2023 Treasury Perspectives Survey Results

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Inform - Industry Insights


Thursday, April 20, 2023


11:00 AM – 12:00 PM EDT


This is an online event


Michael Gordon, TD Bank
Tom Gregory, TD Bank
Craig Jeffery, Strategic Treasurer

Sponsored By

TD Bank

Hosted By

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Strategic Treasurer and TD Bank’s annual Treasury Perspectives Survey polls treasury and finance practitioners on their current perspectives, plans, and strategies on issues such as economic and geopolitical outlook, top concerns, credit use and availability, operations and benchmarks, staffing, regulation, bank relationship management, technology, and more. This webinar will cover key findings from the 2023 results and will discuss the primary implications of this data for organizations this year and beyond.

If you encounter any issues with this webinar replay, please contact our team.


Announcer  00:30

Okay, well welcome everyone to today’s webinar on the 2023 Treasury Perspectives Survey Results. This is Brian from Strategic Treasurer, and we’re pleased you could join us as we evaluate the survey results, and discuss the implications for organizations in 2023 and beyond. But before I introduce today’s speakers, I have just a few quick announcements. Zoom offers several different ways for us to interact today. If you’d like to post comments or questions viewable by all attendees, please use the chat icon in the toolbar. If you’d like to ask your question to just the presenters, please use the q&a icon in the toolbar. You can ask your questions at any time during the presentation. And we’ll try to get to as many as we can. But if we don’t get to your question, someone from our team will gladly follow up with you. It will also be a few polling questions throughout today’s webinar, where you’ll be able to select your response from a list of multiple choices, you will need to click the submit button on the polling questions to have your response recorded. If you are here for CPE credits, you will need to answer at least three polls today. And last, please ensure that your resume display name includes both your first and last name. So we’ll know to whom we should send the credits. Our speakers for today are Michael Gordon, Senior Vice President of Treasury Management Sales, New England, at TD Bank, Tom Gregory, Senior Vice President of Commercial and Government Product Sales at TD Bank, and Craig Jeffery, Founder and Managing Partner of Strategic Treasurer. Welcome Michael, Tom and Craig. And I’ll now turn the presentation over to you.


Tom Gregory  02:24

Thank you, Brian. And it’s good to be with you, Tom and Mike.


Michael Gordon  02:30

Likewise, great, thank you.


Tom Gregory  02:33

We have we have a lot to cover. And thanks, everyone for joining. I know there’s a lot of things to do in any given day. And the fact that you’re going to spend an hour with us going over some of the survey results is awesome and very interesting to us as well. So we have a lot to cover. So let’s get started. Let me begin with an overview of what we’re going to cover today. So the about the survey, were a touch on some of the key statistics of the survey, over 350 of your peers took this survey. This is the fifth year in a row. We’ve done done and done this in partnership with TD Bank all five years. So thank you to TD Bank for their commitment to learning what’s going on in the industry and everyone who took the survey. A huge thank you from each of us to for your time invested in that I know it takes about 25 or 30 minutes to answer this survey. But after we go through some of the key points of the survey, we’ll look at outlooks and concerns and you guessed it, it’s less optimistic, a little more pessimistic, generally, but there’s some there’s some good nuances. There’s some different undercurrents, as far as how people are looking and viewing things on the road ahead. Now certainly since the survey came out, there’s been some, you know, issues with bank failures and central bank actions that keep us on our toes. But it’d be interesting to see the results. In this section, though, look at innovation and technology. Your peers are spending money on technology for sure. They’re excited, they’re nervous, and they’re concerned in different ways. They’re excited about the opportunities. They’re concerned that their teams are not keeping up a significant portion are and a significant minority are concerned about things like AI and ML and how that will impact their jobs. So let’s look at those details. When we get to that section on the borrowing from one of the items that I think we’ll all notice is its rates have gone up. Credit has been tightening. This is a multi year trend. We’ll see that in some more detail. The shift of power as we see it as a consulting firm has moved from a balance favoring borrowers in the time of plentiful, plentiful cash low to almost no, a 0% rate almost to a raised rates and some ongoing tightening, we see that it’s moved from less than favor the borrowers to more in favor of the lenders or the balance of power shifted that way. As every as we see cycles from time to time over the years on security training, we’ll touch on some of the points about what companies are doing what banks are doing, banks have really led the way in security training, in terms of comprehensiveness of it, in terms of focus on payment, security, and also running their programs more regularly than just annually. And they’ve moved, they’ve been moving to more continual training. On the security front corporations are moving in that direction to, but they’re probably multiple years behind. And then at the end, Mike, Tom and I each have some some takeaways, what do we do with this information, there’s far more insights that can be gathered than just three at the end, but will at least start you off on this information. And as Brian posts throughout the session, there’s ways to download the report, those who took it get a larger report. So again, thanks, everyone, for for taking the survey, I’ll try to keep us moving along. On the Quick Stats side, I already gave you a little bit of a heads up that we are. We’re in the fifth year of research, we ran the survey for a 10 week period, you can see that in the blue, the lighter blue section at the top, ran through Movember, we did our analysis. And now you’re seeing some of these results, good coverage across the globe, really heavy in North America, of course, Europe follows trailing by Asia Pacific, the lightest area is Africa. Lots of lots of different roles, taking the survey, one, six, CFO, treasurer, ATS, treasurer, managers, etc, making a 50% in that group. Now, that gives us the quick overview. And again, thank you to everyone who took the survey, this is very, very helpful. Now on the global outlook side, I wanted to cover this briefly. You’ll get all the slides, it’ll have all the content. But if you look at this question, what’s the what’s the attitude, the perspective economically, and that sub headline is highly negative for 2023. So expect the GDP of the country we’re headquartered into increase? Or decrease I mean, decrease GDP means a recession, right? It’s a lower economic output. And so you can see it’s it’s pretty negative as we look out, going forward, right? Expected to to decrease 42% and 2023, more of an expected rebound and 2024. If you’d look at the different branches, so lower on the left hand side, a larger decrease from 42%. Less less concern, as we look out one more year, only 21% expected decrease, which is recessionary on the increase side, just a third and then a little over half. So that’s still not rosy. But it’s you can see that the expectation is a rough 2023 And perhaps less rough and 2020 for moving to positive GDP on on a country that we’re headquartered in. So this is just talking about the headquarter country. I’ll keep us moving along. And, Mike, I’ll invite you to jump in on the pessimism and optimism from


