Treasury in the new “normal”… the day after


Back to the office


And now what am I going to change? It is quite legitimate to ask the question: "After such a huge financial crisis, what will become my treasury department?" In all magazines or newspapers, journalists get us drunk with this post-containment story. The next world would not be the same. That would be the end of the world as we knew it. Everything would change radically to read them. So, I wonder what will change for the treasurers. Everything and nothing. I think it is up to everyone to be the actor of changes. Change is always, without exception, necessary and beneficial after a crisis, even if we are not responsible for it. The idea is to ask: what could have been done better to be more resilient, more efficient, better in supporting operations, to be more “liquid”, more alert, more agile, etc.? Not rethinking yourself and the organization would be pure madness. The first thing is to decide to act and draw the lines of this change of organization. You will think that of course C-level support is a prerequisite. It may be thought it will be supportive given the exceptional circumstances. Each treasurer must think how to "sell" how treasury could have done better and how to strengthen the structure in future. I am not talking about commitment(s), but rather organization in the broadest sense. Who could dare to claim the treasury organization was so good that nothing needs to be improved? All treasurers I talked to have plenty ideas to make things more efficient.


The second step, once the outlines of the new organization have been drawn, will require to precisely define the implementation, phase by phase, tool by tool. Failures can be diverse: for example, lack of committed lines of credit, lack of diversification of funding sources, lack of automation in some processes, non-systematic application of hedging policies, inability to produce ad hoc reports other than XL, slowness in reacting and producing pieces of information required by C-level, absence of simulation tools to extrapolate cash-flow forecasts, etc. The list is too long to be disclosed.



Embracing a new reality


It seems foolish to imagine treasury will swiftly return to normal life, as it was before lockdown. There is a lot of headroom, regardless of organization, for improvements here and there, in the treasury structures and in the way they work. Here we have a wonderful opportunity to push for change for the good cause. The treasurer can become the "partner" of the business that he should be and even often help the operations. Its role should be more dynamic and proactive than it was. Certainly, it is time for cost cutting everywhere. But where the investment is needed, it will be made. Let's take advantage of the current momentum to impose our new ideas and projects. It is also true that the economic environment, assuming a return to normality of the business, remains complicated with negative interest rates, increased FX volatility, heavily extended payment times and weakened companies/clients or suppliers. The context is far from rosy.

It seems certain that "homeworking" is more necessary without being total because in treasury everything cannot be done in isolation and from home in the medium term. The efficiency gain of this new type of work will be erased by the loss of team coordination and the fluidity of the more required general exchange of information. For back-ups too, work from home is not ideal and should not lead to job silos. Communication remains key. There will be more work for the “heads of” for the team coordination, for sure. Committing to keeping the teams unchanged will already be a challenge. On the other hand, we must invest in IT because digitization is the answer to this crisis. "Change is now!" More appropriate reports and customized dashboards at the CFO must be revisited. This necessary change is certainly exciting, but it is a vast project, which some have not yet begun. When we talk about change, I do not consider the revolution but the adjustment to the new situation. You have had your ears scratched with the notion of agility. But isn't it true that this flexibility allows us to adjust and make a difference? Treasury must provide more support to operations (e.g. New e-payments and payment methods available, FX hedging automation, dynamic discounting, shorter supply finance chain, dematerialization of trade finance doc's, etc.), but also more "support" to top management for more efficient decision-making. Retroactive and past reporting is too slow and there needs to be immediate access to key data.


If you also need to reduce the size of the teams, then digitization is even more inevitable. The post-crisis treasurer will have to assist with operations, which is in trouble at this time. It will play more of a partner in the midst of operations. Productivity is the primary objective; it seems to me.


« Long is the road… »

It will be a continuation for those already well engaged on the road of digital transformation of treasury and a launch for others. Whoever does not change his/her existing organization would demonstrate a dismaying passivity and would sign the end of department in the short term. I don't know if the world of treasury will be completely different or not, but it will have to change a little time.


We don't know what tomorrow will be made of. But we know that it will be made from a minimum of beneficial change to our strongest resilience. This change, as in 2008, will be an opportunity to further establish the role of treasurer. He/she has the wind in his/her sails and must take advantage of it to reposition him/herself deftly. Remote work is great I recognize but it requires more rigor and sharing of the same source of information and therefore more robust tools. Coordination is even more important and individualism, characteristic of the spreadsheet, should be banned to ensure full transparency and efficiency. Projects will have to find their “committed” sponsor (e.g. working capital) and subsidies for investments in IT tools and other API’s. We are asked to do a kind of introspection, to do "mini audits" of the treasury (third parties can help) and how to generate value for the rest of the company. I am convinced that Open Banking, A.I. solutions and robotics as well as fintech's will help this project. But to do so, one must avoid Peter Pan syndrome and the desire not to grow or change. I am surprised to hear from treasury peers who do not plan to change anything in their organization. I admire their self-confidence or envy their credulity.

What will change after the lockdown for treasury?

  • More homeworking requiring more coordination from heads of

  • Smaller teams with more recourse to outsourcing and external independent consultant/interim consultant

  • Outsourcing of payment factories via third party to avoid Swift CSP constraints and new API’s given OpenBanking (PSD2)

  • New IT solutions to further automate processes

  • Less XL and more R studio or RPA’s

  • New skills for new employees (computer savvy, generic IT knowledge)

  • Review of credit facilities and funding more diversification

  • Dedicated tools for FX hedging, forecasting and WorkCap mgt

  • Recourse to dynamic discounting, hedging, …

  • Revamping of reporting and dashboarding to C-level

Treasuries have again an opportunity to cease. They need more adaptability. If done properly, this change will determine their repositioning and help the company to recover. Good managers are those who learn from experience and (re-)build and re-shape the future to prevent problems. Doing nothing after such a shock would be like listening to a lesson without trying to apply content in real life. Transform the situation into a professional opportunity. Life is changing, isn’t it? It is a challenge they should love to face.