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How to become a more strategic treasurer

Discover essential FX hedging strategies and currency management best practices from our foreign exchange experts.

How to become a more strategic treasurer

23 June 2022
3 min read
Agustin Mackinlay
Right now, there is a unique opportunity for treasurers to become key business strategists. Don't miss it! In this article, we explore how to become a more strategic treasurer and why now is the perfect time to step up and do so.

A unique opportunity

Treasurers have understood the benefits of currency management and FX hedging in particular for many years. But the fact is that these known benefits were somewhat overshadowed by the perception that currency management is a costly, resource-intensive activity. Here's a piece of (extremely) good news: Currency Management Automation makes it possible for treasurers to seamlessly run the entire FX workflow with the help of robust, easy-to-install software solutions.With an added bonus, embedded in these solutions, Multi-Dealer Trading platforms such as 360T drastically reduce the cost of corporate FX trading. So now is the perfect time for treasurers to step in and become key business strategists in their own right.Let's see how you can accomplish this feat.

Time-consuming, resource-intensive, manually executed tasks

Let me illustrate this idea with one example we could choose among many others. It's about one of the tasks that treasurers perform during the post-trade phase of the FX workflow. It consists in adjusting the firm's hedging position to the cash settlement of the underlying commercial exposure.This requires a lot of 'swapping'. Treasurers know very well what we are referring to. Swap execution is undoubtedly one of the most time-consuming, resource-intensive activities of members of the treasury team. Even if the FX transactions themselves are executed through Multi-Dealer Trading platforms, the action of inputting the trades, selecting the liquidity provider and confirming the trades are many times manually carried out.And if that wasn't enough, these processes carry a number of operational risks:

  • Data input error: the proverbial 'fat finger' error, which is in the news again for all the wrong reasons
  • Fraud risk: understood as the risk that arises when mistakes are not immediately reported

Don't let an outdated perception get in the way.

Like other processes across the FX workflow, the task of swap execution can be easily automated. This immediately frees up valuable treasury resources and gives financial managers more time for value-adding tasks such as fine-tuning their cash flow forecasts.So here's what we think is a very powerful message for treasurers: don't let the wrong and obsolete perception of currency management as a costly and resource-intensive activity get in the way of an efficient and modern treasury that can perfectly function as a source of value creation for the whole enterprise.

Conclusion: the digital treasury is upon us

We've seen companies shying away from the benefits of 'embracing currencies' —selling in their customers' currency and buying in their suppliers' currency— because of the outdated and value-destroying perception that FX management is too costly and too complex an undertaking.Take a minute to reflect on the enormity of this: a wrong perception may be acting as an unnecessary check on your progress as a professional and on the progress of your company. As a treasurer equipped with Currency Management Automation solutions, you can become a more strategic treasurer and turn the 'digital treasury' into a reality that takes your business model to new heights.

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Agustin Mackinlay
Agustin Mackinlay is a Financial Writer at Kantox. He has previously worked at an investment bank specialising in Emerging Markets. Agustin teaches several courses in Finance at LaSalle University and EAE Business School in Barcelona. He holds degrees from the University of Amsterdam and from the Kiel Institute of World Economics in Germany.
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