The next challenges for the future of treasury in 2023 : interview with Sabbir Rahman

1. Financing and liquidity

Credit conditions have tightened in 2023, due to the aftereffects of the Russia-Ukraine War. driving energy prices higher leading to elevated inflation , high interest rates and the SVB and Credit Suisse banking confidence crisis. In this environment, banks are reducing their exposure to certain sectors they categorise as high-risk and corporates in those sectors may see less appetite from their panel of banks to refinance credit facilities as a result.

Furthermore, corporates in those sectors may see their FX and interest rate dealing lines, critical to execute trades for financial risk management purposes, withdrawn or reduced in size and tenor.

2. Heightened FX volatility

Heightened FX volatility in light of the SVB and Credit Suisse banking confidence crisis and steep interest rate hiking cycles from the BoE, of ECB and Federal Reserve.

Budget rates may have been set at the outset of the financial year. If rates move significantly by year-end, treasury departments could face a challenge to meet budget rates if they were insufficiently hedged, or may be unable to benefit from favourable market moves. If they had locked in the majority of their exposures using forward contracts.

3. Cybersecurity risks

In 2023, cybersecurity will continue to be a major challenge for treasury departments. As more treasury operations move online, the risk of cyberattacks increases. Hackers are becoming more sophisticated in their attacks and are specifically targeting treasury departments to steal sensitive financial data, such as bank account numbers, payment instructions, and customer data.

Treasury departments will need to invest in robust cybersecurity measures, such as two-factor authentication, encryption, and intrusion detection systems, to protect against cyberattacks and minimize the risk of financial loss or reputational damage. In addition, treasury functions will need to ensure that their teams are adequately trained in cybersecurity best practices. In order, for example, to reduce the likelihood of human error leading to a security breach.

To prepare for the next big challenges of treasury, finance departments need to rely on efficient tools and experts to support them. To know more about how Cashlab can help you, don’t hesitate to contact our team.