagnostics, its global corporate benchmarking survey designed to help companies assess their treasury, working capital, and risk management practices. The Report, which surveyed the opinions of over 475 large companies from a diverse range of industries and geographies, is titled Balancing Digital Aspirations While Addressing Risk Management Fundamentals and highlights key focus areas for corporate treasurers, while revealing that addressing fundamentals remains the most important focus for many.
As we emerge from the global pandemic, many corporate treasuries have established greater resilience across their operations with many now commencing the journey away from the manual processes of the past to adopting new techniques and digital solutions to make ready for the future.
For some, this means future proofing treasury through intelligent automation—initially based on rules and then extending to algorithmic techniques to augment human decision making. For most, however, the report shows that addressing the basic building blocks of data, processes and people to best measure and manage objectives remains the focus.
Digital Aspirations Exist but Infrastructural Challenges Remain
The report finds that there is broad client interest in "all things digital" in treasury and finance, including the use of emerging technologies for process automation and data-led insights.
However, many companies need to first focus on the treasury infrastructural fundamentals. The report finds low levels of automation and connectivity with bank systems highlighting the inability of some companies to effectively integrate their technology ecosystem.
"While Treasury objectives remain constant and digital opportunities exist in how those objectives may be delivered, for most treasuries, fundamentals need to be addressed to lay the technology foundation and data layers for realization of future aspirations." – Stephen Randall, Global Head of Liquidity Management Solutions.
Playbooks for Treasury Emerging
Depending on factors such as treasury maturity, legacy infrastructure, appetite to automate and aspirations for the role in which treasury will play, new playbooks for treasury are emerging.
This report introduces the Citi Digital Treasury Index, which assesses companies' digital aspirations and preparedness expressed in their Citi treasury diagnostics responses. The Index provides tangible guidance to companies' treasuries as to how to commence their journey to digitalization, the report offers playbooks for treasury. Each playbook is dependent on current levels of treasury maturity, digital effectiveness and future digital aspiration:
"New digital technologies and the evolution of financial services has prompted corporate treasury to rethink its future. Harvesting and utilizing data as a means to optimize and meet company risk management objectives is now a top priority amongst many of our clients" – Flavio Figueiredo, Global Head, Rates and Currencies Corporate Sales and Solutions.
Risk Management Fundamentals: Opportunities Remain
While the advent of new digital technologies and the evolution of financial services has prompted corporate treasury to rethink people, technology and processes deployed to manage risk, the fundamentals of treasury best practice remain. This study shows that effective treasury policies, delivered through processes and procedures, managed through key performance indicators is the foundation for achieving financial risk management objectives and a best-in-class treasury function.
"Corporates are now conducting comprehensive policy and ERP/TMS technology reviews with the main question being asked by seniors - where, when and how does currency risk emerge?" – Jaya Dutt, Global Head of Risk Management Solutions.
About Citi Treasury Diagnostics - Balancing Digital Aspirations & Needs while Addressing Risk Management Fundamentals Survey Demographics: Participating companies varied in size, with 64% ranging from $2bn to greater than $25 billion in annual turnover and representing all sectors of the economy and all regions across the globe. Respondents shared their views and methodologies pertaining to their operational and financial risk management processes as well as technology.
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
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