EuroFinance 2016 – Treasury at the tipping point: a summary

EuroFinance 2016 – Treasury at the tipping point: a summary

  • Trends & Vision

In this post we discuss the various 'tipping points' of treasury as discussed at EuroFinance Vienna.

The key theme of EuroFinance Vienna was ‘Treasury at the tipping point’, which was an apt theme for the 25th edition of the conference as never before has the world of treasury been confronted with influences and disruptive technologies from so many directions. The conference delved deep into the multiple tipping points of treasury.

On the technological front, as treasuries change, so do their perennial partners- banks. FinTechs and Blockchain are the two buzzwords that were heard more often than anything else at EuroFinance this year and banks are strangers to neither. Digitisation aided by connectivity and automation are the top aspects that both banks and treasuries will be watching out for. The next revolution is likely to be in cloud based solutions which FinTechs are likely to use in order to develop apps in supply chain finance. Both banks and treasuries will be facing the challenges of integrating new technologies, such as distributed ledger, with their existing systems. Banks are being forced to reconsider their strategies vis-à-vis lithe FinTechs whom they are now increasingly considering for investment and partnership. It is believed that Banks, due to their size of operations and regulatory expertise will have an edge over FinTechs and the industry will go towards a consolidation phase where only those that can adjust to the changing times will survive.

On the political front, contrary to what one might be tempted to assume, Brexit is not likely to be the primary reason for the ‘end of Europe’. The crisis in Greece and Italy, the migrant crisis and the problems with the single currency had long been signalling this watershed moment, which was only exacerbated by the Brexit vote. However, currently Brexit is the one issue that weighs heaviest on the minds of treasurers of international corporations as it is not at all clear if Brexit is going to mean a separate set of regulations and if London will continue to remain the chosen place for business. Moreover, the Brexit vote has the potential to spread the seeds of various other ‘exits’ in Europe, bringing further uncertainty, indeed misery to corporate treasuries around Europe.

Socio-economically, the baby-boomers of the developed world are aging and in the current system of things, require a young population to pay for their retirement and healthcare and to generally support them in their increasingly long lives by concentrating on higher levels of savings. This has become a challenge in the era of a generally aging population, wage stagnation and a drop in interest rates. The migrant crisis coupled with rising numbers of dissatisfied youth are increasingly fuelling nationalist sentiment all across the European Union. The theory of ‘reversal of fortunes’ appears to be applicable to the developing world as economic stagnation becomes the best available scenario.