16-12-2019 09:00

What skill sets will be critical in the treasury of the future?

As digitalisation progresses and the financial landscape evolves, treasury teams face rapidly changing demands. Employees will require an increasingly diverse range of skills to succeed and thrive — and to ensure the treasury’s future relevance.

The demands placed on corporate treasuries are always evolving, but the last few years have seen the pace of change accelerating. Digitalisation is transforming business models in nearly every sector. We’re also seeing a global shift towards instant payments across borders. At the same time, open banking APIs are creating new possibilities and fundamentally changing the rules of finance.

Although these changes bring exciting opportunities, it can be difficult for treasuries to navigate such unknown territories. And their resources are shrinking. Even large enterprises are streamlining their headcounts — many now operate with only a handful of employees in the treasury. How can treasuries do more with less, while constantly adapting to new demands?

Over a third (34%) of treasuries said that adding new skills through training or recruitment will help to ensure their future strategic relevance‍.

Nordea Future Treasury Report (i)

The answer lies in having a diverse set of skills. To operate efficiently, treasuries need to support and empower existing employees to grow into their changing roles. They also need to change what they’re looking for in new recruits. Here are just a few of the qualities that will be critical in treasury teams of the future.

1. Adaptability to new technologies

Technology is going to play a fundamental role in future treasuries, from enabling strategic insights to streamlining daily operations. And that means employees need to be tech-savvy. Existing employees should be trained on digital technologies like artificial intelligence (AI), robotic process automation (RPA) and data analytics, and encouraged to try out new software and tools. Treasuries should also look for these skills when recruiting new employees. These innovations will soon play a key role in everything from routine tasks like reporting and reconciliation, to strategic areas like risk forecasting.

36% of treasuries have identified treasury reporting as an area for digitalisation in the long-term.

Nordea Treasury KPIs Report 2019 (ii)

This doesn’t mean treasuries need their employees to be IT experts on any particular software or system. Technology won’t stand still — as soon as staff come to grips with a system there’s likely to be a better version out there. So it’s more important to offer ongoing training that builds employees’ confidence with technology and IT skills in general. And when recruiting new employees, look for those with an adaptable, inquisitive nature who are constantly thinking of new ways to apply technology to the treasury’s problems.

2. Strategic business understanding

Our Future Treasury report shows that by 2025, most Nordic treasuries hope to be seen as a strategic partner by their business.iii But if they’re going to succeed, they need to shift the long-standing perception of the treasury as a standalone function. They can’t afford to operate in a bubble or isolate themselves from broader business conversations. Treasury employees must be ready to take a seat at the C-Suite table and make their voices heard on big picture, strategic issues.

That’s why many treasuries are now trying to give their employees more exposure to the rest of the business. This can be achieved through job shadowing, internal training, and getting staff into strategic meetings — even if it’s just to listen in. When recruiting new employees, it can pay to consider candidates with a broad business understanding, rather than those with a narrow or highly specialised focus. People who’ve worked in a variety of roles prior to joining the treasury can bring useful strategic knowledge to the table.

3. Communication and relationship building

Our recent research on treasury KPIs found that almost two thirds of treasuries are failing to actively measure stakeholder feedback.iv. The treasury can’t align itself with the business if it’s not listening to it. That’s why it makes sense to train employees on communication, networking and leadership — empowering them to build working relationships with a diverse range of stakeholders.

Just over a third (35%) of treasuries actively measure stakeholder satisfaction.

Nordea Treasury KPIs Report 2019 (v)

Having employees with strong communication skills will also be vital as the ecosystem grows outside of the business itself. Harnessing new technology is going to mean forming external partnerships, so treasuries will need to work closely with banks, fintechs and service providers. Forward-looking companies will constantly be looking for ways to leverage the latest tools, and treasury employees should be helping to drive this conversation.

4. Cybersecurity threat awareness

Earlier this year, it was estimated that the global cost of cybercrime will be in excess of $6 trillion annually by 2021 — up from $3 trillion in 2015.vi

Treasuries are often the target of highly sophisticated phishing scams, including business email compromise (BEC) fraud. And we’re not talking about obviously fraudulent, misspelled emails from “long lost relatives” asking for money. Attackers invest significant time in researching their targets and the senior executive they’re trying to impersonate. They might send an email pretending to be the CFO or a partner or supplier, often from a legitimate looking email address. Some attackers have even used deep-fake technology to create audio recordings and impersonate the voices of senior employees on the phone.vii

That’s why it’s increasingly important that treasury employees have a robust understanding of cybersecurity best practices. That requires more than completing a one-off training module — they need to be kept informed of the latest threats, which are constantly evolving. Treasury staff also need to be hyper-vigilant and ready to raise the alarm if they see anything suspicious — and, in some cases, they’ll need the courage to push back on requests from peers or seniors.

5. Creativity and agility

The tide of digitalisation is unstoppable and it’s already reshaping the treasury’s role in modern businesses. Soon, even the most fundamental goals of treasuries could change. Liquidity, funding and FX management were the biggest KPIs for treasuries in 2019. But over the next five years, the focus of the treasury could begin shifting towards completely different ones, as these tasks are increasingly automated.

The most common KPIs for treasuries in 2019 were liquidity (83%), FX risk management (76%) and funding (75%).

Nordea Treasury KPIs Report 2019 (viii)

It’s possible that the treasury will see its remit broaden to support new business imperatives. For example, most of the treasuries we surveyed in 2019 didn’t yet have KPIs for corporate and social responsibility (CSR) or green initiatives. But CSR continues to move up the corporate agenda. Treasury employees will need the creativity and agility to pursue new objectives and add value in these new areas.

That might all sound daunting, but it also means that work in the treasury could be more creative and fulfilling in the years ahead. Not only does this present exciting opportunities for current treasury staff and their professional development, it could also help to attract new generations of employees. The future of finance is exciting — as long as treasuries are prepared to adapt and evolve.

For more information write to txbmarketengagement [at] nordea.com (.)

Cash management