The role of treasury in supply chain finance (SCF)
This article is written by Liquiditas The treasury function plays a central role in supply chain finance (SCF), particularly in reverse factoring programmes, because it is responsible for managing liquidity, financial risk, and funding strategy across the organisation. As supply chains become more complex and capital markets more volatile, treasury’s involvement in SCF has evolved from a supporting role into a strategic control function. Modern treasury teams are no longer focused solely on cash execution. They act as gatekeepers of financial stability, ensuring that SCF programmes align with the company’s liquidity position, risk appetite, accounting treatment, and long-term financial objectives. When designed and governed properly, SCF can strengthen working capital management and supply chain resilience. When poorly managed, it can introduce hidden risk. The role of treasury in managing liquidity and financial risks At its core, treasury is responsible for ensuring that the organisation has sufficient liquidity to meet operational obligations, including payments to suppliers and funding for growth initiatives. In the context of supply chain finance, this responsibility becomes more complex. Treasury monitors short-term cash positions while also managing long-term funding structures. This includes assessing how SCF programmes affect cash availability, payment timing, and liquidity buffers under different market conditions. Effective treasury oversight ensures that early payment solutions for suppliers do not compromise the organisation’s own financial flexibility. In addition to liquidity, treasury manages key financial risks that directly influence SCF performance, including: Through hedging strategies, diversification of funding sources, and continuous monitoring, treasury protects the organisation from financial volatility that could destabilise the supply chain. How the role of treasury can optimise working capital through SCF One of treasury’s most important responsibilities in SCF is working capital optimisation. Supply chain finance allows treasury to improve cash flow efficiency by better aligning payment terms, funding costs, and supplier liquidity needs. Treasury-led SCF initiatives may include tools such as reverse factoring and dynamic discounting, which enable suppliers to access early payment while allowing the buyer to preserve or strategically manage its own cash position. When implemented carefully, these structures can free up capital for investment without increasing operational risk. However, treasury must balance optimisation with discipline. Extending payment terms or expanding SCF programmes without considering supplier impact, disclosure requirements, or funding concentration can create long-term vulnerabilities. Treasury’s role is to ensure that working capital improvements are sustainable, transparent, and aligned with enterprise risk management. Key treasury activities in SCF Within an SCF framework, treasury is responsible for several critical activities that support both financial stability and supply chain continuity. Funding: securing and managing capital for SCF programmes Treasury is responsible for ensuring that sufficient funding is available to support SCF programmes. This involves determining the optimal mix of internal liquidity and external financing, such as bank facilities or capital market instruments. Treasury evaluates funding costs, maturity profiles, and counterparty exposure to ensure that SCF programmes remain cost-effective and resilient under changing market conditions. Ongoing monitoring of financial markets and internal performance allows treasury to adjust funding strategies proactively. By maintaining a robust and diversified funding structure, treasury ensures that suppliers can be paid reliably while protecting the organisation from overreliance on any single funding source. Risk management: assessing and mitigating SCF-related risks Risk management is one of the most critical aspects of treasury’s role in supply chain finance. Treasury must identify, assess, and manage a range of risks associated with SCF, including: Treasury establishes risk limits, monitoring frameworks, and escalation procedures to ensure that risks remain within the organisation’s tolerance. Importantly, treasury must also decide when to slow, restructure, or exit SCF programmes if risks outweigh benefits. Cash flow forecasting and scenario planning Accurate cash flow forecasting is essential for effective SCF management. Treasury uses historical data, current cash positions, and forward-looking assumptions to anticipate funding needs and liquidity pressures. Beyond baseline forecasts, modern treasury functions increasingly rely on scenario analysis and stress testing. These tools help assess how SCF programmes perform under adverse conditions, such as supplier distress, market volatility, or reduced access to funding. This forward-looking approach allows treasury to make informed decisions and maintain financial resilience. Governance, transparency, and accountability In recent years, supply chain finance has come under increased scrutiny from auditors, regulators, and investors. As a result, treasury plays a critical role in ensuring that SCF programmes are governed transparently and aligned with accounting and disclosure standards. Treasury is typically responsible for: Strong governance protects the organisation from regulatory and reputational risk and reinforces treasury’s role as a trusted financial steward. Benefits of treasury-led SCF programmes When treasury is actively involved, supply chain finance can deliver meaningful benefits across the organisation. Enhanced financial stability and liquidity Treasury oversight ensures that SCF programmes support liquidity objectives without undermining financial resilience. By optimising funding costs and maintaining adequate buffers, treasury helps the organisation withstand market uncertainty. Stronger supplier relationships Reliable and timely payments improve supplier confidence and stability. Treasury-led SCF programmes support healthier supplier ecosystems, which in turn reduce operational risk. Greater operational efficiency Integrating treasury processes with SCF platforms improves visibility, coordination, and decision-making across finance and supply chain functions. Real-time data enables faster responses to disruptions and changing conditions. Greater operational efficiency through integration Integrating treasury operations with SCF systems allows financial decisions to be made with