Corporate Treasury Set to Grow But Industry Must Adapt to Change

The large corporate treasury services industry is well positioned for growth. But as it evolves, industry players must also adapt to change or risk being left behind, says a new report from Aite Group.

The role of the corporate treasurer has been evolving for the better part of the last decade. What was once primarily a cash management function has slowly established itself at the heart of nearly every important financial decision companies make, according to Judson Murchie, analyst at Aite Group and author of the report, who surveyed 35 U.S.-based large corporate treasury personnel.

Today, treasury is tasked with understanding financial systems and markets around the globe to support the local, regional and global strategy of their organization. This includes establishing banking relationships, setting up regional financial centers and being able to quickly identify and mobilize liquidity as needed.

But as the role of treasury groups continues to grow, their staff are stretched increasingly thin, according to the report. For 45% of respondents, treasury is staffed with seven people or fewer, while more than 65% indicate 10 or fewer staff members.

The study also found that despite extensive global banking operations and the need for international services in multiple markets, more than 50% of companies use fewer than nine banks internationally. For 44% of respondents, international services account for fewer than 25% of total bank spending.

Respondents said products and services expected to see the biggest growth in coming years include electronic payment, foreign currency depository services, online banking, foreign exchange and real-time balance reporting.

"Large corporate treasury groups face myriad challenges, including limited staffing, increasing responsibility and a greater strategic role in the success of their organization," said Murchie.

"Because of this, opportunities abound for banks and technology solution providers to assist. Providers need to focus on solutions that empower treasury to spend more time on strategic elements of treasury management and reduce time spent on task-focused responsibilities and manual processes," he added.

Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio