CFOs, treasurers see the treasury function becoming more substantial

CFOs, treasurers predict a shift in the treasury function to move beyond cost-cutting, towards playing a profit, strategic or advisory role

CHANGE is on the horizon in Asia as the region’s treasurers and CFOs see their treasury operations playing more substantial roles within their companies. That’s based on the latest data snapshot from Asset Benchmark Research’s (ABR) ongoing Treasury Review 2018, which has evaluated the views of close to 600 treasurers and CFOs in Asia so far.

When participants were asked what their treasury centre would be like in three years, a large majority (79%) said their operations would be classified as profit centres or added-value (strategic/advisory) centres. This is compared to just 49% that say their operations currently operate a profit or added-value model.

To give it another perspective, while 51% classify their treasury centre as a cost centre today, only 21% see their treasury centre as being classified a cost centre in three years’ time.

Source: Treasury Review 2018, Asset Benchmark Research

Unlike a traditional cost centre, treasury management professionals in a profit centre are tasked with finding new channels of cash/liquidity and improving financial returns via schemes such as interest rate optimization. Added-value (strategic and advisory) treasury centres, on the other hand, look to collaborate with other departments with a mindset to providing advisory, insight and analysis.

One Middle East-based treasurer explains how his treasury function now generates profit: “Since we didn’t have proper liquidity management, we could not have a proper control on the cash management. Now people are so motivated because they can make money out of the cash management activity. This is a win-win situation.”

By location, currently 60% of Chinese CFOs and treasurers see their treasury centre as a cost centre. This falls to just 26% in three years’ time. Simiarly in India, today 24% of treasurers and CFOs classify their treasury centre as a cost centre. This falls to 0% in three years’ time, as respondents  say their treasury centre will classify as either a profit centre (40%) or added value centre (60%).

These data are part of ABR’s ongoing Treasury Review 2018. To participate, please click here.

Find out more about The Asset 4th Asia Treasury & Trade Summit please click here.

Since 2014, Asset Benchmark Research has gathered the views of corporate treasurers and CFOs in Asia on their current and planned treasury activities in the annual Treasury Review.

The survey asks about a range of topics such as their treasury set up, bank relations; risk management; review of treasury solutions and their outlook for the year ahead. Corporates are asked about the challenges they face in their treasury operations both from a daily operational and long-term strategic perspective.

There is also an emphasis on reviewing how corporates leverage technology in their business either to automate payables, improve reconciliation or rationalize banking connectivity. The review is conducted in the first half of the year.

Cover photo: Association of Corporate Treasurers


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