Michael Gordon  08:41

Yeah, thanks, Craig. So let’s take a look at the outlook. Our company’s thinking about their business and the outlook for those business. We specifically asked this question over the past 12 months, how’s the outlook of your organization changed and clearly, there’s a tone of pessimism, as the subtitle says a rate of twice the rate of optimism. And and what you find year over year, there’s a big shift. And if you look at the graphic over the last couple of years, it’s almost a mirror image of that shift from optimism to pessimism. And that played out across all size companies, small, medium, large, all of them had the same pessimistic sentiment when it came to their outlook. And interestingly enough, and in Europe is even more pronounced as more of a three, almost four times the amount of pessimism over optimism. And here at TD Bank, we have a weekly bottom line economic report that comes out and just to share some of the current thoughts around that headline inflation rose and this is public. This is available to the public headline inflation Rose 10 basis points month over month in March, which is ticking higher and maybe a slower rate but we’re still in this uncomfortable territory of five point six. And retail sales also declined a 1% month over month. And that’s the second consecutive month that happened. And then of course, we have the Federal Reserve activity in May. And this some anticipation that that will be a 25% increase. And so the sentiment is, is is strong and in you may be able to, you may, it may suggest that it’s here for a while given the news still coming in about the various data points in our economy. Let’s take a look at revenue. Next slide, please. So how are companies feeling about their their future revenue? We asked the company we asked a corporate respondents in the next year, fill in the blank, we expect sales or revenue to increase decrease or remain the same. And so overall, companies are feeling fairly positive about growing their revenues. 59% feel that they will increase revenue, overall 20 12% believe they will discrete decrease Excuse me. And what was interesting about the the result is medium sized companies stood out. So we tease that out. And we set this aside on its own 69% of medium sized companies feel better about growing their revenue currently and only 9%. So there’s a pretty significant difference between the two as far as the net increase goes 47% versus 60%. So we thought that was noteworthy. And we wanted to pull that out of the results.


Tom Gregory  11:42

You know, Mike, just to I’m not sure if there’s a question at the end of this, but I wanted to comment on the the earlier the first slide we saw was on GDP and the country they’re in. And that was mostly negative. And the pessimism at the company level was was a little bit more but not as negative as the country. And then and then this is interesting. Like why would size make a difference? I don’t know if you anything you want me to speculate on there. That day more nimble? Any, any thoughts? Obviously not survey results. But just any thoughts?


Michael Gordon  12:15

Yeah, no, I think what we see in the market is a continued, or we talk to our customers on a regular basis, and you get the the sentiment is the same regardless of company size. So we’re not really seeing that one’s driving the feeling one way or another. We just see it just used to be like there’s a mood, it’s probably influenced by all the media and what we’re reading and all the data points, but there really isn’t what we’re seeing anyways, in the market. We don’t see a big difference between that any of those cohorts.