a comprehensive view of supply chain dynamics. This integration supports better prioritisation of payments, funding allocation, and investment decisions. With access to real-time financial data and analytics, treasury can respond more quickly to market changes, supplier needs, or liquidity pressures. This agility is increasingly critical in volatile economic environments. Final thoughts The role of treasury in supply chain finance has expanded significantly. No longer limited to cash execution and funding, treasury now serves as the strategic owner of liquidity, risk, and governance within SCF programmes. By optimising working capital, managing financial risk, and ensuring transparency, treasury enables supply chain finance to support operational resilience rather than introduce hidden vulnerabilities. In an environment of heightened scrutiny and uncertainty, an active and integrated treasury function is essential to ensuring that supply chain finance contributes to long-term stability and success. Join our…
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10 supplier management best practices and strategies
This article is written by our partner, SAP Taulia Supplier management is the term used to describe the processes of selecting and managing suppliers or vendors. It’s a hugely important element of operations for most companies, having a significant impact on costs, manufacturing, and cash flow. Getting the best performance from your suppliers, while also ensuring you’re contributing towards a stable long-term relationship, can pay off in meaningful ways. Knowing how to manage suppliers effectively is therefore of great importance. Supplier management is a multi-step process. Each stage can be optimized to unlock efficiencies that not only improve supply chain performance, but also strengthen overall operational health. These steps can generally be defined as: With poor supplier management processes, your business can face disruption due to late delivery, poor quality goods, inaccurate billing, data breaches, regulatory issues, and commercial and reputational risks. By adopting effective supplier management best practices, you can avoid these pitfalls and enjoy more robust relationships with suppliers. This can lead to greater supplier loyalty, better product quality, and lower costs. The following supplier management best practices and strategies can help you optimize your supplier management processes and get closer to achieving your business goals: 1. Set strategic objectives and establish KPIs Your supplier management objectives should be informed by business needs, with key considerations likely to include cost, supply chain efficiency and resilience. By using supplier key performance indicators (KPIs), you can gain valuable insights into how well your suppliers perform. Common KPIs include: 2. Adopt a centralized supplier management database A centralized and digitized supplier management tool is essential for businesses with complex and extensive supply chains. This can be facilitated by supplier information management (SIM) or supplier relationship management (SRM) solutions. SIM is a system or a set of processes that companies can use to capture, store, and analyze supplier data, thereby reducing the administrative burden and increasing the accuracy of data capture. SRM encompasses the processes a business can use to manage its suppliers and develop more productive relationships. 3. Improve your supplier risk assessment process Your supplier base can pose a range of significant risks to your business, such as the following: As such, it’s vital to assess supplier risk carefully during the supplier selection process and on an ongoing basis. By employing a suitable risk assessment process – and carrying out risk assessments regularly – you can guard against the possibility of future harm. 4. Strengthen your supplier onboarding process During supplier onboarding, it’s important that you obtain various information and documentation to complete all necessary compliance and risk assessments and register the supplier on internal systems. The supplier onboarding process should be as seamless and efficient as possible, as a positive experience can lay the foundations for a strong future relationship. In practice, however, onboarding is often labor-intensive and time-consuming. Onboarding best practices include automating wherever possible, maintaining a consistent approach and ensuring that supplier data is secure against breaches. 5. Segment your suppliers Placing suppliers into different segments or categories according to their importance to the business is one way you can improve your supplier management strategy. By identifying and prioritizing the most important suppliers, you’re able to focus on and strengthen those relationships that are most critical to the resilience of your supply chain. This has significant potential benefits for the overall success of your business in the long run. 6. Integrate automation and self-service By using SIM and SRM software to drive automation, you can achieve a range of efficiencies and cost savings, such as managing contracts in a single location, automating the onboarding process, and monitoring supplier performance in an automated way. Additionally, by offering suppliers self-service options, you may be able to delegate the task of inputting data – thereby reducing overheads and ensuring that supplier records are accurate, complete and up to date. 7. Streamline communication channels Clear and open communication channels are vital to building strong and lasting relationships with suppliers and ensuring supply chain resilience. You can take advantage of various tools to improve your communication with suppliers, including direct messaging and document-sharing tools. Taulia Collaborate, for example, allows suppliers to check on the status of invoices, with queries automatically associated with the relevant purchase order, invoice, or payment document. With conversations tracked in a systematic and centralized way, you can resolve issues with suppliers quickly and easily. 8. Assess supplier performance regularly Your business is directly linked to the performance of its suppliers. As noted above, you can use KPIs to monitor supplier performance against specific criteria and identify any cases where suppliers may be failing to meet agreed standards. If suppliers fall short of their performance targets, an assessment will need to be carried out. If the relationship is strong, it is more likely that poor performance can be tackled successfully. However, if suppliers continue to fall short of their performance targets, you may wish to renegotiate the contract or escalate the issue. 