Treasury Contrarian View: Do We Really Need Treasury Centers in Every Region?

For decades, multinational corporations have established regional treasury centers to manage cash, liquidity, and risk closer to their operations. But with advances in automation, AI, and real-time banking connectivity, is the traditional regional treasury center model still necessary, or is it time for companies to rethink their treasury structures?

The Case for Regional Treasury Centers

  1. Localized Expertise and Market Knowledge
    • Regional treasury centers provide in-depth understanding of local banking practices, regulations, and economic conditions, which can help navigate complex financial landscapes.
  2. Time Zone and Operational Efficiency
    • Treasury teams operating within their respective time zones can react quickly to financial events, ensuring faster decision-making and execution of transactions.
  3. Banking and Regulatory Relationships
    • Maintaining local treasury hubs strengthens relationships with regional banks and regulators, facilitating smoother compliance and access to local financing solutions.
  4. FX and Risk Management

Managing FX exposures and liquidity on a regional level can reduce transaction costs and allow for tailored hedging strategies based on local market conditions.

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The Case for Centralizing Treasury Functions

  1. Advancements in Technology
    • Real-time payments, cloud-based Treasury Management Systems (TMS), and AI-driven analytics allow treasurers to manage global cash and liquidity from a single hub without the need for multiple regional centers.
  2. Cost Savings
    • Consolidating treasury functions into fewer hubs—or even a single global center—reduces operational costs, infrastructure expenses, and duplicative roles.
  3. Standardization and Control
    • A centralized treasury structure ensures consistent policies, risk management frameworks, and reporting standards across all regions, improving governance and efficiency.
  4. Greater Strategic Oversight
    • Centralizing treasury operations enhances global visibility into cash flows and exposures, enabling better strategic decision-making and financial optimization.

The Hybrid Model: A Flexible Approach

Rather than choosing between full decentralization or complete centralization, some companies are adopting hybrid models:

  • A single global treasury center with satellite teams for key functions (e.g., risk management, FX hedging, or compliance).
  • Regional treasury hubs that act as operational centers while strategic decisions remain centralized.
  • A mix of centralized treasury oversight with decentralized execution for region-specific transactions.

Let’s Discuss

  • Does your company still rely on multiple regional treasury centers, or are you centralizing operations?
  • Are regional treasury hubs still a competitive advantage, or are they becoming obsolete in the digital age?
  • What is the optimal balance between local expertise and centralized efficiency in treasury?

We’ll be sharing insights from treasury leaders and industry experts—join the conversation and share your perspective!

Ricardo Schuh, Treasury Masterminds board member, comments:

The hybrid model is the most effective treasury structure, as it balances regional agility with central oversight. Based on my experience, fully centralized models risk losing critical local expertise, while fully decentralized approaches may lack standardization and control. A hybrid approach ensures that regional treasury teams can respond swiftly to local financial challenges, regulatory shifts, and banking relationships while still adhering to a global strategy set by headquarters. This setup enhances efficiency, supports compliance, and allows for tailored risk management and FX strategies without sacrificing strategic alignment. Additionally, maintaining strong regional teams is crucial for fostering close and effective relationships with banks—there is no substitute for an in-person meeting when it comes to securing trust and ensuring smooth financial operations.

Moreover, technological advancements, such as AI and real-time banking connectivity, should complement rather than replace regional treasury hubs. While automation improves visibility and standardization, on-the-ground teams remain essential for navigating local complexities and ensuring quick decision-making in different time zones. A hybrid model optimizes costs by centralizing core functions like policy-setting and liquidity management while enabling regional execution for market-specific needs. This structure maintains strong internal controls while preserving the operational agility necessary for treasury teams to add value in a dynamic global environment. Finally, I would point out that having regional teams also helps in talent development and sourcing. 😉

Lorena Pérez Sandroni, Treasury Masterminds board member, comments:

Each approach has its own benefits and challenges. The decision should depend on the current stage of the Treasury departments in different regions. It is crucial to ensure local Treasury operations are maintained, as local knowledge, requirements from central banks, banks, and language barriers are key factors.
 
I am definitely in favor of achieving centralized control of liquidity management as soon as possible. This involves establishing proper minimum cash balances and working closely with Tax and Legal departments to create a structure that allows for the physical centralization of funds. From there, proper FX and risk management will be easier to centralize.
 
Only basic local operations should remain decentralized, and wherever possible, opportunities should be sought to rely on centralized liquidity (e.g., in-house banking). I am also a strong advocate for implementing advanced technology, where standardization and control can significantly improve liquidity management and data accuracy for decision-making.

Johann Isturiz Acevedo, Treasury Masterminds board member, comments:

Current news and context about USA imposing tariffs to countries (mainly Mexico – Canada and China ) and geopolitical discussions (Panama Channel and immigration) are showing that having a regional treasury center in a specific place is something serious to consider. Hybrid model and well detailed processes are key today. Below some takeaways as a must.

– A proper DoA – what can be done by local team and done by regional treasury centers.
⁠- Localization, is the regional center located in a country which can be impacted by sanctions or restrictions? Country risk assessment.
⁠- Cash management set up with local bank and corporate bank. Cash upstream policy is critical
⁠- FX risks, are the local team quick enough to share FX exposures to the risk management team in order to take decisions and mitigate FX risk ? Avoid volatilities.

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