Cash Repatriation, FX Biggest Concern For Corporate Treasurys

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Cash repatriation and FX volatility are the two main strategic challenges facing corporate treasury departments according to Deloitte & Touche’s 2015 Global Corporate Treasury Survey. As companies both move into emerging markets, increasing the complexity of their treasuries normal duties, and ask their treasury departments to play a bigger role in corporate strategy, the IT infrastructure currently place isn’t always up to the task.

“Fifty percent of treasurers noted their biggest challenges are the ability to repatriate cash and to manage foreign exchange (FX) volatility. These challenges continue, despite the ongoing trend toward leveraging technology solutions,” write Deloitte & Touche principal Melissa Cameron and partner Carina Ruiz. “Forty percent also cited insufficient technology infrastructure to support their department.”

EM opportunities pose a challenge for treasury departments

Part of the problem is that treasury management systems (TMS) may only be implemented in certain parts of a corporation. The Deloitte survey says that this typically gives treasury departments a clear view of what’s happening in three-quarters of the business, but the difficulty in getting information from the ‘residual business’ can be a problem. There’s also a lack of integration between treasury departments and the enterprise resource planning (ERP) systems being used: 64% of treasuries reported that they have to source and send information to more than one ERP.

Moving into emerging markets in particular creates challenges for treasury departments, especially when there are limits on repatriation and other regulatory constraints that limit their options.

“Treasurers need to be able to speak to their boards and executives about the inter-play (and sometimes divergent outcomes) of these growth opportunities on earnings-per-share vs. cash returns, as well as discuss the liquidity and balance sheet consequences,” write Cameron and Ruiz.

Tax authorities are also looking more closely at international transactions, meaning that corporate treasuries are often under scrutiny from multiple, independent regulators.

Treasury departments targeted by more hacking and social engineering attacks

While the surveyed treasury departments didn’t list it as one of their major challenges, Cameron and Ruiz note that they are increasingly being targeted by “elaborate phishing, social engineering and hacking attacks.” While it may seem separate at first, ad hoc solutions to treasury IT problems mean that the infrastructure being used is more complex, and usually less secure. As we learned from the hack on Sony earlier this month, not all attacks are aiming at stealing data and the consequences for ignoring security can be severe.

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