9. Prioritize strong supplier relationships Poor supplier relationship management can lead to poor communication, the breakdown of mutual trust and a mismatch of priorities, which can lead to difficult negotiations, the risk of a communication breakdown, and possible supply issues. Conversely, by prioritizing long-term supplier relationships – for example, by taking advantage of a sophisticated SRM system – you can improve operational efficiency and your supply chain resilience. 10. Formulate supplier management contingency plans Even the best-laid supplier management strategies can fail – so it’s important to anticipate potential disruption by having effective contingency plans. This may include detailing contingency suppliers that could be called upon to protect your business from supplier failure, together with key contacts and possible lead times. With proactive planning, you’ll be better able to protect your business from the consequences of supplier failure. Also Read Join our Treasury Community Treasury Mastermind is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill…
Treasury at the Speed of Business – Back Office No More: The Rise of the Command Centre
Written by Sharyn Tan (Views are my own) The future of treasury operations is undergoing a profound transformation, shifting from a traditional back-office function focused on static balance sheet management to a dynamic, always-on command center that orchestrates liquidity in real time. This evolution is driven by technological advancements, particularly the rise of stablecoins, tokenized deposits, and broader digital asset integration. These tools are enabling treasurers to manage not just cash positions, but the velocity of money, optionality in funding sources, and risk exposure instantaneously across borders and currencies. Historically, treasury departments operated in batches: end-of-day sweeps, periodic forecasting, and reliance on correspondent banking networks that introduced delays, high costs, and limited visibility. Today, with stablecoins like USDC and USDT surpassing hundreds of billions in market capitalization and annual on-chain transaction volumes in the trillions, treasury is becoming programmable and predictive. Fiat currencies, stablecoins, and tokenized deposits—digital representations of traditional bank deposits issued on blockchains—are coexisting in a seamless ecosystem. This allows for composable liquidity, where funds can be moved, converted, or deployed programmatically without intermediaries or settlement windows. Instant Visibility and Predictive Forecasting One of the most immediate benefits is real-time visibility. Traditional systems often provide delayed snapshots, but blockchain-based infrastructure delivers continuous, transparent ledgers. Treasurers can monitor global cash positions down to the second, track inflows and outflows automatically, and trigger actions like sweeps or FX conversions when balances hit predefined thresholds. This reduces idle capital buffers—2.5–4% in traditional setups can equate to tens of millions —and improves capital efficiency. Forecasting evolves from reactive to predictive. AI-driven tools analyze historical patterns, market data, and real-time flows to anticipate liquidity needs. For instance, systems can automatically rebalance across entities, optimize for yield on excess balances, or position funds closer to operational hotspots. In cross-border scenarios, stablecoins enable near-instant settlement (often in seconds or minutes), slashing costs and FX exposure compared to multi-day traditional wires. Liquidity as a Composable Network The core shift is viewing liquidity as a dynamic network rather than isolated pools. Stablecoins act as an interoperability layer, connecting disparate systems and enabling 24/7 operations. Tokenized deposits, issued by regulated banks, offer similar programmability while staying within the banking framework—often with deposit insurance and direct balance sheet integration. Reports indicate banks are increasingly favoring tokenized deposits for institutional use, as they plug into existing treasury workflows without disrupting regulatory treatment. This coexistence creates optionality: treasurers can choose the optimal form of money for each use case—stablecoins for fast cross-border payments, tokenized deposits for wholesale settlement, or traditional fiat for certain compliance needs. Programmable features, like smart contracts, automate complex workflows: conditional payments upon milestone achievement, automated collateral transfers, or yield-earning while funds are in motion. Challenges on the Path Forward Achieving this future isn’t just about adopting technology—it’s about building trust, interoperability, and cultural change. Treasurers must develop fluency in digital assets, including understanding blockchain mechanics, wallet management, and on-chain risks. Governance frameworks for programmable money are essential to mitigate smart contract vulnerabilities or de-pegging events, even as regulations like the U.S. GENIUS Act (passed in 2025) provide clearer guardrails for stablecoins, requiring 1:1 reserves and transparency. Interoperability remains a hurdle: not all blockchains or systems communicate seamlessly, necessitating standards and partnerships. Cultural shifts are equally critical—treasury teams historically risk-averse must embrace experimentation while maintaining robust controls. New ecosystem partnerships—with fintechs, blockchain platforms, and traditional banks—are vital for scaling. The Treasurer’s Strategic Imperative Ultimately, the future of treasury isn’t about going digital for novelty—it’s about accelerating decision velocity. Technology becomes a liquidity enabler, turning treasury from a pure cost center into a strategic partner to help drive business value. Treasurers who thrive will treat digital tools as extensions of their toolkit: optimizing velocity to free working capital, reducing borrowing costs, and earning yield on otherwise idle funds. Those who view these innovations as risk multipliers will lag, while forward-looking leaders will build predictive, composable operations that respond instantly to opportunities and threats. In a world of always-on global finance, the treasury command center isn’t a distant vision—it’s emerging now, redefining how organizations will manage money at the speed of business. Also Read Join our Treasury Community Treasury Mastermind is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.
