Deloitte’s 2024 Global Corporate Treasury Survey found that while many key issues related to liquidity management, FX and cash flow forecasting remain consistent, some new and emerging trends related to counterparty/bank risk management, Generative AI, treasury tech, and outsourcing.
Consistent with Deloitte’s previous surveys, the top priority set by CFOs for their treasury departments is to focus on enhancing liquidity risk management. The firm said that recent events, coupled with volatile interest rates in many parts of the world, have intensified the spotlight on liquidity by corporate finance executives. In the post pandemic environment, with many companies continuing to support a hybrid work environment, the focus on enhancing governance and control over operations has continued to rise in overall importance.
However, GenAI has generated significant excitement within the treasury and finance transformation space. Those surveyed identified the most popular use cases within treasury to be cash flow forecasting, cash positioning, and FX and interest rate management.
That said, few companies have fully developed and realised the benefits of mature GenAI capabilities; most companies are currently in the use case identification or solution definition stages. Only 1% of treasury functions from large organisations (those with revenue of $50bn+) are using and realising benefits from GenAI.
For treasury functions adopting GenAI, it will also be critical to establish risk approaches to mitigate risks
“Generative AI is swiftly gaining traction, offering a potentially significant impact for treasury and finance transformation,” said Niklas Bergentoft, a principal and treasury transformation and technology leader at Deloitte. “Most treasury functions are in the early stages of GenAI adoption, with many exploring use cases focused on enhancing cash flow forecasting, cash positioning, and FX and interest rate management.”
Bergentoft added that despite the identification of use cases, corporate treasurers face a number of challenges in implementing generative AI, including scarcity of specialised talent, dependable data sources, infrastructure limitations, and risks related to handling sensitive financial information. “For treasury functions adopting GenAI, it will also be critical to establish risk approaches to mitigate risks – such as data accuracy and model integrity – and maximise the advantages of these tools for cash and liquidity management,” he said.
Outsourcing is also proving to be of great interest to treasurers, particularly in areas such as treasury technology and tactical day-to-day activities like bank administration, treasury payments and operations.
“Even treasury professionals from larger organisations, which typically have more substantial in-house talent bases, are looking at outsourcing these types of activities, to potentially increase their bandwidths to focus on more strategic treasury initiatives, bring in depth of expertise, improve operations, and reduce costs,” said Prashant Patri, a principal specialising in treasury transformation at Deloitte.
But Patri added that not every part of treasury is likely to be outsourced. “On the whole, higher risk and more strategic treasury activities – including investment and debt management, cash positioning, FX and interest rate risk management, and cash flow forecasting – are still largely executed by in-house treasury teams as they continued to be viewed as key strategic components of the CFO organisation.”
The full report can be found here.
Philip Smith is editor of The Treasurer
