Treasury Structure in a Changing
Banking Environment

So much has changed in treasury in the last decade. The banking landscape continues to shift significantly and while volatility and risks remain front of mind, this time offers tremendous promise and opportunity for treasurers who are willing to reconsider and reform their structures.

Key takeaways

  • Regulatory, economic and technological drivers are changing the shape of banking.
  • Consumer expectations are increasingly driving the corporate response to technology.
  • Digitization and real-time processes are treasury opportunities: closer relationships with internal functions and banking partners help to understand broader business needs.
  • Cyber crime remains a threat: treasurers are vital managers of risk when it comes to new approaches to technology and interconnectivity.
  • Treasurers have a role to play in steering the business through the new technology space.
  • Flexibility within bank account and liquidity structures is essential to achieve ongoing treasury optimization.

Drivers of change

Significant changes in regulation and technology are driving huge structural changes in treasury.


Technology and digital payments


At the same time, increased digitization is leading to increased cyber security threats. Treasurers, as managers of risk, need to be leaders within their organizations, ensuring that threats are being addressed and investing in prevention and detection. To protect the organization from fraud, treasurers need to have a robust platform and extremely well-trained employees. Treasurers must also make sure they are using the new flows of data to provide 'early warning system' visibility into potential threats and breaches.


Seizing the opportunities

1. Treasurers can improve the experience for the end customer.

More aspects of our everyday personal and corporate lives are becoming digitized, representing an immense opportunity for both corporates and their banking partners. Treasurers need to work with their business units and banking partners to understand, and respond to, emerging payments needs. They should be aware of changes to clearing systems as well as consumer-related digital payments initiatives currently gaining ground. Treasurers have a strong role to play in creating awareness of and leveraging, where appropriate, these new technologies. 

One area in particular that is emerging as an opportunity for treasurers is big data. The surge in data flows means that good data management is therefore becoming increasingly important.

changing-banking-environment icon customer

  • Through debit and credit cards, for example, businesses can start collecting data that provides treasury with real-time visibility over cash flows and the ability to forecast on a real-time basis. 
  • Data analysis on payments and receipts can provide deep insight into consumer habits. By linking this information to profile data, they can spot trends and target their consumer base with more bespoke offers, driving more revenue.

2. Treasurers need to ensure that their investment policy is fit for purpose.

In this new environment, flexibility is key:

changing-banking-environment icon investment

  • Negative interest rates – Treasurers should question whether it makes sense to hold cash that is not generating a return. They should look to better align operating flows with deposits into banks that are assessed as strong counterparties, which can provide credit support in the longer term.
  • New definitions of operating cash under Basel III will require treasurers to explore alternatives to generate yield.
  • Reform in MMFs will impact the relative attractiveness of MMFs compared to bank deposits.

3. Treasurers need to ensure that their business structure is malleable.

The landscape is evolving at a rapid pace. Treasury should have visibility and central control over accounts to enable quick decision-making and to minimize the impact of change to the business. To effectively adapt to ongoing change, corporates must ensure that their bank accounts and liquidity structures are flexible.

changing-banking-environment icon structure

  • The move from paper to electronic gives treasurers the opportunity to rationalize bank accounts as the flow of receipts changes and having local accounts to receive checks are no longer required.
  • Increased activity in corporate spin-offs is resulting in a need for more flexible account configurations.

A change in approach

The amount of change in the banking environment affords treasurers a great opportunity to optimize their structures. An understanding of the key drivers of change will allow treasury to better:

Learn More

Please contact your J.P. Morgan representative to discuss how we can help you make the case for change.


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