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Corporate Treasurers On The Lookout For FinTech, PSD2 And Brexit

Corporate treasurers gathered for the Association of Corporate Treasurers (ACT) annual conference last week, and there, treasury professionals made clear where their priorities stand today. At the top of the list, according to reports, is incoming FinTech disruption, legislation like PSD2, market shifts stemming from Brexit and more.

According to reports in Global Finance, an estimated 1,100 corporate treasurers from across the U.K. and Europe gathered for the conference.

Among the speakers was Graham Taylor, Vodafone’s assistant treasurer, who emphasized the potential for PSD2 regulations to have a profound impact on corporate cash management and payments.

“The use of financial technology startup tools in supply chain finance and other areas is also of interest,” he told the audience, “particularly with the second EU Payment Services Directive [PSD2] starting this year.” Reports noted that Taylor pointed to the increasing role of APIs in a PSD2 world.

“It could mean, possibly, getting rid of interchange fees,” he said. “That could be massive for us and all corporates.”

As treasurers explore the possibilities of FinTech, disruption is coming from other angles too: According to the publication, treasury professionals revealed their struggles to prepare for Brexit.

Nearly a third (31.1 percent) of treasurers surveyed at the ACT conference said they have set up a committee to analyze the impact of Brexit on their organizations, but a quarter said that while they have started to plan around Brexit, they have not made any progress on their initiative. Nearly the same (23.9 percent) said they haven’t started at all and are instead in “wait-and-see” mode.

“All of our information tells us the majority of corporates aren’t ready for Brexit,” reflected ACT Chief Executive Caroline Stockmann in an interview with the publication. “It’s a challenging issue and somewhat of a moving target presently. Treasurers aren’t clear what they should be planning for until it is known whether the U.K. will stay in the customs union and on what terms, leave it with its own unique deal and tariffs or suffer a disorderly Brexit.”

To coincide with the conference, the ACT published its “The Business Of Treasury 2018” report, which similarly emphasized the industry’s struggle: Treasurers are facing FinTech disruption head on, ready to handle legislation that heightens the potential for FinTech to support the treasury department’s strategic position. Yet Brexit remains one of the largest hurdles over which treasurers are struggling to jump.

Ninety-one (91) percent of treasurers across the globe surveyed by ACT agreed that treasury has a strategic role in the enterprise today. And while banks remain treasurers’ top source of funding, treasurers are diversifying their sources and increasing their use of private placements and alternative finance like supply chain finance, which increased 3 percent and 7 percent, respectively, since 2017.

Most global treasurers surveyed said they plan to invest in technology and automation, as well as cybersecurity, in the coming year. And as treasurers embrace their strategic role and increase their presence in the boardroom, their reliance on technology for capital and liquidity management, as well as risk management, grows.

Yet Brexit endures as an obstacle for the profession. More than 70 percent of treasurers say they are concerned about Brexit uncertainty. It’s not their top worry, however: Treasurers’ heightened focus on cybersecurity technology is a manifestation of their concern over cyberattacks. According to the ACT, 94 percent of treasurers surveyed said they are concerned about this issue, with 42 percent revealing they are “very” concerned.

With this in mind, two-thirds of treasurers agreed that they are playing a role in helping their enterprises address the external business issue of cybersecurity. According to ACT, the findings reveal continued reliance among treasurers on technology and continued reliance among boardrooms on their treasurers to juggle a vast array of disruptions and threats — some more easily addressed than others.

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