Real-time cash data a distant dream for EMEA treasurers

Vast majority of treasurers lack confidence in the accuracy of their moment-by-moment cash data

More than 90% of corporations in Europe, the Middle East and Africa (EMEA) lack a direct and transparent view of their real-time cash positions, according to leading solutions provider Cashfac Technologies.

Among the factors that are undermining treasurers’ confidence in the accuracy of their data are complex transactional banking relationships, a lack of multi-bank capabilities and inefficient management of working capital.

In compiling Cashfac’s latest EMEA Operational Cash Index, specialist research outfit East & Partners interviewed 350 CFOs and corporate treasurers from the region’s top 1,000 revenue-ranked corporates.

Their research revealed that:

• Only 9.1% of UK corporates have a 360-degree, real-time view of their cash balances, with just 8.3% able to forecast their cash flow as it plays out;
• On average, EMEA corporates are tied up in as many as 17 different bank relationships – many more than in other regions, such as Asia;
• There is a powerful need for treasurers across the region to lower the risk that stems from not having accurate, real-time cash management in place;
• UK corporates are generally performing above the regional average, reporting greater control over transactions across time zones and multiple banks compared to their EMEA peers; and
• Corporates feel that banks’ understanding of their businesses and the industries in which they work must be improved.

East & Partners principal analyst Paul Dowling said: “Due to the complexities and shortcomings of managing multiple banking relationships regionally, our research found that many EMEA corporates lack a line of sight to their cash positions.

“Interestingly, a number of interviewees were hesitant in rating the accuracy of their cash flow; this is doubtless a result of their known inability to have clear line of sight to the organisation’s entire enterprise cash positions – and being somewhat wary of confirming this.”

Cashfac MD of Global Business Alastair McGill explained: “The challenges facing the corporate treasurer are significant, but accepting the status quo and failing to achieve a clear line of sight into the enterprise’s cash position injects risk and cost that most firms are keen to drive out of their business.

“There’s a fantastic opportunity for the banks that serve these corporates to add greater value and secure long-term, sticky relationships in exchange.”

However, he added, there were signs that improvements are already bedding in. “The satisfaction gap that exists between bank-provided systems and their clients’ expectations can definitely be closed,” he said. “After a drought of innovation and investment in bank-provided cash management tools, we are just starting to see the market leaders establish competitive