FINANCEOUTLOOKINDIADECEMBER, 20248SIX TREASURY MANAGEMENTTRENDS GOING INTO 2025By Finance Outlook India TeamThe role of corporate treasury has evolved significantly, shifting from transactional cash managers to strategic partners of the CFO, integral to corporate decision-making. Recent global events like the pandemic, wars, and rising interest rates underscore the importance of proactive liquidity management and risk mitigation. Amid economic uncertainty and geopolitical tensions, treasury professionals must anticipate challenges and adapt swiftly to maintain competitiveness.Surveys like the EACT Treasury Survey 2024 and Deloitte Global Treasury Survey 2024 highlight common challenges and trends shaping treasury functions across companies and regions. Drawing from these insights and ongoing discussions, this article outlines six key treasury trends to watch for in 2025, offering guidance for navigating this dynamic landscape effectively.Liquidity and Forecasting: Core Treasury Functions are Back in FocusLiquidity and cash flow forecasting have regained prominence amid ongoing economic challenges and geopolitical tensions. Companies face increasingly erratic operating cash flows, while banks and capital markets grow cautious about funding. The high number of insolvencies in 2024 underscores that liquidity can no longer be assumed.Effective liquidity planning is critical to ensure businesses can adapt to unforeseen market changes. Consequently, optimizing liquidity management and enhancing cash flow forecasting are top priorities for treasurers in 2025. However, treasurers cite consolidating data from diverse sources as a major challenge. Dispersed databases lead to manual consolidation efforts, limited cash flow visibility, and inaccurate forecasts, further emphasizing the need for robust systems and processes in treasury operations.Standardisation: The need to Unify Fragmented Systems and ProcessesFragmented system landscapes are a common challenge for many organisations, and streamlining them has become increasingly vital. Disparate solutions make it difficult to consolidate data, ensure system integration, and automate processes. Varied data formats hinder smooth exchange between systems, compromising cash flow forecasts and increasing susceptibility to errors and fraud due to manual entry and intermediate storage. For payment transactions, centralising payments in a payment hub enhances visibility, facilitates centralised approvals, and strengthens anti-fraud measures.To stay competitive, companies must "spring clean" their systems, adopting standardised processes. The upcoming ISO 20022 migration deadline in November 2025 marks a critical milestone in payment standardisation. While banks still offer conversion services for older formats, early adoption of ISO 20022 can future-proof systems, enhance global compatibility, and provide a competitive edge. Standardised formats enable efficient cross-border transactions and streamline automation, reducing operational complexity.Real-time Treasury: APIs are Becoming Even More ImportantReal-time treasury is becoming indispensable for finance executives navigating uncertain economic landscapes. APIs play a pivotal role, enabling secure, automated, real-time data exchange between systems. Widely used for payment data transfer between bank portals and treasury management systems (TMS), their adoption faces hurdles due to non-standardized protocols.Beyond banking, APIs connect internal systems like ERP and accounting software, fostering seamless data flow. This integration empowers treasury teams with real-time cash flow and liquidity insights, supporting strategic decision-making. Real-time visibility enhances liquidity planning, identifies risks early, and accelerates responses to fraudulent activities, solidifying APIs as essential for 2025.APIs also advance payment processing, facilitating instant payments. Though historically limited by higher costs, instant payments are poised for wider use. From January 2025, euro area financial service providers must support instant payment receipts, expanding REPORT
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