The treasury function: combining long-term vision with day-to-day priorities

As the treasury function evolves, treasurers must navigate a complex landscape as they optimise treasury operations and the cash cycle. Attendees at the recent European Association of Corporate Treasurers (EACT) summit looked into the latest trends, challenges and priorities for treasury professionals and how they can address the current environment.  

The EACT gathers 22 local treasury associations in Europe, representing 6,500 corporates and 14,000 members. Its 2024 annual conference, sponsored by BNP Paribas, welcomed over 250 treasurers from all over Europe. 

Challenges and opportunities 

In today’s volatile climate, treasurers face multiple new challenges. Participants surveyed at the EACT summit cited long-term funding, cash-flow forecasting and capital structure as the top three priorities and challenges for the treasury function over the next 12-24 months. 

Treasurers also see digital treasury as a critical challenge, where robotics process automation, artificial intelligence and machine learning require the integration of additional data, expertise and skills into teams. Meanwhile, working capital management optimisation, bank relationships, and geopolitical uncertainty are also among the other main challenges expected for the coming years.  

Aurélia Normand, Head of Transaction Banking at BNP Paribas CIB, notes: “Treasurers have to address multiple challenges and priorities in a fast-changing environment, combining a long-term strategic vision with immediate day-to-day needs. BNP Paribas is able to support its clients across the world with effective solutions to address their fast-evolving priorities.” 

Artificial intelligence: both challenges and opportunities  

Artificial intelligence and generative artificial intelligence are already transforming industries. Financial services are expected to be a key area for application going forward, and many organisations are now considering AI or are already using it. The treasury function harbours a range of opportunities for use cases, which include currency hedging, treasury reporting, short-term liquidity forecast, fraud, sanctions, and payment anomaly detection. 

Along with the opportunities it presents, corporates also face challenges in applying AI solutions due to the need for relevant and clean data that is secure by design, as well as the right infrastructure.  

BNP Paribas is aiming to implement 1,000 AI and generative AI use cases by 2025. Some possible use cases can include automatic data extraction, corporate KYC, anti-money laundering and fraud detection. Going forward, applications can include service improvement, financial forecasting, and document generation. 

According to Pierre Fersztand, Global Head of Cash Management, Trade Solutions and Factoring at BNP Paribas: “Events such as the EACT summit provide a crucial forum for discussion, helping us better understand treasurers’ needs and accompany them in today’s transformations.” 

The latest in payments 

Payments were another key focus of the EACT summit, as the market continues to innovate and develop. Corporations are increasingly looking for digital, mobile, frictionless and secure payment solutions. However, managing collections remains non-standard across European markets. This requires adaptable solutions, such as Axepta BNP Paribas. Standardisation and ERP adjustments for e-commerce were identified as ongoing needs in this evolving landscape. 

E-invoicing in particular is seen as an opportunity for both banks and corporates. While more than half of the corporates surveyed at the event feel they lack awareness of the new e-invoicing standard and regulation, more than a third perceive it as an opportunity. Meanwhile banks can integrate e-invoicing standards into payment methods to combat fraud.

Regulation a key point 

Regulatory changes are set to have clear impacts for treasurers. Attendees at BNP Paribas’ trade finance session took a deep dive into the European directive on late payment, aimed at reducing payment times to 30 days to afford greater protection for SMEs.  

The session also covered bank and country risk and centralisation of guarantees. In this fragmented and competitive market, banks have a key role in advising clients and co-creating solutions to support the entire range of corporate centralisation and standardisation journeys.