Another successful AFP Annual Conference has come and gone. Like the 6,000 conference attendees, my focus now shifts to the outlook and prospects for the treasury industry of the coming year. Based on my discussions with treasury professionals at Annual Conference, at the CTC Roundtables, and in my daily interaction with members, there are three key themes developing that I foresee could have some impact on the industry for the coming year:
1. Increased standardization.Treasury groups are seeking to streamline bank account management (BAM) documentation as part of the account opening process. Streamlining BAM flows into setting and establishing broad eBAM standards for industry adoption as well. Along with this theme, utilization of the new AFP Global Service Codes in bank relationship management will continue to evolve as large bank players embrace and adopt the standard.
2. Increase scrutiny of short term investment options.Earnings Credit Rates have come under pressure recently and with the repeal of Reg Q, the interest offered on checking accounts isn’t compelling enough for companies to switch relative to other investment options. With the expiration of unlimited FDIC Insurance for non-interest earning accounts effective December 31, 2012, and as interest rates are expected to remain low into 2013, investment options and investment policies for growing cash balances will get some additional review.
3. Continued globalization. Treasury departments will continue to develop as their underlying businesses develop and expand to where the growth opportunities are. With this come new opportunities and challenges for treasury departments around cash pooling structures, FX hedging, and mergers and acquisitions. Treasury technology is sure to play a key role in linking many of those areas together and to maintain internal compliance to regulations.