Scribd
Upload
38 views4 pages

GROUP 1-MANUSCRIPT

The document provides an in-depth overview of treasury management, detailing its definition, importance, historical evolution, and modern trends within financial institutions. Key functions include cash management, risk management, and investment management, emphasizing the need for effective practices to ensure liquidity and maximize returns. It also highlights the impact of technological advancements and the challenges faced in treasury operations, such as cybersecurity risks and talent gaps.

Uploaded by

Jimmy Loja
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
38 views4 pages

GROUP 1-MANUSCRIPT

The document provides an in-depth overview of treasury management, detailing its definition, importance, historical evolution, and modern trends within financial institutions. Key functions include cash management, risk management, and investment management, emphasizing the need for effective practices to ensure liquidity and maximize returns. It also highlights the impact of technological advancements and the challenges faced in treasury operations, such as cybersecurity risks and talent gaps.

Uploaded by

Jimmy Loja
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

Republic of the Philippines

CAPIZ STATE UNIVERSITY


BURIAS CAMPUS
Burias, Mambusao, Capiz

COLLEGE OF MANGEMENT

MARY GRACE F. VALGUNA JIMMY A. LOJA JR.


WENNIE V. VIPINOSA Course Facilitator
LORGEN N. OSETA
ROSELYN T. REBAÑO
BSBA IV FM Students / Reporters

FE 103 – TREASURY MANAGEMENT

Introduction to Treasury Management


I. LEARNING OBJECTIVES
The primary goal is to offer an in-depth understanding of treasury management, including
its roles, development, and optimal practices within financial institutions.
By the end of the lesson, students will have cultivated and/or improved the following
skills and outcomes:
1. Investigate the meaning and significance of treasury management.
2. Examine the historical progression of treasury management practices.
3. Assess contemporary trends and technological innovations in treasury operations.
4. Investigate the obstacle faced in treasury management and potential future
improvements.
II. INTRODUCTION
Treasury management serves as a vital component of financial institutions, emphasizing
the efficient management of financial resources. As organizations navigate complex financial
landscapes, the treasury function ensures adequate liquidity, mitigates risks, and maximizes returns
on investments. This report delves into the definition and scope of treasury management, its
historical evolution, current trends, and the associated challenges, providing insights crucial for
both practitioners and scholars in the field.

III. CONTENT

i. DEFINITION AND SCOPE OF TREASURY MANAGEMENT

Treasury management serves as a cornerstone in the operational framework of financial


institutions. It encompasses the strategies and activities required to effectively manage the
organization's financial resources, aiming to achieve a balance between risk and return while
ensuring liquidity and long-term solvency.

1 of 4 / Prepared by: Group 1


FE 103 – Treasury Management

The key functions within treasury management include:


 Cash Management- This involves monitoring and optimizing cash flows to ensure
adequate liquidity for daily operations and short-term obligations. Effective cash
management includes forecasting cash needs and resource allocation.
 Funding and Liquidity Management- This area focuses on sourcing and managing funds
to fulfill organizational requirements, ensuring the institution can meet both immediate
and long-term financial obligations without disruption.
 Risk Management- Treasury management requires identifying, assessing, and mitigating
financial risks, such as market volatility, credit risk, and operational challenges, to protect
the institution's assets.
 Investment Management- Managing investment portfolios involves making strategic
decisions on asset allocation and continuously monitoring investment performance to
maximize returns on financial resources.
 Foreign Exchange and Commodities Management- This function addresses the
handling of risks and opportunities related to currency fluctuations and commodity
prices, including hedging strategies to minimize exposures.
 Capital Management- Treasury professionals work on structuring and optimizing capital
to align with regulatory requirements and business growth plans.
 Regulatory Compliance- Ensuring that treasury activities adhere to relevant laws and
regulations is crucial for maintaining operational integrity and avoiding legal pitfalls.

ii. IMPORTANCE OF TREASURY MANAGEMENT

Effective treasury management is critical for the financial health of an institution. It plays
a vital role in:

 Ensuring Liquidity- Timely management of cash flows guarantees that the institution can
meet its obligations and invest in growth.
 Risk Protection- Through proactive risk management strategies, financial institutions can
safeguard their resources against unforeseen events.
 Maximizing Returns- By carefully managing investments, institutions can enhance their
earnings potential.
 Reducing Funding Costs- Strategic funding can lead to lower costs of capital and better
terms from financial partners.
 Increasing Operational Efficiency- Streamlined treasury processes contribute to
enhanced overall organizational performance.

iii. EVOLUTION AND TRENDS IN TREASURY MANAGEMENT

Historical Development of Treasury Management

The evolution of treasury management reflects changes in the financial landscape over
several centuries:

2 of 4 / Prepared by: Group 1


FE 103 – Treasury Management

 Early Days (1600s-1800s)- Initial focus was primarily on basic cash and foreign
exchange management.
 Industrialization (1800s-1900s)- Growth in financial instruments introduced additional
complexities, necessitating more sophisticated risk management practices.
 Post-WWII Era (1940s-1970s)- The emergence of multinational corporations created a
need for more complex treasury functions to manage global operations.
 Deregulation (1980s-1990s)- Financial liberalization enabled the automation of treasury
tasks, leading to improved efficiency and enhanced risk management capabilities.

Modern Trends in Treasury Management

Today’s treasury management landscape is driven by various sophisticated trends:

 Digitalization and Automation- Advancements in technology streamline treasury


operations, providing significant efficiencies
 Comprehensive Risk Management- Modern practices involve sophisticated strategies to
manage a wide range of financial risks.
 Enhanced Cash and Liquidity Management- Analytics and forecasting tools are utilized
to optimize cash utilization and forecasting.
 Funding and Capital Market Innovations- Financial institutions are increasingly
exploring alternative funding sources and strategies.
 ESG Considerations- Sustainability factors are becoming integral to funding decisions
and investment practices.
 Regulatory Compliance- A constantly evolving regulatory environment requires adaptive
strategies in treasury operations.

iv. IMPACT OF TECHNOLOGICAL ADVANCEMENT ON TREASURY OPERATION

The role of technology in treasury management cannot be overstated, providing


transformative benefits:
 Automation- Reduces manual intervention, enhances efficiency, and diminishes errors
in processes like cash management.
 Real-Time Visibility- Advanced systems offer immediate insights into cash positions
and risk assessments.
 Digital Payments- Speed and efficiency in payment processing have been
revolutionized through technology enhancements.
 Improved Risk Management- Technology enables better identification and mitigation
of risks, including fraud prevention and compliance monitoring.
 Optimized Cash Management- Analytical tools facilitate better liquidity
management and forecasting.

Despite advancements, treasury management faces significant challenges:

3 of 4 / Prepared by: Group 1


FE 103 – Treasury Management

 Cybersecurity Risks- Increasing digitalization exposes institutions to cyber threats.


 Integration Difficulties- Challenges arise from merging legacy systems with modern
technologies.
 Talent and Skills Gaps- A shortage of skilled professionals to handle modern treasury
functions is a growing concern.

Future directions for treasury management must focus on enhancing cybersecurity


measures, further integrating technologies, and investing in the continuous development of
treasury professionals.

IV. REFERENCES

Bessis, J. (2015). Risk management in banking. John Wiley & Sons.

CFA Institute. (2019). Treasury and cash management. In CFA Program Curriculum
2020. 155-184.

Deloitte. (2020). Treasury advisory services. Retrieved March 10, 2024,


from https://www2.deloitte.com/us/en/pages/finance/articles/treasury-advisory-
services.html

Federal Reserve. (2020). Treasury functions. Retrieved March 10, 2024,


from https://www.federalreserve.gov/pubs/feds/2020/20200315/treasury-functions.htm

Koch, T. W., & MacDonald, S. S. (2015). Bank management: Risks, returns, and
efficiency. Cengage Learning.

PricewaterhouseCoopers. (2019). Treasury function: A guide to best practices. Retrieved


March 10, 2024, from https://www.pwc.com/gx/en/services/risk-
assurance/assets/treasury-function-guide.pdf

4 of 4 / Prepared by: Group 1

You might also like