Seeking to emerge stronger from the Covid-19 pandemic, many organisations are looking to revamp their treasury functions to be nimbler and more aligned with their respective corporate strategies.

“For several years we have been saying that treasurers need to become more strategic within their respective organisations and have a seat at the table to make strategic decisions,” says Claudia Villasis-Wallraff, Head of Treasury Advisory, Asia-Pacific, at Deutsche Bank.

On this treasury transformation journey, Villasis-Wallraff stresses the need to break down silos between different departments and the value of better coordination in spotting potential risks.

“The progressive companies these days are the ones aiming to break corporate silos”
Claudia Villasis-Wallraff, Head of Treasury Advisory, Asia-Pacific, Deutsche Bank

“The progressive companies these days are the ones aiming to break corporate silos. Treasurers that weren’t performing this strategic role in the past have been encouraged to do so, while other functions of a company such as procurement realise the importance of active participation by the treasury department,” she explains. “What we are seeing now is that the treasurer is taking the role as a custodian of cash and whoever wants to expend any cash, such as the corporate finance department or procurement team, needs to speak to the treasurer to make it an efficient process.”

In many of these transformation projects, technology will play an increasingly important role, particularly in facilitating communication between different departments. “There are many fintechs today that are working on bringing full value chains together and creating ecosystems. Treasurers cannot manage exposures that they don’t know about and working with areas such as procurement can fill that information gap,” says Villasis-Wallraff.

While treasurers have always turned to technology for help to eliminate inefficiencies, it wasn’t until the pandemic that treasury functions started to rapidly consider significant upgrades to their workflows to address such issues.

“Due to the pandemic, some treasurers realised how much they needed to catch up in terms of technology and optimisation of their processes. These are the things they should have done after the global financial crisis,” she notes.

One area where treasury functions can contribute a lot to an organisation is making better use of internal information to predict future scenarios and prepare for volatility.

“Data now is the new gold. It takes time to analyse that information and we are seeing a lot of software coming up that makes processes and decision-making in a corporate more transparent,” observes Villasis-Wallraff. “If a treasurer has access to purchase orders in real-time, they will better understand what exposure is going to come. They can better use internal intelligence to predict where money is going to be needed in the future.”

From cash visibility to cash predictability, treasurers are slowly pivoting to machine-learning tools to better calculate the optimum cash position.

“Real-time information is becoming a reality. Sophisticated clients are slowly adopting it. The concept of value of money will also change with this as you will have to care about intraday liquidity, which was not possible with the old technology a decade ago,” she says.

Understanding the need for treasurers to become more strategic in their respective organisations, progressive banks such as Deutsche Bank are keen to assist. Specifically, they are customising their internal technology stack to be embedded with their clients.

“We are working as a bank on getting connected to the client and really creating interfaces with their enterprise resource planning (ERP) systems to solve for inefficient workflows. This is how banks are going to work in the future with corporates,” Villasis-Wallraff says, adding that there are surprisingly many corporates that are still talking on the phone to connect with their banking partner.

Going forward, she is confident that many treasurers will step up to the plate and look for ways to interact with the procurement and sales teams of their respective organisations in partnership with their banks.

“Whenever you see a survey in treasury, everybody answers that their pain point number one is having a sound cash flow forecast. Showing an accurate cash flow forecast requires investment in technology and in data transparency,” notes Villasis-Wallraff.

If being strategic is the goal of the treasury function, treasurers need to harness the power of technology to break down nagging corporate silos.

Note: this article was first published in The Asset magazine on 7 September 2022

To access Part 1 of interview with Claudia Villassis-Wallraff, ‘Enabling corporate treasurers to be strategic’, please click on the thumbnail to view it.

To access part 2, ‘Harnessing technology tools to transform treasury processes’, please click on the thumbnail to view it.