AI in fintech: Separating the show from the work
This article is a contribution from our partner, Embat Theo Wasserberg, Head of UK&I at Embat Fintech’s AI moment in 2025 exposed the gap between demos and real impact. Operational AI, not pilots, is reshaping finance workflows and decision-making. At Google’s Gemini Founders Forum this year, they had a term for what happens when AI looks impressive in demos but never changes how work gets done: AI theatre. Finance and fintech teams know this performance well. They sat through it all year. The pilot that would “transform cash visibility.” The dashboard that would “revolutionise forecasting.” The platform that would “finally connect everything.” Exciting presentations. Polished decks. Then back to hunting through spreadsheets for yesterday’s cash position. 2025 wasn’t the year AI-infused fintech modernisation failed. It was the year we learned what separates the show from the work. What Actually Happened in 2025 2025 didn’t deliver the fintech AI revolution everyone predicted. Instead, we saw something more valuable: growing awareness of what modernisation actually requires. AI Pilots Are Easy, AI-First Workflows Are Not Teams stopped pretending AI deployment was simple. Painful experience helped people distinguish between “AI pilots” (exciting to demo, impossible to scale) and “AI-first workflows” (boring to build, essential to operations). Whether it’s payments, banking or treasury, everyone can list a dozen AI use cases they were pitched or watched a demo of. The challenge wasn’t innovation, identifying a problem on paper or imaginative solutions. It was turning the exciting demo into something banking operations, payment processing teams, and treasury departments could trust and use daily. Top-down AI mandates produced impressive presentations that never changed how work got done. We learned that real progress happens when the people closest to the work can design and own their agents. The lesson: without the right infrastructure, AI can’t scale beyond the team that built it. The Board-Level AI Gap A recent Think & Grow report reveals that only 32% of UK startups and scaleups have AI expertise at board level, trailing the 40% of FTSE 350 tech firms that have appointed specialists. This gap risks stifling growth amid strong investor interest in AI. However, there’s a stark divide by company size. Scaleups with over £50m revenue are more than three times as likely to have AI expertise (50%) compared to their smaller counterparts (15%), though 32% of companies overall plan to make appointments in the next year. As fintech evolves toward AI-first workflows, board-level AI knowledge becomes essential to distinguish hype from scalable operations, ensuring startups maximise funding and compete effectively. Breaking the 30% Automation Ceiling For twenty years, finance automation followed the same principle: if X happens, do Y. That approach created value – automating maybe 30% of manual work – but it also created a ceiling [Deloitte Survey, 2024; McKinsey Report, 2024]. Real life rarely follows rules perfectly. A customer pays two invoices in one transaction. Someone mistypes a reference number. A file format changes. Suddenly, the system freezes, and a human must step in. The promise of efficiency evaporates in exception handling. AI, by contrast, doesn’t require every rule to be predefined. It understands intent. You tell it the desired outcome, and it figures out how to achieve it. That’s the difference between 30% automation and 99%. It’s also the difference between a system that merely saves time and one that transforms how finance operates. The real breakthrough in 2025 was understanding this wasn’t just incremental improvement. It was a different category of capability. The Contained Value Breakthrough One of 2025’s most important lessons came from understanding what didn’t work, and why.Early AI mistakes involved treating it as a cosmetic upgrade atop legacy systems. Teams that succeeded took a different approach: contained value. Contained value means specific, auditable use cases where you know what AI will do, who it serves, and how success will be measured. Not “transform X process or industry.” Instead: automate reconciliation first, then forecasting, then cash visibility. This builds confidence, one use case at a time. The teams that flipped from cost centre to strategic partner did so by making AI agents accountable for specific outcomes. Not vague efficiency targets, but measurable work removed: reconciliation time cut by 75%, forecasting accuracy above 90%, audit prep compressed from weeks to days. They stopped talking about AI strategy and started retiring manual processes. They killed familiar workflows when data showed better paths, even when it made people uncomfortable. We Watched Finance’s Role Fundamentally Shift Something deeper was happening beneath the surface of failed pilots and stalled initiatives. Finance itself was evolving. In a revealing shift, HSBC found that 64% of CFOs at large organisations now consider treasurers part of the C-suite, reflecting a mindset change: finance is no longer viewed purely as a cost centre, but as a catalyst for insight and strategic agility [HSBC Corporate Risk Management Survey, 2024]. This wasn’t just finance functions – whether treasury, payments operations, or banking teams – getting better at their traditional tasks; they were becoming something entirely different. Digital adoption is central to solving this challenge: 80% of CFOs expect digital tools to dominate operations by 2025, while 30% of finance tasks are fully automatable [Deloitte Survey, 2024; McKinsey Report, 2024]. By modernising tools and processes, companies can both attract top talent and unlock productivity gains.Over the next five years, 69% of CFOs expect greater emphasis on data analytics, 60% anticipate more scenario planning, and 55% say finance will become a more embedded strategic partner across the business [Cherry Bekaert CFO Survey, 2025]. But you can’t advise strategy while drowning in exception reports. The Real Shift Isn’t Technical What 2025 ultimately revealed is that modernisation isn’t a technology contest, it’s a cultural reckoning. Finance operations are not evolving just because the new tools are powerful. They’re changing because leaders finally confronted how much of their operating model depends on institutional memory, heroic manual work, and processes that only “function” because people quietly filled the gaps. Modernisation begins not when teams deploy agents, but when they stop accepting complexity,…
ISO 20022 for corporates: the change you can’t ignore (even if you’d like to)
