Financing the Fragile Economic Recovery
1 like432 views
The document summarizes the results of a survey of corporate treasurers, CFOs, and other finance executives. Some key findings include: - Over 60% of respondents said that the biggest barrier to effective technology use in treasury departments is that its importance is recognized but not given enough priority. - Around 70% of respondents agreed that treasury departments are well placed to advise senior management on regulatory changes but are not well integrated into the wider business. - Respondents saw sluggish global economic growth, currency risk, and regulatory risk as the most serious macro risks to company finances over the next three years.
Financing the Fragile Economic Recovery
- 1. Source: Economist Intelligence Unit survey, July/August 2015 Copyright: © The Economist Intelligence Unit, 2015 Will reduce reliance on traditional banks Risk‐averse about partnering with FinTech Biggest barrier to making effective use of technology in treasury departments is that the importance of technology is recognised, but not given enough priority 62% 65% 61% Agree leadership teams increasingly consult corporate treasurers on strategic questions Agree that treasury departments are well placed to advise senior management on the challenges arising from regulatory change State that their company’s treasury function fully understands long‐term strategic goals 70 +% Say their company’s board does not take sufficient interest in the corporate treasury function 67% Do not think their treasury departments are well integrated into the wider business 57 % Key macro risks and risk management strategies 1 Funding and investment strategies2 Technology as a treasury enabler4 The changing role of the treasurer5 FINANCIAL-SECTOR REGULATION The impact of regulations on treasury operations 3 FINANCING THE FRAGILE ECONOMIC RECOVERY How global corporate treasurers, CFOs and other finance executives are navigating new risks and opportunities for growth Most serious macro risks to company's finances over the next three years are: EMEA respondents particularly concerned about growth and currency risk: Sluggish global economic growth Currency risk Regulatory risk 59% 38% 36% See sluggish global economic growth as a top macro risk Feel they spend a lot or most of their time on managing currency risk In the Americas VS 64% 52% 33% Costs will stay roughly the same Rising costs Falling costs CFOs are more willing to explore non‐traditional sources of finance than corporate treasurers: Cash hoarding: Credit costs over the next 2 years not expected to be a big problem: CFOs Treasurers Using new banking partners Traditional banking partners Supply chain finance Have no or not much excess cash Have either fair or large amounts of excess cash The vast majority say three important compliance developments are worth the costs of implementation: Dissatisfaction with indirect costs of financial‐sector regulations, such as: Respondents expect investment in treasury technology in the next 2 years: Partnering with financial technology companies (FinTech): Technology not given enough priority: CFOs recognise the growing strategic role of the treasury: However, corporate treasurers still see major obstacles: 39% 27% 35% 41% 21% 23% 45% 29% 26% 80% 20% 67% 29% 4% 78% 70% 69% 34% 47% 18% 1% New accounting standards The Payment Services Directive (PSD) The European Market Infrastructure Regulation (EMIR) The Dodd Frank Act Basel III Solvency II Anti‐money laundering (AML) laws Legislation on base erosion and profit shifting (BEPS) Heavy investment (unprecedented high levels) Moderate investments (levels they would consider normal/average) No or little investment Don't know Fairly high to very high amount of time Finance executives spend a lot of time on regulatory change: Appropriate amount of time Fairly low or very low amount of time