CitiFX Publication - From Crisis Management to Business Recovery

Automating the aforementioned processes mitigates the risk of human errors and omissions but would also have a positive impact on business recovery – reducing expenses and allowing for an increase in workforce capacity. FX process automation has become a high priority on the Treasurer’s agenda in recent years and is likely to become even more relevant post COVID-19. Citi recently engaged clients in a discourse on the emergence of the ‘New Norm’ and the role of treasury and technology in this rapidly changing business environment. Although all agreed it was anybody’s guess when the current market turbulence would go away, it was with similar conviction that the role of technology and digital automation, if not already established, is rapidly becoming a core priority across the entire operational and financial business model. For many this comes as welcome news, however, as senior management “raises the bar” of expectations, it is important for treasury to conduct a review of its “existing technology inventory” and assess what is actually in-place and needed to effectively move forward in this important journey. So where are corporate treasuries today? We would argue a large number of corporates still require investment in areas such as ERP systems and TMS and their connectivity in order to establish an effective risk management process. 8 5 Foreign Exchange Guideposts for Corporates in a time of COVID-19 Based on Citi Treasury Diagnostics 2 (a survey of nearly 400 corporate clients) we can draw the following observations. Despite the increasing recognition of technology as an important enabler to meeting risk management objectives, over half of survey participants reported that their TMS does not support financial risk management processes. That being said, and supports a continuing trend, nearly two-thirds of survey respondents confirmed their organizations are now looking at opportunities emerging across both the core business and the treasury function as a result of the emerging technologies. 25% 3 , and we would argue is now trending higher, of respondents are specifically looking at how these technologies can transform the treasury function. For those organizations where digital strategy is in-place, the top area of focus is the automation of manual tasks, enhancing customer experience and mitigating cyber security threats. In light of recent market disruption, we can certainly attest that these investments have been well served. Key Takeaway: Post COVID-19, we anticipate a renewed and heightened interest in the subject of process automation and prescriptive analytics 4 . As businesses have borne the brunt of impaired productivity and reduced capacity, they would understand the importance of reserving staffing strength for core and critical tasks, and automating non-core processes is the first but critical step at fortifying operational models.