Top Trends and Priorities Driving the Treasury Agenda
What are the five priorities for Treasury and Payments to navigate the new environment?
Title: 1. Digital business models are becoming must-haves for business to drive immediate and long-term growth
Speaker: Lucia Li, Payments and Treasury Services Market Management, J.P. Morgan, Wholesale Payments
Where we see business models develop are two brush strokes. First, the proliferation of existing business models like recurring revenue, like platform and ecosystem that are commonplace in Asia, and the DTC, direct to consumer.
Title: Corporate treasury and payment teams need to join the journey and have a seat at the table.
We also see two new models emerging, especially in the emerging e-commerce economies. Those are contextual commerce, where transactions are embedded in everyday interactions with the consumers, to the sharing economy, which is another platform that will continue to grow, especially as these emerging digital economy grow and accelerate.
Title: Strengthening supply chain resiliency continues to be a critical focus of overall health
Speaker: Natasha Condon, Global Head of Core Trade, J.P. Morgan Wholesale Payments
So really a focus on the direction they're going strategically, where that supply chain is going, and what the digital treasury is set up, is going to be required to support that. And then a close focus on the health of the suppliers, and all the data that corporate can collect on how their suppliers are doing and where they need support.
Title: 3. ESG considerations are essential for long-term success.
Title: 3. Continued acceleration in M&A activity, expected fluctuations in the economy and supply chain disruption may all have a significant impact on cash management.
Title: 4. It’s crucial for treasury and payments to align with their peers’ digital transformation plans.
Focus on two steps - Eliminate manual legacy processes with automation and redesign the core business.
Title: 5. Start on your ESG journey today.
Speaker: Alison Livesey, Global Head of Financial Institutions Sales Strategy & Business Development, J.P. Morgan Wholesale Payments
Companies ESG credentials have the ability to impact sales through consumer sentiment, or the availability of credit or investors. We're seeing treasurers playing a key role and responding to ESG via ESG-friendly investments, applying those kind of ESG principles to supply chains, digitization of payments and eliminating paper, or incorporating ESG principles as part of evaluating counter parties.
Amidst uncertainty and crisis, the role of treasury and payment teams in supporting business objectives has been amplified. Across our client engagements, we’ve helped teams take advantage of the positive trends and mitigate the negative ones. Here are the top five priorities every corporate treasury department should consider.
More than 60 percent of our clients globally cited business model pivots as the driver for their priorities.3 As they become must-haves for businesses to drive immediate and long-term growth, corporate treasury and payment teams need to join the journey and have a seat at the table.
With the continued disruption on supply chain, as the economy rebounds, it is critical to strengthen the resiliency of your supply chain. Doing so will likely help position your business to capture the opportunities as demand comes back. A few practical considerations for the short and long term:
With expected fluctuations in the economy and with supply chain disruption, having a good pulse on working capital and visibility to liquidity is important for resiliency.
About 50 percent of our global clients identify accelerating their digital transformation as a priority.3 This was expected given the holistic push for digital acceleration and because leaders across all levels of the organization—board, executives and treasury—are aligned on prioritizing digital transformation.
Many clients are focusing on eliminating manual legacy processes with automation, but also look to redesign the core business for fundamental, meaningful shifts. It’s crucial for treasury and payments to align with their peers’ digital transformation plans.
ESG pillars are increasingly being incorporated into targets and objectives within organizations, even though it is still relatively early stage for treasury and payments. The corporate treasury can help support their organization’s ESG agenda through a broad set of treasury activities like payments strategy and execution, capital planning and allocation, working capital management, insurance purchasing, counterparty risk analysis, long-term investments, and long-term borrowing.
Other areas for corporate treasury to get involved include: (1) Making ESG-friendly investments (e.g. sustainability, green funds), (2) deploying ESG principles into supply chain management, (3) using sustainable financing and (4) incorporating ESG as an evaluating factor for counterparties.
As you and your teams dig deeper into your priorities, you may face a multitude of solutions, partnerships and strategies.
About the Authors:
Alison Livesey, Global Market Management
Varoon Mandhana and Sim Ung, APAC Solutions
Yousif Mohammed, EMEA Market Management
Lucia Li, NAMR Market Management
Dennis Paula, LATAM Solutions
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