Tom Gregory  12:48

Okay, and interesting. Got Europe, there’s, there’s more expectations of recession in Europe. So you can see how that would impact individual companies. Or at least that’s a guess. All right, we’re going to move to our first poll question. And that’s going to pop up on your screen. This is a multiple choice poll question. If you can’t see it, look in the chat box, and it’ll give you some instructions on finding it. But here’s the question The following are significant concerns for us not any level of concern, but significant. In 2023, it goes from cyber fraud down to inflation. And you should select all that are significant concerns for for you, or, or as you represent your organization. But it’s really, what would you say are significant concerns as you look at your role in the organization, we’ll get a chance to submit those, enter those and submit those. And in the following our pattern of seeing who’s interested in seeing if there’s enough interest in getting this type of bold data, or all the people that aren’t here, if you type the type the letters TD in the chat box, if we get 125 people typing the word TD in the chat box, we will send the results out embedded in this in the presentation deck. We will stick it in the in this blank slide. This is poll question. We’ll put the results in there and get that out to you. So we’re just looking for 100 125. That’s it. The best part about this is that Brian makes sense to add them all. So that secretly delights me. Special thanks to everyone who capitalized TD. All right now, I guess. Yeah, Tom, I’ll invite you to make make any comments on this top one is interest rates, right? We’ve seen that raise its head number two and three are cyber fraud and inflation so interest rates and inflation pretty well tied together. cyber fraud as cyber fraud is up there. Any comments on that or the other ones, Tom? Well,, um, so cyber fraud. Since we’ve been doing this, Craig, in 2017, never surprises me feel like we’ve been talking about it till we’re blue in the face. But But I think there’s evidence and we’ll see some of that later on that the the work of a growing group of evangelists, many of them work at banks across the industry have been having some impact. But the cybercriminals are always want half a step ahead of the sheriff. And so it doesn’t surprise me. But But interestingly, in the in the data that we’ll see a little bit later on, when you see related questions about top concerns, on a relative basis, cyber did not raise to the to the uppermost level, interestingly, that for this particular cohort that’s on the call. It’s it’s all the way up there and doesn’t surprise me at all. The the commentary on interest rates, the the the 25% compliance and regulatory expansion, that tells me that there’s a fair amount of corporates on the phone, and the bankers that are on the phone aren’t voting. I can tell you, the regulatory landscape continues to intensify. And I think for good reason. And I don’t think I need to point to recent news cycles. But it’s it’s not a bad thing. But it’s just interesting to me that it didn’t rise to the level of interest rates. Like was there anything you wanted to chip in here on any of the poll results, I think strike you.


Michael Gordon  17:01

Yeah, I would echo everything that has been discussed so far. But it is interesting supply chain is so low, where I think that would have been one of the leaders four years ago, and now it seems to have taken care of itself. So I find that that’s good to see. And it’s interesting at the same time.


Tom Gregory  17:18

So we haven’t we have a question in from LinkedIn live. So what this is going out through zoom and LinkedIn live, can you comment on the PPI, the Producer Price Index to either do you want to take on take on that? I would probably pass myself. But if there’s anything you wanted to talk about that? Well, go ahead, Michael.


Michael Gordon  17:42

No, I was gonna defer to you, Tom.


