LONDON – (BUSINESS WIRE) – Sep 23, 2021–

Citi released its latest findings from Treasury Diagnostics, its global business benchmarking survey designed to help companies assess their cash flow, working capital and risk management practices. The report, which surveyed the opinions of more than 475 leading companies from a wide range of industries and geographies, is titled ‘ Balance digital aspirations while addressing the fundamentals of risk management ” and highlights key areas of interest to corporate treasurers, while revealing that dealing with fundamentals remains the most important goal for many.

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As we emerge from the global pandemic, many corporate treasuries have established greater resilience across their operations, and many are now beginning to abandon the manual processes of the past to embrace new techniques and digital solutions to prepare for the future.

For some, this means ensuring the sustainability of cash flow through intelligent automation – initially rules-based, then extended to algorithmic techniques to increase human decision-making. For the most part, however, the report shows that examining the basics of data, processes, and people to better measure and manage goals remains the goal.

Digital aspirations exist but infrastructural challenges remain

The report reveals that there is broad customer interest in “everything digital” in treasury and finance, including the use of emerging technologies for process automation and data-driven insights.

• 57% of respondents are looking for transformation opportunities both in their core business and in their treasury function.
• Increasing efficiency in treasury and increasing decision making are now the top two expectations when it comes to investing in emerging technologies.

However, many companies must first focus on the fundamentals of treasury infrastructure. The report finds low levels of automation and connectivity with banking systems, highlighting the inability of some companies to effectively integrate their technology ecosystem.

• 64% say that their cash management system (“TMS”) is not integrated or only partially integrated with their enterprise resource planning (“ERP”), a probable cause of the significant use of manual processes for support cash flow forecasting.
• 79% say they do not have a fully integrated TMS / ERP platform with their banks, which again explains the need for manual reconciliations.
• On the positive side, less than half (49%) report multiple online banking platforms at each location, which would indicate a move towards better use of data provided by banking partners within the infrastructure of the business.

” While the Treasury’s goals remain constant and digital opportunities exist in how these goals can be achieved, for most Treasures, the fundamentals need to be addressed to lay the technological foundation and data layers for the fulfillment of the aspirations. futures. “ Stephen Randall, Global Head of Liquidity Management Solutions.

Playbooks for Emerging Treasury

Depending on factors such as maturity of treasury, existing infrastructure, appetite for automation, and aspirations for the role treasury will play, new playbooks for treasury emerge.

This report presents the Citi Digital Cash Index, which assesses companies’ digital aspirations and readiness expressed in their responses to Citi Treasury Diagnostics. The index provides tangible advice to corporate treasuries on how to begin their journey to digitization, the report offers playbooks for treasury. Each playbook depends on current levels of cash flow maturity, digital efficiency, and future digital aspirations:

• 74% of those surveyed are not yet able to fully seize the digital opportunity, including:

– 32% must first focus on the fundamentals of treasury before they can consider automation through emerging techniques.

– 42% have sufficient cash maturity to now consider the automation of processes and the use of data to increase decisions.

• 25% are in a digital treasury position to support business growth through data-driven initiatives.

” New digital technologies and the evolution of financial services have prompted corporate treasury to rethink its future. Collecting and using data as a means to optimize and achieve business risk management goals is now a top priority for many of our clients. Flavio Figueiredo, Global Head of Sales and Enterprise Solutions for Rates and Currencies.

Fundamentals of Risk Management: Opportunities Remain

While the advent of new digital technologies and the evolution of financial services have prompted corporate treasury to rethink the people, technologies and processes deployed to manage risk, the core tenets of treasury best practices remain. This study shows that effective treasury policies, implemented through processes and procedures, managed using key performance indicators, form the basis for achieving financial risk management objectives and a financial risk management function. top notch cash flow.

• The centralization of cash and risks remains the mantra with 63% of companies concentrating their cash at the global or regional level, with 80% of companies concentrating their cash on a daily basis. However, only 61% have a stake of more than 75% when allowed.

• Despite the availability of advanced cash forecasting technologies, only 34% use statistical analysis of previous models to predict the future and 80% remain dependent on Microsoft Excel as part of the technology stack supporting the forecasting process. .

• 77% of companies declare more than 75% of daily visibility on their cash flow. Yet despite the current availability of auto-matching technologies, only 41% of survey participants report auto-match levels above 75%.

• While 62% of companies reported reducing earnings volatility as a key risk management goal, the number of companies that actually directly hedge earnings conversion exposures is quite low (12%).

• The companies surveyed continue to follow a continuous, static, layered or opportunistic approach to hedging expected exposures. However, short-term hedging continues to be the preferred grade with some forecasting error involved.

• 43% said option-based strategies were allowed and 43% cited uncertainty of exposure as the main reason for their use.

• While 79% of respondents said they have exposure to currencies outside the G-10, two-thirds (66%) say they either hedge emerging market currencies (“EM”) and G10 exposures in the same way. , or not to cover emerging markets at all. Costs, market liquidity and local regulatory considerations were cited as the main challenges when managing currency risk in emerging markets.

“Companies are now doing comprehensive reviews of ERP / TMS policies and technologies, with the main question asked by seniors: where, when and how does currency risk appear? “ Jaya Dutt, Global Head of Risk Management Solutions.

About Citi Treasury Diagnostics – Balancing digital aspirations and needs while addressing fundamentals of risk management Survey demographics: Participating companies varied in size, with 64% ranging from $ 2 billion to over $ 25 billion in annual sales and representing all sectors of the economy and all regions of the world. world. Respondents shared their views and methodologies regarding their operational and financial risk management processes as well as technology.

About Citi

Citi, the world’s largest bank, has approximately 200 million accounts receivable and operates in more than 160 countries and jurisdictions. Citi provides consumers, businesses, governments and institutions with a wide range of financial products and services, including consumer banking and credit, business and investment banking, securities brokerage, wealth management and transaction services.

Additional information can be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://new.citi.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi

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KEYWORD: UNITED KINGDOM EUROPE

INDUSTRY KEYWORD: FINANCING OF PROFESSIONAL BANKING SERVICES

SOURCE: Citigroup Inc.

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PUB: 09/23/2021 11:00 a.m. / DISC: 09/23/2021 11:02 a.m.

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