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Charts to tell the story: Global Corporate Treasury Survey 2022

Feature-image

EuroFinance is pleased to share the 2022 Global Corporate Treasury Survey. Explore the key findings on risk management, technology, liquidity and cash management, ESG and more. 

by Anmol Karwal

Published: December 8th 2022

The 2022 Global Corporate Treasury Survey was conducted during arguably the most tumultuous time for corporate treasurers in the last decade. Still coming to terms with a post COVID world treasurer’s face a multitude of fresh challenges such as commodity inflation, supply chain bottlenecks and heightened FX volatility.

Treasurers frequently deal with risk and are well equipped to handle these difficulties. However, the current economic market will significantly affect some enterprises and, consequently, their treasury units. Here are the key themes that have emerged during the year.

Hedging emerges as a key strategy to mitigate macro risks

Almost unanimously, a majority of respondents said that FX, commodity, geopolitical and liquidity risks have emerged as a key risk management priority in 2022. But how do treasurers de-risk their operations? 

Amongst a plethora of strategies, hedging using financial derivatives has emerged as a key tool to allay macro headwinds. Survey results suggest that 62% of treasurers feel that hedging is moderately to extremely important for them. Meanwhile, on average, one out of three treasurers mentioned that they will increase their notional hedge ratio (Notional amount/ underlying forecasted exposure) in 2022.

Cash management and liquidity continues to remain a top priority for treasurers.

Unabated volatility in the last few years has made cash balance visibility extremely important for treasurers. These periods of uncertainty have brought testing times for treasurers when they have to ensure that their firm is well funded and liquid to weather the storm.

70% of treasurers said that liquidity and cash management is the top priority for them going forward and when asked about if there are any changes in liquidity and cash management activities, 67% responded that they spent more time on this treasury function.

 

Meanwhile, 54% of treasurers mentioned that cash visibility is the highest priority for them in their relationship with their transaction and cash banking providers and analytical quality being a key priority for 40% treasurers. 

Furthermore, an important aspect under this function is ‘cash flow forecasting’, wherein treasurers try to forecast future cash positions to proactively plan for any liquidity shortfalls or surpluses.

Often the challenge faced by organisations are the inability to forecast due to insufficient cash flow data received from the business, inaccuracies in those forecasts, or not having a suitable tool to process and present forecasts. 55% of treasurers said that cash flow forecasting is their key priority going forward. 

Real time treasury

In our previous report we saw an increasing involvement of the treasury team in board level meetings; treasurers themselves want to take charge of the front seat and be “value generators”. To do this it is necessary for them to have a digital and real time treasury and the survey suggests these solutions are being rolled out within treasury operations. 

Consistent across all company sizes was an increased focus of combining technical treasury experience with data/modelling, digital, as well as soft skills. Comparing the level of adoption of key technologies by treasurers last year with the 2022 survey, we saw that there has been an increase in the proportion of treasurers who have embedded data warehousing, APIs/Cloud and Virtual bank accounts within their operations. 


ESG enters treasury mainstream

By committing to net-zero carbonisation targets, ESG was a key emerging theme in the last few years, and has now moved to the centre stage in 2022. 53% of treasurers said that they are in the implementation phase of firm level net zero commitments while 27% mentioned that they have already implemented it. 

However, there is a certain obscurity related to how the treasury team will be participating in this movement. Will they be implementing a Sustainable supply chain, ESG linked bank lending/bonds, ESG based investments or even sustainable deposits with banking partners? Our survey suggests that the majority of treasurers are currently evaluating these options and opportunities to drive firm level sustainability goals. 

About the survey

EuroFinance’s 2022 Global Treasury Survey reflects the views of 135 treasury department respondents contacted by EuroFinance’s global network from March through August 2022. Majority of the respondents are based in Europe and Americas, across 12 industries and in companies with median annual revenue of up to $2 billion.

 

Do you want the EuroFinance to curate a specialised survey for your company or treasury product? Contact us at [email protected]