Tom Gregory  17:46

So I’m not prepared to talk about the index, per se. But when Michael was going through that slide about anticipation of growing revenues, at right, in the wake of some expressed pessimism, I thought, well, is this an indication of optimism? Or might it be that this is an indication that as much as my company is worried about rising prices, we have to right raise prices, too, in order to keep pace and so that will increase revenues? We didn’t ask about the expectation, up operating costs, you know, neck right next to the expectation for revenues. So I mean, it My instinct is that PPI will continue to be something that could rise could take a while to fall. You know, we’ve we’ve yet to see a true return to to the prices prior to things like the the conflict in Ukraine, around the cost of energy. And, and so I I personally think that the PPI may continue to be kind of higher than we’ve gotten used to it being over the years. I mean, a lots changed. It’s amazing to me that we’ve been on the phone for almost 20 minutes. And the P word hasn’t come up yet. Like did the pandemic not happen? And it’s so it’s a it really is interesting that the world really has changed. Since we’ve been doing this survey out there, they were seeing cycles here. And in 17, there was an amazing amount of optimism. And then the next year, there was a lot of optimism but not quite as much. We went to the pandemic, there was uncertainty in our, we’re coming out with, with some degree of pessimism. And remember, this survey was peaking in about the November timeframe. And there was still I think, if you looked at the news cycle, the the Biden administration was struggling to communicate to the country, that there was some tapering of some of the things that that people were really concerned about specifically, price of gas. But it’s, you know, it’s a good question. I particularly, have not seen a lot of evidence in this survey, that there’s going to be much relief there. Thanks, Tom. And that, thanks for people typing the messages, both in the q&a, as well as on LinkedIn live. For those of you who are keeping track, we still need 13 TDs for the data. So we gotta guess we got 112 70. We just need a few more to get us to that point. Tom, if you want to continue this discussion about where’s your top concerns at the macro global economic level? Yeah. So this is what I was referring to earlier, when we saw look, cyber was is way up at the top. And, and here, suddenly, it’s not the longest bar on the sheet. It’s, it got the fewest. The few was very highs, and the fewest highs relative to these other concerns, and we give people the choice of concerns based on you know, what, what we all know to be generally, these are the relevant ones in this particular this particular time. But this is not a question where there’s a zero sum answer, you could, you can, you can say I’m very concerned about every one of these things. So it does, it does kind of give you the impression that, at least at this point in time, what was more top of mind, probably more of a real concern was the economy. And whether or not the economy is is going to overheat, or suddenly the economy is going to recede. You know, it’s funny, the the survey, there’s sometimes there are questions, you wish you could really ask the question today. Because this may get a maybe not as significant different result. But my guess is that the result will be a little different. If we were to ask this question right now, what’s really nice about this survey tool, is that we ask the same or similar questions, each survey period. And so you’re able to see these migrations of, of sentiment and perspectives over time. And I think, in the past, cyber would have sort of out scored all of these others. I think this is essentially telling us that cyber is still every bit a concern as it had been. But there are things that are kind of new, more intense on our mind at this moment in time. And as I said, it’s all about the economy. Now that’s, um, it is funny how these things highlight activity. We’ve lost, we’ve lost Mike. Tom, you want me to start this one off, or do you want to start off on payment features innovation? I mean, I’m happy to,  When I when I took a look at this for the first time, I was I was struck at the bottom one, that only 20% of respondents Rate rated, you know, remittance information, as, you know, a one or two. That fascinates me, especially in the b2b arena. This has been kind of a grail quest to enable accounts receivable operations to automate. And there the automation is only possible if you have the data from which to make accounting entries. And so you know, we’re looking at TD was totaled, so we’re still growing our wholesale lockbox business, and where the sender of payment, sends a check stub, and whatever they feel like sending on that check stub, and then the recipient of that payment has to figure out which receivables do I relieve. So this may tell us something here, it may tell us that, that companies are finding ways to automate, perhaps outsource or perhaps apply machine learning to identify incoming payment remittance information, and, and do what people used to do. You know, after a few payments that come in from a given sender, perhaps the AR person says, oh, that’s XYZ, they always list purchase orders or something like that. And so they know how to make the accounting work. Well, now maybe the machine can find that pattern and create the appropriate accounting entry. Didn’t mean to go right to the to the bottom here, but a security and control over payments. That one is, I think, a noble thing to do to place importance on. And I think it speaks to a sensitivity that we know that we’re still very vulnerable to cybercriminals vulnerable to insiders, all sorts of fraud. And, and so that one is, is still a work in process. The right side of the page, to me is, is fascinating. Remember this, these are questions posed to the corporates, not to the bankers. And, and so the largest amount of growth, faster real time processing, that that’s one that I think has evolved in a pretty significant manner. Over the years, I think the level of awareness has grown, I think that the ERP systems have been further developed and people are upgrading if you if you were on these calls over the years, and we talked about where are you? Where are you investing capital, there has been a lot of capital, apply to upgrading systems, upgrading platforms. And, you know, real time processing can only happen when you’ve modernize your, your platform. Craig, would you like to add? You know, on the on the right hand side, if we go to the top there we see 60% Expect to see almost 60% Expect to see that the most growth and payments innovation in this in this timeframe. When I when I think about real time processing and the discussions we’ve had a lot of people are like we don’t need a real time treasure. Or there’s a few areas we might need real time or close to real time. But I’ve I haven’t heard anybody say we need things moving slower. Everything over time moves faster. And so there’s a lot of development to move payments in particular and information to an increasingly faster pace, which I think is I think is inevitable and we’re seeing development there. So that was that was one of the interesting items to me. And yeah, so we’ll we’ll push on and Mike, glad to have you back. We’re we just shifted to the view on tech developments. Are you ready to jump back in after being dumped off the system? Nicely?


Michael Gordon  29:55

Absolutely. At a power situation. So yeah, so is the slide we’re addressing at this point?


Tom Gregory  30:02

Yet, we just we just moved on to tech developments, the different attitudes and perspectives here. And if you want me to cover that, or start us off either way, whatever your whatever you’re good with.


