Introducing the Key Treasury Challenges Survey

Through 2022, companies irrespective of size and domicile had to contend with rising interest rates, geopolitical tensions, a rationalisation across formerly thriving sectors such as technology, and looming fears of a global recession.

The Key Treasury Challenges Survey developed by CorporateTreasurer in partnership with BNP Paribas uncovers how a volatile business environment has affected the outlook and priorities of treasury departments across the Asia Pacific region.

The top treasury challenges reflect the more cautious view from treasurers on what lies ahead.

Access to capital is one of the most significant challenges facing treasury departments: a direct fallout of the hikes in interest rates that began in in March 2022. The need for capital is especially significant for companies aiming to establish a sufficient cash reserve to weather adverse economic conditions sparked by inflation and recessionary risks, as well as ongoing geopolitical tensions.

It has a direct impact on the top treasury objectives.

To gain deeper insights into just how treasurers are addressing the challenges and meeting their objectives, we divided the survey into three key themes: Finance and working capital; data and technology, and ESG.   

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Section 1: Finance and working capital – key findings

Cash is king all over again: The aggressive increase in interest rates to combat inflation has ended the Covid-19 fuelled era of cheap borrowing. Corporates must now strike a balance between the cash they need for working capital requirements and maintaining reserves.

Working capital requirements are on the rise: While the percentage varies among survey participants, all respondents are experiencing a greater need for working capital and are building cash reserves in line with the current economic environment.

Banks are still the preferred source of funding, despite higher borrowing cost: Banks’ in-house research capabilities make them an important source of critical market knowledge, helping treasurers in making informed decisions.

Treasurers seek more than traditional loans: Treasurers are looking for working capital financing solutions that go beyond providing liquidity. They are interested in solutions related to risk management, capital structure, balance sheet structure, and profit and loss management (P&L).

A more detailed evaluation of the challenges surrounding finance and working capital can be found in the Finance and Working Capital section of this report.

Section 2: Data & Technology – key findings

Accelerating digital transformation is a top priority for treasurers: The focus is on cash forecasting, data integration and analytics, and digitalisation of bank account management and KYC.

Treasurers recognise the value of automation: Automation offers convenience to treasurers in multiple areas, helping with their workload and allowing for tighter, more efficient teams. This becomes particularly necessary given the expanding mandate of treasury departments.

Several areas for improvement across the data and technology function: These include maturity of TMS, adoption of APIs, cybersecurity, and the switch to real-time treasury.

A more detailed evaluation of the challenges surrounding data and technology can be found in the Data & Technology section of this report.

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Section 3: ESG – key findings

The adoption of ESG-based financing is on the rise: While only 33% of respondents to the Key Treasury Challenges Survey have adopted ESG themes in their financing so far, 50%  are currently evaluating and implementing their ESG strategy.

Hurdles slowing adoption: Challenges to ESG implementation among APAC corporates include slow global adoption of common frameworks and standards, ESG not being a key priority for treasury departments, and lack of available information on the most appropriate options.

C-suite driving ESG prioritisation: Treasury departments increasingly acknowledge the importance of ESG-based financing, with treasurers describing ESG as a critical part of their organisation’s strategy. Companies are integrating ESG goals, such as through raising green loans and developing a diverse supplier base, with other priorities such as ensuring timely access to cash and mitigating risk.

A more detailed evaluation of the challenges surrounding ESG can be found in the ESG section of this report.

Methodology

The Key Treasury Challenges Survey is based on a survey of 128 treasurers representing corporates across the Asia Pacific region between December 2022 and February 2023.

These individuals represent a diverse array of businesses. After analysing the survey findings, we then conducted in-depth interviews with a select group of treasurers. From these conversations we arrived at deeper insights into both the challenges and the strategies driving treasury departments to meet their objectives.

Read the complete ‘Key Treasury Challenges Survey’ for the research findings, analysis, and insights across three critical areas – Finance and working capital, Data & technology, and ESG.