Top-Priorities-for-2020

3 Top Priorities for 2020: Time to Future Proof Treasury Redesign treasury for real time We believe that the shift to real-time treasury — where payments, liquidity management, and security management are effectively instantaneous — will gather pace with the emergence of an always-on economy. Real-time payments are becoming commonplace in more markets, bringing new risks and a need for better management of visibility, compliance, and liquidity to support these flows. Companies are being impacted at different paces, largely defined by their industry ecosystem. For example, digital native companies, often services- based and with short cash cycles, and companies selling direct to consumers are becoming early adopters. Ultimately, this is a secular change and most companies are, at best, only moderately prepared. 2 However, all companies must prepare to have the ability to move, manage, and invest money on a global, 24/7/365 basis in support of the operating business. Hence, all treasurers should have a strategy and plan for deployment in the coming years. Clients often inquire about our views on emerging payment providers and networks. We believe this developing market requires close monitoring. Many emerging providers are networks of networks and lie outside of traditional banking channels. Today, such providers in the C2C, B2C/C2B, and B2B spaces experience lighter regulation, as compared to banks. Treasurers need to evaluate the know- your-customer, anti-money laundering and financial risks associated with new payment offerings from non-bank providers. They should also ask whether it is realistic to expect light-touch regulation to continue as volumes build. All companies must prepare to have the ability to move, manage, and invest money on a global, 24/7/365 basis. Customers, SME vendors, consumers and employees will expect banking to be 24/7/365. Banks will adjust interest conditions to account for continuous velocity of money. Investments will need increased liquidity – FX and Money Markets will need to evolve. Companies will need to manage competing interests between stakeholders. Treasury will need to develop systems and processes to manage liquidity in real time. What can we expect? 2 Source: In January 2020, Citi Treasury Advisory Group polled a group of clients in Asia, EMEA, and North America. A majority of respondents reported they were moderately prepared to unprepared for what real-time treasury will bring. One divergence between regions was that, in Asia, 52% responded they were moderately prepared compared to 44% in North America. We believe this is a consequence of the more advanced use of real-time payments in Asia. We will continue to assess how companies will deal with global real-time liquidity and solutions needed to support evolving needs.