Michael Gordon  30:12

Yeah. So whenever I start on this slide, we’re in good shape. There’s what he’s saying. Yeah. So what this slide depicts for us is a couple of the responses that we had is a reflection of what companies are thinking, okay, so this is I’m sorry, now I’m caught up with you. And thank you, for the patience I dial back in. So as we look at the slide about the results, and you go left to right across the radio dials, we asked our respondents to please indicate how you feel about each of the following statements. And as we start with the Blue radio, dial 77%, the statement was, I’m excited about development of new technologies. And this is a oval, in many ways. It’s a it’s a large endorsement towards the outlook, that many companies have now about leveraging technologies to be able to run their business better. So a positive sign. And as we move to the right, the court the statement is I’m nervous about innovations, whether it’s an AI and machine learning, or our AI RPA. And what you could look at this as being the flip side of the first statement, in some ways, but you can see why companies are, you can see that companies are more less nervous and more like, what does this have to offer? What’s the what’s the technology? What’s the future look like here, and being more of a productive view of it, then then being nervous. And so you think about a I’m sure that you can glean from this that companies are thinking about, yeah, we want to be more accurate, we want to be more efficient. We want to automate a lot of these routine tasks that we have like data entry, invoice processing, account reconciliation, and and also glean the insights that AI has, it’s a, it’s a more immediate real time insights that will help us run our businesses better, too. So there’s clearly some positive energy and notices about nervousness. But the response that only 16% implies that folks aren’t nervous, they’re actually looking forward to the next, the next opportunity to leverage technology. So then, the last radio dial, we talked about upskilling. Am I concerned, our staff is not upskilling with new technology quick enough. And as these financial operations become more complex, and they’re increasingly using data to make decisions, new technologies are coming on board. Talent, are the resources need to be adept at navigating new technology. There’s a concern out there is is the the team ready to take that on. And a little bit from those the when you read the survey, you’ll see there was also a question about are you investing in upskilling your talent, and so in that result was 24%. So there’s a bit of a disparity there, which is kind of interesting that companies 24% of the companies that say yes, we need to invest in this, we need to train better, we need to recruit better, or different skill sets. And they’re making that investment while 44% of respondents also saying which we’re still concerned, so there’s a gap there and over time that will play out and possibly be filled as companies address this. That disparity. That’s, as I’m catching up here, correct. That’s all I had with the something that one of you would like to add to that slide.


Tom Gregory  34:09

Tom, anything you want to weigh in on here? It’s funny how I look at these slides, and I just don’t immediately think about how these attitudes and perspectives have changed over time. And it I think there is a more pronounced degree of excitement. You know, we got almost four fifths say, either agree or strongly agree about being excited. So that’s it. I can remember Craig we did a we did a podcast and we were exploring, I think it was like 12% people had fear around these technologies, machine learning and stuff. I think you’re always going to see a small portion that say I am or risk, because there’s still either things that are unproven and unknown. But also, I mean, think about chat, GBT, my son writes screenplays and he was he was letting me listen to very well known celebrities reading his screenplays. These celebrities didn’t know that they were reading his screenplays. So I think that, you know, there’s always going to be some, some level of skittishness on the part of some, I think the and so neither one of these two pups surprise me, the 44% that are concerned about staffing is a big concern. I think it’s it’s a concern about availability of labor, about the caliber of labor, about keeping the workforce trained and developed while we’re trying to run the company. And I think this provides for a real strategic topic for leaders to take on it if they’re, if they’re kind of just going along and figuring it out. Each day, you may be setting yourself up for a real issue down the road. So I think this really does speak to the talent planning has always been good practice for leadership. But when you look through the lenses of what’s going on, with technology in our profession, it’s becoming more critical. Excellent. So this brings us to our next polling questions, the single multiple choice question. Nobody needs to type in anything else, we got the full complement, and then some another 15 or 20%, in all sources for our target there. So go ahead and answer this, we are focusing on the following and 2023. Everything from new technology, the last one on the screen is credit arrangements. So there’s also the staff upskilling listed there. So that’s an option for you to respond to. After you hit submit, while we wait for more responses to come in. If you look in the chat box, you can see that Brian has posted some Follow, follow things in LinkedIn, follow CPM file, which is a news media outlet that we acquired a year and a half ago. And run, that’s great for keeping up to date on news, and then the other strategic treasure on LinkedIn, you can follow that. And Brian will also be posting TD Bank in the chatbox. So please go ahead and follow the items that we post there, it’s free, and it’s fun, it’s good way to stay connected. It’s at least free. I don’t know if it’s fun, but we’ll see how that goes. All right, if the areas of focus are there, and, Mike, I’ll start with you, you know, the focus the top focus areas, you can see our cost savings or efficiency, new tech, those are far and away the top items. Any any comments on any of the items here and or any guidance that you would offer?


