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2015 Outlook: Welcome to Treasury in the Digital Age

  • By Craig Martin, Executive Director, Corporate Treasurers Council
  • Published: 12/30/2014
As 2014 draws to a close, and we look back at the 10th annual Executive Institute at the AFP Annual Conference, the common thread that ran through the discussions was about global interconnectivity and the geopolitical and economic trends that affect us all. This was also a focus of discussion at the most recent quarterly Corporate Treasurers Council roundtables held in September, and even at the CTC Corporate Treasurers Forum held in June.

The question being asked is how does everything in the world affect the future? Even though we are more than five years removed from the financial crisis, because of its severity people are still very leery about the next big event. And there are some major structural changes taking place that are reshaping global economies and financial markets, such as slowing global economic growth, an aging of the population, and a rise of a middle class in emerging markets.

So what does all this mean for treasury and finance professionals? It means, as one treasurer of a major global company said to me years ago (and it is still apropos), “All I know is that growth in my company will be global, and so the question is whether the treasury and finance teams are prepared to support that growth.” And part of the answer to that question lies in the use of new technologies to connect all the dots, to be interconnected. This so happens to be the theme for the 11th annual CTC Forum taking place in Chicago again in May 2015: Treasury in the Digital Age.

Cyberrisk challenges

So aside from the broad theme of technology, looking forward into 2015 and beyond the other major themes seem to be cybersecurity at the No. 1 slot, followed by compliance with global regulations, capital structure and the deployment of capital, investments and, finally but just as important, attracting, developing and retaining talent. As it pertains to the finance function, the question about cybersecurity centers around managing cyberrisks associated with payment processing, liquidity management, supply chain, and with the use of outsourced services, treasury management systems in the cloud.

Everyone is struggling with the myriad regulations across the globe from FCPA, FATCA, FBAR, Dodd-Frank, EMIR, the banks’ KYC processes, etc. How does one go about tracking all these and ensuring compliance with them all? What is the governance structure in place to accomplish that? Once again, technology can play a role in managing that process.

With all the cash on companies’ balance sheets combined with extremely low interest rates, activist investors are taking a much harder look at how companies are investing that cash (or not) and what is the best way to return value to the shareholders. During a panel of four CFOs at the just-concluded MIT Sloan CFO Summit, this topic was discussed and all of the panelists agreed that if you’re buying back stock, then you’re not doing the best you can with the funds on hand. And as they said that is why you are seeing quite a lot of M&A activity. That potentially is certainly a better way to create value for the company and the investor.

Yet at the end of the day, none of this is possible without a strong finance and treasury team. AFP and the CTC have begun to delve into this important issue over the past year or so with a series of leadership articles where treasurers have told their stories about how they lead and develop their organizations. There is a very valuable CTC Guide on this topic as well. And besides the career development track at AFP’s annual conference, there are other sessions at the CTC Forum, Executive Institute as well as webinars throughout the year.

So avail yourself of this valuable information on this most important topic as we head into 2015 and beyond. It is a complex and interconnected world and the best way to address all that the world will throw at us in the future is to have the best team possible working side-by-side.

This article appears in the December edition of AFP Exchange.
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