EuroFinance

The role of the treasurer is evolving to become far more strategic in nature.

Today, they need to manage strategic risk flowing from the evolution of business models, including the rapid growth in ecommerce and online channels together with the emergence of a data driven, more automated ‘real-time’ treasury.

The key to treasury excelling in this strategic role and supporting the business in the digital and real-time age is having easy access to the right tools and insights, helping treasurers to manage their cash and risk responsibilities in faster and simpler ways.

Enhancing risk management

Treasury management has always had risk management at its core, and there is even more focus on this important area now treasury is becoming more of a strategic partner to the business. Company-wide decisions on where to set-up operations or grow an existing presence increasingly hinge on the insights from treasury, with expectations from senior management for timely insights.

We have developed solutions that enable treasurers to forecast and execute their risk management strategies faster and more flexibly.

Long-term FX forecasting

Having access to the right data helps inform decisions. For instance, accurate long-term FX forecasting giving a five-10 year market view can assist a company’s ambitions to enter new markets as returns are often only earned over prolonged periods.

As companies plan longer term budgets, growth projections and investment strategies for new markets, an accurate set of long-term FX forecasts allow treasury to flag issues, enabling smarter decisions around hedging and investment policies. At Standard Chartered, we use a quantitative approach, measuring long-term economic performance with variables including real GDP growth differentials, real wealth per capita, and government consumption.

Algorithmic FX trading

When it comes to risk trading, FX algorithmic execution (“algo”) is increasingly popular with corporates. This offers enhanced execution of the treasury risk management policy, particularly for very large FX payments such as a dividend hedge or an M&A transaction. With access to a variety of different liquidity pools in the market, algorithmic execution enables a large transaction to be broken into many smaller slices and executed in a way that ensures market discretion, reduced market impact and minimises negative cost pressures from excessive currency demand.

From an audit perspective, corporates can demonstrate the trade is a fair reflection of the market at the time, as algos offer full transparency over the execution process, listing and benchmarking every single trade that has been carried out.

Driving Treasury innovation and efficiency

As the pace of business increases and e-commerce and online models are adopted across many industries and geographies, treasurers increasingly face real-time demands on cash and payments management. The growth in cross-border commerce and market coverage is also driving treasurers to look for ways to execute cross-border transactions more easily.

A detailed understanding of our customers’ businesses, combined with our knowledge of technologies such as APIs and robotics, enables us to work closely with clients to design innovative solutions that equip treasurers for a more real-time world.

Real-time liquidity monitoring

Real-time monitoring of large balance movements is important to many treasurers. However, the constraints of traditional bank statements which are typically delivered on a daily basis to treasurers is a real roadblock. As a result, many treasurers are forced to log on to multiple proprietary internet banking platforms to see their positions.

We’ve developed an alternative solution that provides instant payment and debit status notifications via API to the treasury management systems or accounts receivable systems. The real-time rich payment notification API includes full details of the transaction instantly.

Real-time liquidity management

With the increasing adoption of real-time business models, treasurers need to not only see but manage their liquidity positions across all their banks at any time. Our multi-bank direct debit cash concentration capability allows clients to automate cash concentration and use a single electronic banking platform across multiple banks. As Direct Debit schemes around the world are becoming increasingly real-time, this solution has shown the potential to provide treasurers with real-time sweeping on a 24/7 basis.

Digitised documentation

Key challenges highlighted by large multinational clients particularly relate to applying for approval and settling FX for exports and imports, with the process sometimes taking twice as long to complete as the actual shipment of goods.

In response to this the bank developed FlowBanker, an end to end solution that harnesses both our online trade and FX platforms to streamline the client experience. Using robotics in the background to read documentation, the platform’s automation can rapidly speed up the verification process relating to import and export documents, from two weeks to a few hours in some cases.

The audit trail functionality of FlowBanker is essential, enabling corporates to track invoices and create easily stored documentation that can be retrieved whenever required.

Demonstrating added value

As treasurers take on a more strategic role with business as it rapidly evolves in response to market demands, they need to work smarter and faster. Banks can help by helping treasurers tackle challenges by automating processes, speeding up access to information, and enabling a ‘real-time’ mode.