The COVID crisis has been a painful reminder to companies that access to liquidity is a matter of survival. But beyond that, it demonstrated the degree to which transformations in the world of Corporate Finance have disrupted the management of liquidity and demanded new approaches. CFOs must come to grips with this new reality if they want to help their companies benefit from the key differentiator, which is now liquidity management. But they will need new tools to accomplish this.
COVID has put a major strain on CFOs, who stand on the front line against the unprecedented challenges faced by their companies. At the same time as it highlights the crucial importance of the finance function within the corporate system, the crisis has uncovered disruption on a grand scale. Becoming aware of this, redefining the approach to liquidity and having the right tools to achieve this are a major competitive advantage.
We have seen four underlying trends that are transforming the corporate finance landscape:
- Market disruption
- Bank regulation and proliferation of fraud
- Going paperless
Apart from its long-term role as a fortress against stopped payments, continuous access to liquidity, its diversification, protection and optimisation has become a key aspect of competitiveness as well as a discipline in itself. In a scenario of hyper-volatility, across the minefields of fraud and compliance, in the jungle of international payment circuits, within a digitised, fragmented and highly specialised financial landscape, CFOs who adopt Active Liquidity Management will be the leaders of tomorrow. And to achieve this, they need the latest software tools and sophisticated connectivity infrastructures.