Treasury function poised for digital upgrade and more strategic remit

Corporate treasury is set for significant changes in the coming years, according to a report from banking group Citi and consultancy firm Zanders, which lays out a vision for how the function can re-shape its value-added to meet mounting expectations and opportunities.

Treasury is a challenging role in any company. Treasurers are responsible for managing financial resources, which includes focusing on optimizing cash flow, minimizing financial risks, and ensuring the company has sufficient funds to meet its obligations and invest for future growth.

In a survey conducted by Citi and Zanders, 93% of respondents agreed that the treasury function is going to become materially more advanced in the coming three to five years. But more than half of those (52%) said that there is general uncertainty about what the future may look like.

What is clear is that technology will be a major catalyst for change going forward. AI-powered tools will streamline routine tasks, allowing treasurers to focus on strategic initiatives, though human oversight on AI will remain crucial.

The future of treasury involves a shift towards real-time operations, which means greater insight while grooming flexibility and agility. 

The report by Citi and Zanders further suggests that the treasury function will in the coming years gain in prominence as a strategic partner to the CFO and CRO, bridging the gap between finance strategy and financial risk management – while enabling the broader business strategy goals.

“Treasurers perform a challenging role. They ensure the company has adequate liquidity, minimize financial risks, and contain net financing costs so they do not materially impact cash flow. They have the vital mission of supporting the CFO in capital strategy,” said Shahmir Khaliq, a leader at Citi.

“Treasurers should therefore be part of key decision-making processes, contributing to analyses of risk versus returns. The outcome is better financial results for any given risk profile.”

The five P’s

In order for treasury to be successful going forward, there are a few areas that need to be prioritized, which the authors of the report have dubbed the four P’s:

Position
Treasury must reassess their role beyond risk management to enabling business growth. Treasurers should position themselves as advocates for change that helps drive revenue and overall enterprise value.

People
Talent will remain essential in the treasury function, particularly in strategic decision-making, risk management, and oversight of AI-powered processes. As technology advances, treasurers will increasingly collaborate with cross-functional teams, adopting a more integrated approach to optimize financial performance and drive business growth.

Process
Treasury processes will evolve to become more efficient and automated. Existing processes will accelerate, and friction points will be reduced through the use of new technologies. This will help treasurers focus on more strategic initiatives and make data-driven decisions.

Platform
A robust platform is essential for future-proofing treasury operations. This platform should be designed to support evolving needs, like real-time data processing and AI-driven insights. Strategic partnerships with technology providers will be crucial to ensure that the platform remains agile and adaptable.

Partnerships
The report also notes Partnerships. Treasury teams will need to build strong partnerships with internal and external stakeholders in order to realize their full potential. This includes collaborating with adjacent functions, developing talent, and investing in technology. What’s more, partnerships with technology providers and banks are an important part of enabling real-time treasury operations, process automation, and advanced analytics.

The journey

Looking ahead, lead author Khaliq said that for treasury teams, a lot can, and likely will, change between now and 2030. “The road to 2030 is filled with opportunity for those that boldly embrace the challenge. It will require novel ways of thinking, modern technologies, and close partnership.”

“To manage real-time cash flows and optimize liquidity, treasury will require novel ways of thinking and modern technologies. This will enable treasury to shift from reactive processes to proactive, predictive strategies. Being key in demonstrating value to the success of the business, treasury will need to become involved earlier in strategic decision-making, ensuring better financial outcomes with the right balanced risk profile.”

“And as treasury takes on an expanded role within the organization, businesses will be better equipped to meet the goals and objectives they have set for themselves.”