FX Review:Why COVID-19 Will Accelerate The Shift To A Smart Treasury

FX Review

Why COVID-19 Will Accelerate The Shift To A Smart Treasury


The COVID-19 pandemic has challenged traditional treasury processes as companies have responded to the crisis, and the business and market uncertainties brought about by the pandemic and government lockdowns. As a result, treasuries are now looking at how they can build sustainable resilience into the operating model; many are turning to technology to create a smart treasury. The overarching objective is to find a new way of managing risk against the backdrop of an evolving business landscape.


Even before the COVID-19 outbreak, there was growing appetite for the use of Prescriptive Analytics, which analyzes data to facilitate prediction and optimization and support human decision making in treasury. Figure 1 shows polling results from a Citi client webinar in Q4 2019, illustrating how companies expect to shift from descriptive and diagnostic analytics (i.e. static reporting, data visualization, and interactive dashboards) to prescriptive analytics (forecasting, providing recommendations, and automation) in the next three years. The appetite for Prescriptive Analytics is likely to increase further given the challenges treasuries faced this past quarter.

Figure 1 — Prescriptive Analytics Appetite

Prescriptive Analytics Appetite

The shift is a result of increasing trust in computational and algorithmic techniques to predict and determine potential courses of action. The advent of new technologies and the evolution of financial services had already prompted treasury to rethink its future. Now, as businesses and economies manage the pandemic crisis, there appears to be renewed focus by treasury to accelerate delivery of their digital strategy. A client webinar poll hosted by Citi in April (as COVID-19 spread globally) indicated that over the half of respondents are accelerating their digital strategy as a priority (figure 2).

Figure 2 — Corporate Focus Post-Covid-19

The COVID-19 pandemic has challenged traditional treasury processes as companies have responded to the crisis, and the business and market uncertainties brought about by the pandemic and government lockdowns. As a result, treasuries are now looking at how they can build sustainable resilience into the operating model; many are turning to technology to create a smart treasury. The overarching objective is to find a new way of managing risk against the backdrop of an evolving business landscape.

Erik Johnson
Director Risk Management Solutions
Erik.johnson@citi.com

Dr. Duncan Cole
Director Treasury Advisory
Principal, EMEA
Duncan.cole@citi.com

Kelvin Ang
Director Treasury Advisory
Principal, NAM
Kelvin.ang@citi.com

Yi Hahn Chin
Managing Director
EMEA Head of eFX
Solutions — Corporates
Yi.hahn.chin@citi.com

Ray Pereira
Vice President
EMEA Head of eFX
Solutions — Corporates
Ray.pereira@citi.com