Michael Gordon  38:23

Yeah, you know, this is this is in some ways not surprising this is when we’re talking to customers and companies about what’s important to them right now. So there’s a lot of innovation going on in technology, we’ve covered a lot of that. And there’s the expectation that more innovations coming our way in the banks or in the fintechs are providing a lot of of better solutions and better ways of doing business. And so the new technology, focus does not surprise me. The savings doesn’t either. From the perspective of I think that this is a little bit of a time where companies are dealing with is earlier the PPI comp question. I think that’s very relevant companies are looking at how they can be more efficient, how they can digitalize that’s been a phenomenon that started in the pandemic. And I think that transformation is still taking place. And it definitely is where companies are constantly evaluating how to lower those costs. And a lot of that has to do with the technology. So those two are pretty closely related to me together, excuse me. And so that’s what that’s the takeaway that I have from this.


Tom Gregory  39:34

Right, if you want to continue the dialogue on technologies.


Michael Gordon  39:40

Yeah, so this is, this is looking at a couple of different technologies. And we asked the corporates, which of the following technologies are using or interested in using in Treasury? And so this is if you look at it, the first takeaway is there’s a difference in the size of the companies. And this may not be surprising larger companies, they’re more complex. They have scale. When you look at the different technologies and how they’re employing them, or thinking of that, they have the scale, they have the resources, they have the IT staff to implement a lot of these solutions. And so it appears, if you look at the data that as you go further up the bubbles to medium and small companies, there’s there appears to be a lag there. And it may be there’s the intention of employing some of these technologies that haven’t done it yet. Or they’re just, they’re there. They’re just a further behind the track, if you will. So if we look at Application Programming Interface API’s, and the usage of those, it’s obvious, there are obvious reasons that these are sorts of popular. Now, this is what we’re seeing on the market. And companies want to integrate. So the connection between banks and the accounting system or the billing systems, API’s enable that to happen. There’s a lot of automation that they offer. And again, back to the earlier point, companies are looking to automate and digitalize as much as they can API’s are a big step in that direction. And then API’s off also offer an element of real time market and transaction data information. So it can provide a basis for making informed decisions and greater insights about how the companies want to run their business. And if you look at artificial intelligence, and you move to the right, Tom already mentioned, the phenomenon that’s going on off the last three months, with chat GPT. That’s an element of AI, it’s already very present in the banking system. Currently, a lot of companies are also leveraging it. But that’s an exciting technology for companies again, as they want to automate, make quicker decisions and have the the red the system of any friction and have better information to make informed decisions. So that’s not surprising. And then blockchain, one way that we we may interpret this is that the respondents see the potential in it, it’s not as far along as the others from a development perspective, perhaps. And also, there’s, I think there’s a little bit of there could be a learning curve there that that all organizations are going through small, medium, or large. But I think what I would take away from this is, there’s the recognized potential of leveraging a yet another helpful technology.


Tom Gregory  42:52

It’s I wanted to make sure we, we just remind the audience that small, medium and large here means small is below half a billion in annual revenues. Medium is between a half a billion and a billion. And large is a billion. So small, isn’t small business, it’s it’s small corporate, and, but still, this tells me a few things. One is API’s are really have hit the mainstream. And, and that happened pretty quickly, not many years. Before, you know, we’re seeing, you know, almost everybody is using ar, ar, ar are or are interested in using API’s in Treasury. The other thing that this tells me is that while there’s a little bit of, you know, lesser percentages, from large to small, they’re not that different from an order of magnitude, they’re pretty much the same. And and so those of us that have been in this profession and banking for a while, you know, we’ve we remember kind of a trickle down dynamic that things that large corporate use will ultimately make their way into the middle market and then into smaller business. And in the modern age, that may not be as true, it may be more kind of, there may be things that happen in the low end first and then make their way up or things that are relevant and useful to literally every size entity. But it does it is fascinating to me the degree of use or interest in use of these technologies. And I like to me the blockchain just speaks to that there’s not as much application as these others are at this stage in, you know, the world of how technology is maturing. Thank you, Michael.


Michael Gordon  45:18

You’re, so cash forecasting a little bit about this, we asked our respondents considering all the operations, what three areas do you spend most of your time on, and real quickly, cash forecast, and it’s been raining the top of the list for five years now. And it’s still one of the most time consuming things that the respondents or activities that the respondents spend time on. And I can tell you from real life example, a lot of this has to do with the use of prompt the proliferation of spreadsheets and, and other like Excel to manage cash flow and cash position both. So you can see why those may be time consuming events. And what’s also interesting about this data on the payment management side, there’s a decrease in the time that’s spent on this. And I think this speaks to the development of technology. Over time, we’ve gotten better at some of the more manual processes that we used to do around payments, and there are better tools available to us now. So there’s less time spent on that and more time spent on strategic activities. And with that, I’ll open it for further comment.


