Going into 2024, the treasury landscape looks set to be etched against a backdrop of challenges once again. Global uncertainty, alongside higher commodity prices, inflation, and interest rates will undoubtedly be top of mind for corporates when considering supply chain impacts and how that may translate onto the balance sheet.
Almost four years on from the onset of the pandemic, as higher manufacturing and borrowing costs mount, sustained pressure on firms to stay profitable may lead to an increased focus on squeezing costs across the value chain.
Forward-thinking cashflow forecasting, coupled with a joined-up global liquidity management approach will be key. Overall, a Cash Management strategy that is embedded in simplification and innovation, whilst nimble enough to respond to change at pace, will be vital.
Below we set out our seven key considerations for effective Cash Management for corporates in 2024:
1. Investing in a solid technology stack as a long-term play
Although focus on costs is likely to be central for firms, prudent investments today in modernising technology across the fundamentals like payments processing, API connectivity or a robust ERP can prove a strategic long-term play.
Additionally, rationalisation of operations across shared service centres and sales and distribution units will be key to prime for sustained growth.
2. Unlocking the value of location strategy
This can be done by re-examining where trapped cash may be less optimised in countries with legal and regulatory barriers, and reviewing trade and working capital programmes to ensure they continue to be commercially attractive could reap benefits.
3. Considering the breadth and depth of solutioning
This is of particular importance when thinking about near and medium-term strategic goals, as this is integral in driving efficiencies in Treasury processes. Whether that is in embarking on a transformative project like re-imagining an in-house bank, accelerating adoption of real-time payments, or promoting APIs as central to connectivity, assessing all available options to cater to specific business models will be advantageous.
4. Giving credence to the global-local dichotomy
Opting for homogenised solutions oftentimes makes perfect commercial sense, however taking the time to carefully assess and acknowledge specific country or operational nuances will be critical to building an elastic Treasury strategy to support business ambitions.
For firms that find themselves with sizeable cash-rich positions, this could be in evaluating cash pooling and virtual account structures to ensure they are meaningful from the bottom-up and equally across global entity structures as well.
5. Future-proofing investment strategy
Although the themes of ESG and green investing are by no means new to the agenda, there is increased traction in this space to seriously give consideration to this investment category which speaks to corporate values whilst delivering a diversified investment portfolio.
6. Collaborating with partners that truly value the importance of platform reliability
In an age where speed and agility are key but very much go hand-in-hand with cyber security, taking the time to choose the right collaborators is crucial. In an overcrowded marketplace, the choice in Cash Management providers has never been greater for corporates.
However, with cyber security increasingly a top priority for the C-suite, carefully assessing to onboard a partner that shares the same ethos and cyber risk management approach will be important.
7. Getting the basics right consistently
Whether that is in efficiently processing payments and collections or ensuring deposit income is invested to provide the most optimum returns on security, liquidity, and yield, remaining laser focused on executing the basics to a high standard in BAU will continue to come first.
Santander CIB’s Cash Management expertise
During these times of unprecedented market change, Santander CIB is committed to helping our clients navigate the intersection of corporate treasury transformation, effective liquidity management, and technology innovation across industry sectors.
With decades of experience spanning across Europe, Asia and the Americas, Santander’s Cash Management practitioners are trusted partners that truly understand what it means to differentiate.
Drawing on the strengths of our global franchise and depth of our product propositions, cutting-edge technology capabilities and utilities, we roll-out complex and integrated Cash Management solutions that are centred around a best-in-class client experience:
- Flexible liquidity management solutions adjusted to your treasury management needs. Our frictionless solutions are designed to inform better business decision making, risk management and reconciliations, ultimately leading to sounder balance sheet management.
- Scalable end-to-end payments management, including a secure online banking platform powered by a cutting-edge global payments engine, and full-range of connectivities across payments rails from the ERP to the final beneficiary.
- An integrated collections offering enabling you to optimise your sales conversion. Supporting all major international payment methods and schemes, our value proposition is designed to accelerate time to market and expand reach.
- Access to state-of-the-art technology platforms embedded in innovation, simplicity and flexibility. Our unique operating model affords us the reliability of a bank with the flexibility of a Fintech.
- With strong risk, compliance, and fraud prevention processes, protecting your data and information is paramount to us. We are constantly evolving our technology and controls to bolster cybersecurity defences and operational resilience, putting the safety and security of our clients at the core of our operations.
Eva Bueno (global head of Cash Management), says: “We are fully committed to helping our clients grow their businesses through an advisory approach in the evolving payments ecosystem, spearheading innovation and co-creating solutions together.”