Volatility, Forex and Real-Time Payments Keeping Treasurers on Their Toes

Payments are moving increasingly digital and across borders, and real-time payments loom large on the global stage.

You can’t exactly say life in a corporate treasury role is sedate.

Yet Colleen Ostrowski, senior vice president and treasurer at Visa, told Karen Webster: “There couldn’t be a better time to be a treasurer.”

To be sure, this is not her first rodeo in the treasurer’s role. She has been in treasury services functions within organizations for all of her career, moving through several verticals, spanning industrial, manufacturing and pharmaceutical enterprises.

As she said, only a bit tongue in cheek, “I don’t think anyone grows up saying, ‘I want to be a treasurer someday.’”

Ostrowski herself had wanted to be a forensic pathologist, but she wound up in a rotational program at Pfizer, and her very first rotation was in treasury.

“It just hooked me,” she told Webster, “and it’s not about doing the same thing every day — you need to know not only the business you work in, but you need to know the external environment, too … and treasury allows you to see everything flowing in and out of the company.”

Some Things Are Universal

And although these days, within her current spot at Visa, she is not grappling with global supply chain issues, she noted that some things are universal.

“We all have to be worried about liquidity,” she said.

Visa, armed with technology and direct account connections (through Visa Direct, Visa B2B Connect and Currencycloud), can help other companies manage their liquidity more efficiently.

There are still frictions in the mix that bedevil those smaller firms, said Ostrowski. Chief among them: It can take days for payments to settle.

“Cross-border payments are complex, they are costly, and they take time,” she said.

As a result, the (negative) impact to companies’ liquidity can be significant, and in some cases, a few days of liquidity bottlenecks, where operating cash is rendered immobile, may mean a company has to close its doors.

Treasury-as-a-Service, she said, can be instrumental in helping those firms navigate the challenges in place right now as companies manage their exposure to transactions in different parts of the world. Reconciliation is an ever-present consideration, as a lack of important, critical data may mean that settlement simply cannot get done (and through Currency Cloud, virtual account management can automate reconciliation).

Connectivity is enhanced through the use of application programming interfaces (APIs), she added, in a way that renders foreign exchange (FX) into much less of a mystery than it was before, as treasurers have more tools in the toolbox. An increasing number of FinTechs in the mix are helping bring new functionalities to the treasurer’s role as they track invoices and currencies and examine the best ways to work with chief financial officers (CFOs) to manage cash flow.

“Anybody can source inventory across the globe,” she said, with high visibility, “and we need to bring that same concept to business payments.”

Looking ahead, she said real-time payments will continue to gain ground, and that will place more pressure on back ends at various companies to improve their invoicing, reconciliation and settlement functions and visibility. For the small- to medium-sized business (SMB), faster money movement can be a lifeline and can help lift the fees and steps that have been inherent in the correspondent banking network.

As a result, “we can get goods and services moved faster — and from a liquidity standpoint, [real-time payments are] a game changer,” said Ostrowski.

And although cryptocurrencies might be too volatile (at the moment) to be readily embraced in cross-border B2B transactions, there may be room for stablecoins and other digital offerings to become part of the treasurer’s toolkit.

For the treasurer, she said, there’s a continued desire for global standards as data moves across borders and in different languages. Orchestration layers can help.

In a decade, she predicted, the treasurer’s role will have significantly evolved from where we are now, well beyond the confines of financial statements, well beyond simply holding the keys to the corporate wallet.

“We’re becoming more than just custodians of the balance sheet,” said Ostrowski. “Now treasurers can be and will be strategic partners to help unlock the growth potential inherent in a business.”