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Articles

Keys to Operating Regional Treasury Centers

  • By Andrew Deichler
  • Published: 11/1/2018


Nick Powell, global head of commercialization, liquidity and investment products for HSBC, provides some best practices for treasury departments that are considering opening a regional treasury center.

THE ROLE OF REGIONAL TREASURY CENTERS

According to Powell, regional treasury centers have a role to play on every level of the supply chain, and every level of the organization’s working capital cycle. “Whether that is managing supplier payments, tax payments, employee salary payments, collections from customers, or managing overall liquidity positions, bank relationships, investment decisions, or debt—all of the aspects of the business that have a financial nature associated them—the regional treasury center plays an important role in driving those activities and ensuring that they are delivered in the most efficient and effective manor,” he said.


For more insights, be sure to download AFP's new Executive Guide, Operating Regional Treasury Centers, underwritten by Thomson Reuters, here.


Operating a regional treasury center is a costly undertaking, but it can be a great advantage for a company that is expanding into a new region. Companies can derive a lot of value by centralizing treasury activities in the region itself. However, if the company isn’t planning on growing its business in that region further, it may not be worth opening a regional treasury center in that market.

Selecting a Location

There are many factors that go into the decision-making process of selecting a location for a regional treasury center, Powell explained. “Of course, there are economic and political factors; nobody wants to house a regional treasury center in a location that has suffered from political instability or a location where regulatory regimes tend to change a lot,” he said.

However, the “bigger picture,” Powell stressed, is that there needs to be an appropriate amount of human capital to staff the center. “It is important that regional treasury centers attract an abundance of talent with a broad range of skills,” he said. “In order to do that, one of the key factors is choosing a location that is attractive for people to live in. So it just goes beyond some of the financial aspects that we might think about with regional treasury centers.”

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