Tom Gregory  46:33

Interestingly, when we did that poll question a few slides ago, cash flow, cash forecasting didn’t really rise to the level of others, nor did developing staff over training the workplace. And, and it could be that there may be there needs to be some more focus on these areas. What what you’re right, Cash Forecasting, cash position management, these things have been these things have been more time consuming than other areas. And but in the past, managing payments and reconcilement. I like reconcile and I don’t like reconciliation. It’s a brings back my my Catholic school upbringing, but the payment managed look at look at how that fell off the cliff. Yes, last and you want, one might wonder if, during the pandemic, when Payment Management got even harder to do, because somebody had to go to the office and get the checks. And we’ve got to cut this out, we’ve got an electronic Fie, we’ve got to use the payments. And we’ve got to do things that don’t require physical presence and things of that nature. Could it be that these activities are now requiring less time in the scheme of things? Because of that, because companies were compelled to to utilize more efficient forms of payment, just just speculating here. But but but the data is pretty compelling. Without speculation. Excellent. So the next the next two slides cover several questions related to borrowing lending covenants on different credit facilities. So what have we seen here on the borrower side, they’ve always been focused on flexibility renewing credit facilities earlier. So there’s a little more runway in case there’s a tightening in the debt and capital markets, extended duration of borrowing. So the net difference between those that extended it and those that shortened it, still positive, but the top two items we’ve seen three years of the client, so that’s a decline and move away from what we’d consider diversification or you know, early renewals, those types of things. Supply chain leveraging that more 25% Pretty interesting, you know, the rise of supply chain financing has grown grown quite rapidly as another way to tap areas for liquidity, either direct borrowing or through the supply chain. So this is what borrowers are focused on. This next one, as we look at loan covenants, they’re more restrictive. On the left hand side, you can see that corporate and bank view corporate is green, and the bank view is blue. So look at that, you know, we expect loan covenants and restrictions to become more restrictive 40% of corporates 68% of banks, I think I’m gonna lean on the banks of the more Havelange because they’re looking at their whole portfolio. But you can see that tiny, less restrictive, it’s definitely not that case. And so this is a shift. Over the last three years, you’ve seen the shift of less restrictions, to way more restrictions, and the balance of power shifting towards the lenders, that’s not a great term for it, that’s what I refer to it as it’s more favorable if you’re a lender than if you’re a borrower. Now, whereas it had been the pendulum was over on the borrowing side earlier. And then the we expect loans over the next year to favorite lenders, even even Thai for banks and corporates 60 or so the lower 60% of the unit favorite lenders, and just around eight to 11% thinks it favors the corporates or the borrowers on that side. You know, it’s interesting depends on your particular situation, your credit, quality, even size, the organization matters. So this is an era of let’s just say tightening, tightening credits with with restrictions, and moving away from this period of almost unlimited free cash environment that we’ve been operating under in a macroeconomic environment for some time. So that’s shifting. Keep moving us ahead to the poll question. And this is this is a double stacked poll question. Because you’re smart and can handle so the top one is a select one item, what’s your greatest fraud risk over the next 12 to 24 months, next year to two years. And then we use the following controls. So this is this is definitely paying homage to the fraud and security section, which we’re going to talk about after this as you might imagine, so go ahead and fill that out. There’s no need to type anything in the chat box for to get the results because we’re well over it. And then we get back. Tom, I’ll let you take the top one. And then Michael, take the bottom line, they will have to love to speak fairly quickly, just from a time perspective. So you’re limited to 50 seconds. What do you find? We got to see a bar chart or a we are as soon as Brian notes that we’ve gotten several 100 or so responses for that. You guys fill it out and then enter the top one is one and the bottom question is you can select as many as apply. And if I had a nickel for every time Craig Jeffery told me to go faster, I’d have a lot of nickels.


Craig Jeffery  52:50

I was trying to say gently that we have to we have to finish on time. Right. Yeah, and in the chat box Brian has listed the download the infographic and survey and Tom, you’re up.


Tom Gregory  53:02

Look at that BBC. still number one. I’m going to talk about this in a sec. But this is nothing new. But it’s it’s telling us that business email compromise is trumping. Ransomware not sure if there’s a you know, that’s a good thing or a bad thing. But But yes, cyber fraud overall. I’m glad they are I think the greatest fraud risks and you know have been will continue to be Thank you


Craig Jeffery  53:48

Michael, do you want to cover the bottom?


Michael Gordon  53:50

Yeah. Well, I see the next results.


