Corporate Treasury Navigates on a Financial Rollercoaster

Geopolitical risks, economic sanctions and exchange rate volatility – it's not an easy situation for treasury experts today. 96% of them see cash and liquidity management as their top priority, and 80% see effective management of financial risks, according to a survey of more than 100 Hungarian treasury professionals conducted by PwC Hungary in 2024. In today's volatile financial markets, a treasury function that can adapt flexibly has a strategic role to play in managing corporate finance.

In recent years, the role of the treasury function has been significantly enhanced by events affecting the global economy, such as the new coronavirus pandemic, Russia's war in Ukraine and the energy crisis, which have created particular challenges in cash and liquidity management and financial risk management worldwide. Therefore, corporate finance required new approaches and successfully responding to unpredictable economic events required a strategic approach from treasury professionals, the survey results show.

"Uncertainty over energy supply, supply chain disruptions and an unstable business environment have forced companies to pay increased attention to liquidity and cash flow. The treasury function has become a key player in maintaining financial stability, managing short-term funding needs and minimizing liquidity risks," Péter Heronyányi, head of PwC Hungary's treasury advisory team, emphasized.

Cash and liquidity management is one of the top priorities and challenges for treasury professionals in 2025. The biggest challenge is to ensure that forecasts are accurate and that the treasury team has the right view of emerging exposures and free cash.

"There is a constant balance to be struck between ensuring solvency and optimizing returns. The latter is constrained by the company's investment rules for prudential reasons, while the former is difficult to predict accurately due to market volatility, rapid changes in the interest rate environment and the rhythmic settlement of customer invoices," György Mosóczi, an expert at PwC, points out.

"Today, there are a number of cash management solutions that can lead to efficiency gains, but what is the most appropriate for a given company depends on the company's needs, the number of group members, the geographical location or the currencies used," he adds.

Financial risk management, including exchange rate risk, commodity price risk, interest rate risk and credit risk, is the second most common task for 80% of treasury experts, but only 41% of those who completed the survey found it difficult. This is surprising because the processes involved are mostly manual, but respondents say they are adequately serviced.

Digital technology – AI and machine learning solutions – could support not only more efficient performance of day-to-day treasury tasks, but also the production of better-quality information, yet many still rely on manual processes. Only 28% of respondents to the survey use Treasury Management Systems (TMS), but 40% plan to implement such systems.

Treasury professionals currently see much more potential for efficiency gains in API connectivity, data analytics software and data visualization, as confirmed by PwC Hungary's 14th Hungarian CEO Survey, in which 80% of CEOs surveyed reported a clear efficiency gain from AI, and more than a tenth of companies reported revenue and profitability gains from the technology. 

The adoption of AI and machine learning solutions can not only contribute to more accurate forecasting, but also to better risk management and facilitate rapid response to changing market environments.

The treasury IT infrastructure is characterized by system-level support for managing bank relationships and transactions, but less than half of respondents have a direct (end-to-end) connection between their internal systems and their bank. Almost half of the respondents are able to initiate their bank transfers from ERP, but it is also common to record a transfer package manually on the electronic banking portal. At present, professionals see the greatest potential for improvement in the automation of payment processes, but many would welcome real-time transfers (instant payments).

Closely related to the treasury area are bank account management, other bank administration tasks and receivables management, which are generally satisfactory. However, 79% of the respondents have little or no local influence on the bank relationship, as this area is handled by a central treasury team within the group. Centralized banking relationships allow for collaboration at a strategic and transparent level, which can lead to better fee structures (cost being the deciding factor) and contribute to a unified financial infrastructure. 

66% of the respondents to the survey have a dedicated treasury department, typically with an average of six people taking into account all respondents, but it is typical for groups of companies to have a centralized treasury team, and many organizations still have an accounting and controlling function.