From Treasury Masterminds ISO 20022 is one of those initiatives that sounds like a banking problem… right up until it quietly lands on the corporate desk. Treasury, finance operations, IT, ERP teams, payments, compliance. Congratulations, you’re all invited. SWIFT’s ISO 20022 migration replaces legacy MT messages with MX (XML-based) messages. Banks are doing most of the heavy lifting, but corporates still need to pay attention. This change affects payment data quality, reconciliation, investigations, compliance, and yes, costs. This is a corporate-focused, neutral view. No hype. No fear-mongering. Just what matters. So what is actually changing? In very practical terms: MX messages can carry more detail: structured addresses, party roles, identifiers, remittance data. That’s a good thing. Until that rich data gets squeezed back into MT during translation and information gets truncated or lost. So no, this is not “just a formatting upgrade”. It changes how reliably information travels through the payment chain. “But we’re a corporate, not a bank”. Why should we care? Because this affects daily treasury reality more than most people expect. Payments and rejections ISO 20022 introduces stricter structure and validation. If your ERP, TMS, or payment factory relies on creative free text, expect more noise. Reconciliation and reporting In theory, ISO 20022 improves reconciliation. In practice, many corporates still flatten everything into legacy fields internally. If your systems don’t store the richer data, the benefit disappears before it reaches accounting. Compliance and investigations Structured party data supports: But if messages are translated back to MT somewhere in the chain, key details can still vanish. The uncomfortable reality: coexistence and translation We are in the “messy middle” for a while. During the transition you’ll see combinations like: SWIFT offers translation services to bridge the gap. Helpful, yes. Perfect, no. Important to understand: This matters for investigations, audit trails, and operational confidence. What this means in daily corporate life ERP and TMS readiness Even if you don’t connect directly to SWIFT: “Let the bank handle it” only works up to a point. Vendor and customer payments High-volume payment runs amplify small issues. ISO 20022 increases consistency, but reduces flexibility. That’s a trade-off corporates need to manage. Investigations and exceptions Expect: Runbooks may need updating. Very important: check your pricing This deserves its own section because it’s easy to miss. During the transition, SWIFT applies additional charges for MT to MX conversion and translation services. Key points corporates should be aware of: Now the corporate twist:Most corporates don’t pay SWIFT directly. Instead, these costs can surface as: What to do now Ask your banks and connectivity providers one clear question: “Are there additional costs during the MT to MX coexistence period, and where do they appear in our pricing?” If the answer is vague, dig deeper. Silence is not the same as “no cost”. A simple corporate ISO 20022 checklist Use this as a sanity check, not a project plan. Data Systems Banks Operations Costs Final thought ISO 20022 is inevitable. For corporates, the real risk is not the standard itself, but drifting through the transition without visibility. The danger zone looks like this: The smart corporate response is calm and practical:understand your data flows, align systems, challenge your banks, and keep control over the pricing story. That’s not transformation theatre. That’s just good treasury. Also Read Join our Treasury Community Treasury Mastermind is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.
Key global trends shaping corporate FX hedging
This article was written in 2025 by our partner, MillTech In an increasingly volatile global economy, managing currency risk has become a top priority for businesses worldwide. As exchange rates fluctuate and financial pressures mount, firms are turning to FX hedging strategies to safeguard their bottom lines. This blog explores the key trends shaping corporate FX hedging in 2025, including the growing adoption of hedging practices and the impact of local currency movements on corporate decision-making. Hedging is crucial for tackling currency risk Why is hedging becoming more important for businesses? As financial uncertainty grows, an increasing number of businesses worldwide are taking proactive steps to protect themselves. In fact, 81% of companies across Europe, North America, and the UK are now actively hedging their currency exposure. Leading the charge is Europe, where a remarkable 86% of corporates are now hedging their FX risk—a dramatic rise from just 67% in 2023. This surge is likely driven by a combination of tangible market forces: rate differentials and sustained dollar strength have created persistent volatility, making it increasingly important for corporates to manage their FX exposure. What are the consequences of not hedging currency exposure? As market conditions continue to shift, 52% of businesses globally that don’t currently hedge their currency exposure are now reconsidering their approach. UK corporates are at the forefront this rethink, with 68% exploring new hedging strategies. What’s prompting the change? Most likely the financial consequences of inaction: three in four businesses worldwide have recently reported losses due to unhedged FX risk—underscoring the urgent need for more proactive and robust currency risk management. A cohesive approach to hedging strategies How consistent are hedging strategies globally? Corporate hedging strategies are demonstrating notable consistency across the globe. The average global hedge ratio is 48%, reflecting a broad alignment in hedging practices. Here’s a closer look at how different regions compare: When it comes to hedge duration, the variation is minimal, which further points to a uniform approach in managing currency risks: What do longer hedge tenors and consistent hedging strategies indicate? Longer hedge tenors typically indicate that firms are aiming to secure protection over an extended period, likely reflecting their efforts to gain stability amid a turbulent year for the pound. The limited variation observed in hedging strategies suggests that corporates globally are responding in a broadly uniform manner, adopting consistent risk management approaches as they navigate shared global uncertainties. How are domestic currency movements impacting businesses? Domestic currency movements are having a pronounced impact on corporates bottom lines, with 88% of firms globally reporting effects. North American firms have borne the brunt, with 92% citing challenges tied to a stronger U.S. dollar. How have trade tariffs affected currency movements? Tariffs imposed by the the Trump administration, alongside retaliatory levies from global trade partners, have added pressure to markets. These developments have disrupted markets and raised the cost of cross-border trade for both large and small economies. Interestingly, in the immediate aftermath of U.S. tariff announcements, the dollar has shown unexpected weakness—suggesting that the financial repercussions may initially be felt domestically before reverberating abroad. How have the euro and pound movements affected firms? Meanwhile, in Europe, 88% of corporates reported being affected by euro volatility. Similarly, in the UK, of firms felt the impact of a strengthening pound. However, there’s a notable difference in the consequences: Tighter lending criteria and heightened FX costs How is access to credit affecting corporates? Access to credit has emerged as one of the top concerns for