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Transcending, Not Just Transforming: The Outlook for 2016

  • By Craig Martin
  • Published: 12/22/2015

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crystalballerAs I was thinking about what I would say regarding the outlook for treasury and finance for 2016, I actually got quite depressed. Why is that, you may ask? Just look around the world today and it is hard not to be.

The geopolitical unrest and conflicts in so many regions of the world are staggering, and the hope for resolutions is nearly non-existent. And as a resident of Baltimore, Maryland, where our murder rate just surpassed 300 in a year for the first time since the 1990s, it’s no wonder I feel the way I do.

That was until November 3, when my second grandson was born—healthy and seemingly with everything intact! If you’ve ever experienced it, childbirth is nothing short of miraculous. So I do have hope in the world, that our generation is not done battling the dangers of the world while promoting the good things—nor is the next generation, nor the next. As the great existential philosopher, Jean-Paul Sartre, said, “We are our choices.” Sartre was a doer; loosely translated he said, “To do is to be,” as opposed to Albert Camus who espoused “to be is to do.”

I don’t think you can just be.

I am reading a new book entitled “Superpower” by Ian Bremmer, one of the speakers at AFP’s annual conference that just took place in Denver. It is about the choice America and Americans must make as to what kind of country we are to be. And simply being is not a choice. America and its citizens need to transcend today’s difficult, global geopolitical situations, not just transform them.

And I suggest that is the same for the global corporate treasury and finance professionals who are AFP’s members. It’s not good enough to be satisfied with just being global. It’s not good enough to lead global treasury and finance transformations. The finance leaders of tomorrow will have to find ways to transcend the issues they face today and will face in the future.

All of the above was written before the Paris terrorist attacks, which depressed me again, perhaps to the point of feeling hopeless. However, this event does not change the basic theme of my outlook, which is to transcend. In fact, perhaps it even reinforces it. These extreme geopolitical risks will manifest themselves as financial risks.

So to some degree I am not sure 2016 will look a lot different than 2015, except it is probably safe to say that the kind of attacks just experienced in Paris will become more frequent and more broad-based. And those types of shocks to the ecosystem of the world will most certainly produce financial shocks as well, some more severe than others.

So what does that mean for treasury and finance professionals? It means that more than ever, they have to be prepared to handle those shocks, to be able to react quickly, to be flexible, and to adapt to the rapidly changing environment they will find themselves in. In a word, they will need to transcend the everyday and look forward.

Treasury and finance professionals will need to respond to cyberthreats and even breaches, so a top priority should be to build a cyberrisk preparedness and response plan. They will need to adapt to the rapidly changing payments landscape with all the new disruptive technologies like blockchain. They will need to continue to adapt to the evolving regulatory landscape. If you think AML and KYC were onerous before, after Paris, think again. This also applies to the banking environment as we’ve seen the beginning of major changes at large financial institutions, which is no doubt a precursor to many more to come.

And finally as mentioned at the very beginning, finance professionals will need to be prepared for, react to, adapt to, and transcend the financial shocks to the system that will most certainly come as a result of geopolitical shocks.

Craig Martin is Executive Director of AFP’s Corporate Treasurers Council.

This article appears in the December edition of AFP Exchange.

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