As treasurers across Europe and the UK start to return to the office, Instimatch Global sees some new ways of working that are likely to remain beyond the pandemic’s eventual end point. While market conditions are driving some of these changes, others are more behavioural making it more likely these will lead to an evolution in treasury strategy and operations.

Here is what we expect will stick:

The search for yield driving the need for new counterparties

With more and more banks going directly to central banks to take advantage of cheap government funding, rates have come down even further. These conditions leave corporates working harder to find yield and they have woken up to the need to diversify beyond their standard bank counterparties and jurisdictions to see where they can increase returns in the short term.

Living with opaque cash forecasting  

Cash forecasting and accounting for FX risk will remain difficult, as businesses are hit by hard-to-predict aftershocks and market changes. So, the ability to move quickly to borrow or lend short term cash needs or balances will be vital, and this drives treasurers to increase counterparty diversity.

Treasurers going digital for speed and reliability

Some treasurers say they find it challenging to find prices from banks now, as a result of everyone working from home. Either they cannot reach their contact person or it is more difficult to receive an updated deposit rate. The crisis and working from home is dislocating the money markets sales function, with corporate treasurers using digital platforms to go direct to bank treasuries.

Treasurers are trying out new things 

Following the forced changes everyone has made this year, treasurers have upped their tech game and more are open to experimenting. Perceived barriers to onboarding new solutions such as KYC and AML are now seen as less of an obstacle, as treasurers have become more open to try technology that streamlines manual activities.

More active liquidity management shifts earlier in the day

Liquidity management is part of what’s been called the morning treasurer’s role, before strategic work takes the focus later on. Working from home, together with uncertain market stresses, has tended to push liquidity management and funding earlier in the day.

Treasurers are synchronising their workflow tools

Treasurer’s desktops have seen major changes in recent years due to the onboarding of various technologies that help to manage daily tasks. While these equip treasury teams with better data, treasurers are now experimenting with fixes and seeking IT help to ensure all their tools and tech work together and link properly to legacy systems.

Remote treasurers are interacting differently with their teams

Treasurers have got used to managing their teams remotely, with some new working practices. This is accelerating a shift to automation and digitisation, as this allows treasurers to delegate while keeping control – replicating treasury trading room live discussions and chat. Partners to corporate and banking treasurers are now therefore meeting clients’ needs in new ways, with remote accessible support becoming a service differentiator.

This year has brought a pace of change never seen before. While challenging market conditions may remain so too will the new ways of sourcing liquidity and handling cash management for treasurers who are willing to embrace the new solutions available.