Craig Jeffery  53:55

I think you have to slide down your your screen may be small if you pull the elevator bar on the right hand side the the top item.


Michael Gordon  54:06

Yeah, you know, what’s, what’s good here is the the employee education which is so important, we’ll say that human firewall, we see that as the biggest one of the greatest vulnerable, vulnerable spots with respect to managing risk data protection policies. A good glad to see that I know banking, this is a we’re regularly tested on that and and challenged about how we protect data, all kinds of data, digital, all data, and then account payment. Validation. can’t emphasize enough we talked about email, business compromise. And a lot of times that what that is what gets interrupted quite frequently is the payment terms defense. or information, that sort of thing. I think this is speaking to that. So these results, don’t surprise me. And I’m glad to see that employee training is receiving high grades.


Tom Gregory  55:11

And I think Tom will be commenting on the human firewall now. I think that, I’d like to say congratulations, and thank you to those respondents, not only of the survey, but of that, that q&a, where there is awareness there is training. The banks all are very, very diligent in requiring training and testing and holding colleagues at the work they’re accountable to, to act like risk managers, corporates need to do that, too. I know I’m preaching now. But the survey data over the years has indicated that corporates are coming a long way, in training, and in, in, in the content that they’re training on. That, you know, it’s more than just cyber hygiene, and looking at email addresses and not LinkedIn, not clicking on links. But being able to spot the different potential suspicious activities, doing basic things like trust, but validate and, and never change and account number without there being sufficient authentication of the person requesting that the account number be changed. So I think that this is a pretty I think encouraging, but still much more work to do. For the corporates on the phone, the the the business, email compromise, are things that your banker cannot protect you from, you can only protect yourself from those things. And, and so if if we all band together and understand that we are all we all play a part in protecting our company’s assets, protecting the payment systems, then we’ll we’ll win in this game against the criminals. They’re not fraudsters. They’re bad criminals. Thank you.


Craig Jeffery  57:37

I could give Tom a nickel every time he said that I’d give him a lot of nickles. And so on the takeaways, we’re gonna start with Mike, then I’ll fill in the middle. Tom will take us away for the takeaway. So go ahead, Mike.


Michael Gordon  57:49

Yeah, I missed a little bit of this discussion. So it may be somewhat repetitive. But clearly a takeaway is the enthusiasm around innovation and where we’re headed. With with, with innovation, security and speeds still topped the charts. That’s clearly a takeaway security. Hopefully, it will stay there for a while. That’s obviously very important, but the way we address risk will will change as we go forward with some innovation, streamlining payments, we’ll see a lot of that was looking to do more with less and everything from managing payment data, managing the payments themselves, there’s a lot of opportunity to digitalize that process. And so clear takeaways. Here, there’s one of the positives from this survey is a clear nod towards innovation and technology as an answer for companies to be more efficient and run and run themselves better.


Craig Jeffery  58:46

Great, thanks, Mike, in the middle section is tighter borrowing is borrowing is going to cost more, and it’s going to be harder to secure capital, not for every single company, but for many organizations in all sectors, depending on several different factors. So the opportunity there is to examine the entire cash conversion cycle. Your banks and fintechs have opportunities to help that bank certainly on the credit side and on the process. The other area, though, are results of this particular poll question not just the survey showed that cash forecast may not be as high with this particular group. This is an area where most of the time is spent and it’s a big area of focus represents, you know, opportunities to identify where you may have some tightening and then you need to look for some of those levers. So the cash conversion cycle is one such lever to be able to adjust what’s occurring not just to see what’s occurring. And Tom.


Tom Gregory  59:45

Yeah, well I want to just be sorry, I have a chance to say just say to everyone on the line. Thanks for dialing in. I I consider you all to be kindred spirits in this treasury profession. And that’s a that’s a fancy way of saying friends. So thank you friends. And I love this tradition that we do with Craig and his staff at strategic treasure. With the survey. It’s a really pleasure and an honor to do this. And if we, if we continue to do this for the next 100 years, I have a feeling that there will always be a third box that says payment security on it. Now, hopefully, we’ll be a whole lot more buttoned up there. But But I love that, that we’re we’re now calling it things that it’s more than cyber security. It it’s more than cyber hygiene. It is essentially risk mindedness and risk management, and making sure that people embrace that as much as they embrace placing value on creating a great customer experience for whatever business you’re in. Right. That is, that is something that every colleague should obsess over, creating great customer experiences, but also protecting the company’s assets so that it can can continue to create great customer experiences. Thank you. Excellent. Thanks, Tom. And I’ll turn it back over to Brian. There’s the ability to download the infographic and survey and thanks, Mike, Tom, and everyone, Brian.


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