corporates worldwide: “Tighter lending criteria is a common feature of turbulent economic times. If the average corporate earnings take a downturn, then lenders perceive a higher risk of defaulting on loans. This causes them to allow only the most creditworthy companies to borrow, particularly given higher interest rates. This tends to cause liquidity headaches and restricted investment opportunities.” Tom Hoyle, Head of Corporate Solutions at MillTech How have hedging costs changed for businesses? Another key trend impacting businesses globally is the rise in corporate FX hedging costs, with four out of five corporates reporting higher costs over the past year: Higher hedging costs demand a more proactive and considered approach from treasury teams, given that hedging decisions now carry more weight. CFOs must carefully assess their exposures, determine their hedging capacity, and be sure to choose the right financial instruments. Most importantly, they must strike a delicate balance between the rising costs of hedging and the potential risks of leaving exposures unprotected. Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in Treasury Management or those interested in learning more about various topics related to Treasury Management, including Cash Management, Foreign Exchange Management, and Payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.
The Complete Guide to EMIR: European Market Infrastructure Regulation Explained
This article is written by Kantox What is EMIR and Why Does It Matter? The European Market Infrastructure Regulation (EMIR) is a comprehensive regulatory framework enacted by the European Securities and Markets Authority (ESMA), which came into force on February 12, 2014. Its primary aim is to more tightly supervise the trading of over-the-counter (OTC) derivatives through controlled initiatives, ultimately to mitigate the possibility of another global financial crisis and minimize risks associated with derivative markets. EMIR requires that over-the-counter derivatives—including interest rate derivatives, credit derivatives, fixed income derivatives, and foreign exchange derivative transactions (forward contracts, options, and swaps)—must comply with its regulatory processes. This regulation has an extensive effect on both corporate organisations and financial institutions, though corporates often find adherence more challenging than banks and other financial entities. The Three Core Components of EMIR There are three main components to EMIR compliance: EMIR includes both financial entities (banks, building societies, pension funds) and non-financial entities (any businesses that use derivatives under EMIR’s remit, regardless of sector). Both parties in each transaction must comply with the protocol conditions required. Which FX Transactions Fall Under EMIR? FX Spot Transactions Crucially for many FX derivative users, ESMA has confirmed that spot transactions are exempted from EMIR’s remit. Spots are generally trades settled within two days of the transaction (T+2). The Central Bank of Ireland understands that “all FX transactions with settlement beyond the spot date are to be considered Forward contracts and therefore fall within the definition of a derivative as provided for under EMIR and will be subject to the reporting obligation.” FX Swaps and Forward Derivatives Swaps must go through the EMIR mandatory reporting stage. A swap is a contract between two parties, where an agreement for a series of specified future cash exchanges on specified dates is made. Forward contracts, where two parties agree to a future trade of an asset at an agreed price on a future date, must also comply with EMIR reporting obligations. The main difference between a swap and a forward is that a forward is one transaction on one agreed future date, whereas a swap is a sequence of agreed transactions on various future dates. Note: There has been some ambiguity regarding the definition of forward contracts, particularly FX forwards. ESMA sought clarification from the European Commission on this matter. UK and EU Conflict Over EMIR FX Forwards In the UK, due to differences in how the Financial Conduct Authority interprets the EU definition of “derivative,” there has been uncertainty about whether foreign exchange forwards would be exempt from EMIR in the UK. However, as the EU classifies FX forwards as a “predominant risk,” it is expected that the UK will eventually align with EU requirements. The EMIR Compliance Checklist: Step-by-Step Guide To ensure full compliance with EMIR requirements, particularly the reporting component, follow these steps: 1. Obtain a Legal Entity Identifier (LEI) for each entity ESMA uses Legal Entity Identifiers to distinguish between different derivative users. You must obtain an LEI for your company from an authorized issuer. For more information, visit the LEI ROC website. 2. Identify all your derivative transactions This step is imperative in distinguishing which of your derivative transactions fall under EMIR’s remit. 3. Identify what EMIR stages each derivative class is subject to Determine which derivatives are subject to all three EMIR components (clearing, risk-mitigation, and reporting) and which are subject to reporting only. 4. Exchange data with counterparties For each derivative transaction under EMIR, both parties must fulfill the requirements. Obtain all pertinent information on your counterparties, such as their LEI, and provide them with your information. 5. Clarify UTI generation Each transaction requires a Unique Transaction Identifier (UTI), generated by one of the two counterparties. Discuss in advance who will generate the UTI for each transaction. 6. Decide how to manage EMIR reporting Your company can handle reporting internally or outsource to a third-party service provider. Many financial service providers offer complete EMIR reporting and advisory services to clients. 7. Select a Trade Repository (TR) Choose which of the six ESMA-approved Trade Repositories you will report to, based on your specific needs. Complete all necessary implementation steps once confirmed. 8. Begin the reporting process Start reporting either via a third-party service or through self-reporting. Understanding Trade Repositories Under EMIR A fundamental part of the EMIR framework includes the obligatory reporting of all applicable derivative transactions to registered Trade Repositories. TRs are entities that compile and store derivative transaction data in a continually updated database. Their importance in European financial regulation is attributed to the recognized need for improved transparency and reduced financial systemic risk. Current ESMA-Registered Trade Repositories: Selecting the Right TR for Your Business When choosing a Trade Repository, consider: The Impact of EMIR on Businesses EMIR’s main impact on entities trading FX derivatives is the significant costs and time spent on implementation and continual compliance. Another considerable challenge is understanding the specific requirements for each type of FX derivative transaction due to ambiguity in EMIR’s stipulations. For many businesses, especially non-financial entities, compliance can be resource-intensive, potentially diverting attention from core business activities. However, these measures are designed to create a more stable and transparent derivatives market, which should benefit all participants in the long term. Conclusion: Preparing Your Business for EMIR Compliance EMIR will undoubtedly have an extensive effect on your organization if you trade derivatives. Being properly prepared and understanding the requirements is essential to ensure smooth compliance and avoid potential penalties. For businesses looking to navigate EMIR requirements efficiently, consulting with financial compliance experts or partnering with service providers who offer EMIR compliance services can significantly reduce the burden of implementation and ongoing reporting obligations. This article combines information on EMIR and provides a general overview of EMIR requirements as of May 2025. For the most current regulatory information, please consult with financial compliance professionals or regulatory authorities. Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in Treasury Management or those interested in learning more…
Şişecam issues first Working Capital Note™ under multi-million dollar facility, launching new phase of liquidity strategy
This is a Press Release from our Partner, ETR Digital London / Istanbul – January 21st Şişecam, the specialist glass and chemicals manufacturer, has completed the issuance of its first Working Capital Note™ (WCN) under a multimillion-dollar working capital facility. The transaction took place on 30 December 2025 and was financed by İşbank, issued via the Faturalab platform and enabled by ETR Digital’s award-winning Flownote™️ technology. It represents the first live use of this structure within Şişecam’s treasury operations and establishes the framework for further issuances as the programme scales. WCNs are digital instruments designed to help buyers optimise payment terms while delivering faster and fuller settlement to suppliers, compared to traditional invoice finance. Backed by verified trade and invoice data, WCNs delivered through Flownote™️ provide a more flexible and efficient alternative, particularly for multicountry operations. Barış Gökalp, Treasury Director at Şişecam, said: “Şişecam operates within a highly dynamic structure shaped by multiple markets, a broad and diverse supplier ecosystem, and varying payment terms. To manage our working capital more proactively across this complex landscape, we were looking for a scalable and modern financing instrument. Working Capital Notes provide exactly that — a flexible, data-driven solution that aligns with the way our global business operates. This inaugural issuance marks only the first step; we expect the program to expand significantly in the coming period as we continue to embed this structure across our international footprint.” With 43 production facilities in 12 countries and a global workforce of over 23,000 employees, Şişecam collaborated closely with its banking and technology partners to deploy the WCN structure rapidly and reliably, demonstrating how effectively the instrument can function in real operational environments. Volkan Guran, Director of Corporate & Trade Finance, İşbank London, commented: “We are delighted to work alongside Şişecam, Faturalab and ETR Digital in pioneering working capital innovation. From a bank’s perspective, the WCN structure is compelling because it combines legal certainty with high-quality, verified data. It allows us to support Şişecam using a familiar risk framework, while benefiting from the efficiency and transparency of a fully digital instrument.” The WCN was structured and executed through Faturalab, which acts as the orchestration layer between corporates, banks and digital instrument infrastructure. By embedding the instrument directly into existing accounts payable workflows, Faturalab enables scalable deployment of digital working capital solutions with minimal operational friction. Emre Aydin, CEO, Faturalab, said: Manufacturers have traditionally struggled to access affordable working capital finance, especially in the Turkish market. Thanks to our partnership with ETR Digital, Faturalab now enables approved invoices to be converted into digital instruments that banks and other funders can finance in real-time. Şişecam has proved this works in practice, with the whole project being delivered in just 10 working days. Kudos to Baris and his team for blazing the WCN trail – other corporates and SMEs across the globe can now deploy the same scalable solution.” Dominic Broom, CEO, ETR Digital, added: “Şişecam’s leadership has shown what’s possible when treasury teams embrace innovative digital technology like Flownote to solve real-world liquidity challenges. WCNs are relatively new to the treasury toolkit, but they enable companies to optimise their working capital and finance 100% of the instrument value, while giving them immediate access to deep pools of liquidity on an as needs basis. We look forward to working further with Şişecam and our partners in 2026, as well as helping more companies to unlock value across global supply chains in a way that’s scalable, practical, secure, and affordable.” Additional WCN transactions are expected in the coming months as Şişecam continues to roll out the facility across its international operations. Patrick Kunz, Treasury Masterminds Founder/Board Member, added: Working capital & trade finance are two of the last tasks in treasury to digitalise and automate. It was dependent on paperwork or manual upload/transfer of documents. With these notes, it will be easier for companies to turn company-specific invoices and trade into standard financing instruments. Easier for banks to issue and finance. Both locally and later also internationally. I hope to see more such deals in the future. Opening up the market for more trade and working capital financing, not only for big multinationals with complex structures and strong creditors. Great trend, worth following. Notes to Editors About Şişecam: A global industrial group specialising in flat glass, glassware, glass packaging and chemicals, Şişecam is headquartered in Türkiye. The company has 43 production facilities in 12 countries and sells to customers worldwide across a wide range of industrial and consumer markets. About İşbank: Türkiye’s largest private bank, İşbank provides corporate, commercial and trade finance services to clients across domestic and international markets. About Faturalab: Faturalab is a working capital and supply chain finance platform that embeds digital financing tools into operational workflows, connecting corporates, suppliers and financial institutions. About ETR Digital: ETR Digital is a UK-based fintech specialising in digital working capital finance. Its Working Capital Note™ solution enables companies to enhance liquidity, reduce operating costs, and improve EBITDA by optimising working capital. Source: Şişecam issues first Working Capital Note™ under multi-million dollar facility, launching new phase of liquidity strategy Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below. Notice: JavaScript is required for this content.
