Business software and information technology services provider SunGard has identified key trends that are influencing how corporate chief financial officers, treasurers and other finance executives operate their treasury departments and manage liquidity.
“In order to capitalise on the changes that we’ve seen in our industry, corporations are discovering new ways to harness technology to increase their visibility to cash and to better manage the risks that have become more prevalent, such as foreign exchange, credit, interest rate and commodity risk,” said Paul Bramwell, senior vice-president of treasury solutions at SunGard’s corporate liquidity business.
According to SunGard, corporations are striving to attain a holistic view of risk and are increasingly modelling multiple risk types such as foreign exchange, credit, market, interest rate and commodity. The greater availability and adoption of payment networks and exchanges can also affect how a CFO manages his department.
In addition, the firm says that treasurers are looking to improve working capital through improved credit risk analysis and collections automation strategies to reduce borrowing margins. Corporations are looking to streamline and consolidate their payment flows and there will be a continued movement towards outsourcing transaction treasury functions.
“Corporations are finding better ways to work with their bank and trading partners by improving transparency to the financial supply chain and streamlining messaging and communications,” said Bramwell. “They are also increasing deployment of treasury technology in private cloud environments, helping them to realise greater efficiencies and reduce information technology costs.”
SunGard believes that more corporations are turning to consolidated technology hubs for multi-bank connectivity, including embedded services such as electronic bank account management (eBam) and managed connectivity to the Swift (Society for Worldwide Interbank Financial Telecommunication) network. Furthermore, corporations in Asia, the Middle East and South Africa are centralising their treasury operations to improve transparency and efficiency.
The firm also highlighted that many corporations are beginning to learn about cloud services and security and therefore choosing to deploy their treasury technology in private cloud hosted environments. At the same time, treasurers are seeking up-to-date and enterprise-wide views of foreign exchange and interest rate risk positions with real-time debt and investment reporting.