Can Stablecoins Fix FX Risk?
Written by Sharyn Tan (Views are my own) Stablecoins are often positioned as a breakthrough for cross-border payments and treasury operations. By enabling near-instant, programmable settlement, they dramatically shorten settlement times — and with that, surely too the window for foreign exchange (FX) risk. But here’s the harder question: Similar to liquidity traps, do stablecoins actually eliminate FX risk — or do they also simply move it somewhere else? The answer, unsurprisingly, sits somewhere in between. Where stablecoins could help: FX risk compression In traditional finance, FX risk largely arises from time — the gap between when a transaction is initiated and when it finally settles. That gap can stretch from days to weeks, especially across borders, and hedging it adds cost, complexity, and operational overhead. Stablecoins materially improve this dynamic. By settling transactions in seconds rather than days, they compress FX exposure windows to near zero for many use cases. This could be especially powerful in: Recent developments — such as atomic swaps between USD stablecoins and local-currency variants — go a step further. By ensuring payment-versus-payment execution on-chain, they eliminate settlement risk in the classical sense. From a treasurer’s standpoint, this is not as frequently cited (yet) as a benefit of stablecoins. It won’t just be moving money faster — stablecoins could meaningfully reduce transactional FX risk. Where FX Risk Doesn’t Disappear — It Evolves That said, FX risk doesn’t vanish just because settlement is instant. It reappears in different forms, some of which are less familiar — and potentially harder to manage. 1. Conversion and On/Off-Ramp Friction Despite experimentation with non-USD stablecoins, the ecosystem remains overwhelmingly dollar-centric. For non-USD users, FX exposure still exists at the edges: These ramps introduce slippage, fees, timing risk, and liquidity constraints — especially in thin or volatile currency pairs. For treasurers managing true multi-currency portfolios, this may mean FX risk is reduced, but not eliminated. 2. Depegging as “Synthetic FX Volatility” Stablecoins introduce a new risk that looks suspiciously like FX volatility: depegging. Even well-capitalized, regulated stablecoins have experienced temporary dislocations during periods of stress. When confidence in reserves or issuers wavers, a stablecoin can trade below par — functionally equivalent to a sudden currency devaluation. From a treasury lens, this matters…. a lot. A depeg behaves like FX risk in disguise: the asset you assumed was stable suddenly buys less than expected, precisely when liquidity matters most. 3. Structural FX Effects at the Macro Level At a systemic level, widespread use of USD-pegged stablecoins can accelerate currency substitution, particularly in high-inflation economies. While this protects individual users, it can: For global corporates, this introduces second-order risks — regulatory, political, and operational — that don’t appear on a simple settlement cost comparison. The core insight: FX risk isn’t solved by faster payments alone. Stablecoins are exceptional at compressing time-based FX exposure, but FX also depends on: Today, those still largely sit with banks. Open stablecoin networks excel at programmability and settlement. Banks excel at FX pricing, balance sheet strength, and compliance. If these two worlds remain separate, FX risk simply shifts — it doesn’t disappear. What would actually “fix” FX risk? A credible digital FX future would require: Treasurer’s Verdict Stablecoins don’t eliminate FX risk — they significantly compress it for the right use cases. For USD-centric flows and high-friction corridors, the benefits are already tangible. For truly global, multi-currency treasury operations, stablecoins are a powerful component of the solution — but not the whole answer. The real breakthrough won’t come from stablecoins alone, but from hybrid FX infrastructure — where banks and open networks interoperate to deliver speed and depth, automation and trust. That’s where FX risk stops being merely shifted — and starts being structurally reduced. Also Read Join our Treasury Community Treasury Mastermind is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.