This thesis analyses different organizational types of corporate treasury in the view of digital transformation and new regulations and searches for the optimal centralization level of corporate treasury that can fully leverage the potential of new technologies like artificial intelligence, data analytics, robotic process automation, APIs and blockchain.
The main organizational types of treasury that are analysed and compared in this thesis include the fully decentralized treasury, hybrid forms of treasury organization, regional service centres and the fully centralized corporate treasury. Recent regulations that impact the work of corporate treasury are also discussed. A criteria catalogue, which puts together different criteria that impact treasuries’ performance closes the theoretical part of this thesis. The catalogue is based on theoretical explanations provided in this part and also on the practice of international corporations as different reports and reliable surveys show later in this thesis. The main part of the thesis (chapter three) describes the functionality of the main processes of corporate treasury. It is followed by the evaluation of the previously mentioned criteria for ‘cash and liquidity management’, ‘governance and risk management’ and ‘bank rela-tionships management’ as a comparison between a centralized and a decen-tralized treasury. After a transparent evaluation of the criteria for each of the above-mentioned processes, the elaboration of the concept of ‘in-house bank’ as an enabler of treasury centralization and possibilities for its imple-mentation close this chapter. The thesis concludes with the presentation of the idea of a digital corporate treasury, which leverages new technologies like artificial intelligence, robotic process automation, data analytics and blockchain. Possibilities and challenges that come with digital transformation of corporate treasury together with some tips for a transformation path close the analytical part. A short conclusion at the end summarizes the findings of this thesis.
Table of Contents
1 Introduction
2 Corporate treasury function and its management
2.1 Organizational types of corporate treasury
2.1.1 Fully decentralized corporate treasury
2.1.2 From decentralized towards the centralized treasury
2.1.3 Regional treasury centres
2.1.4 Fully centralized corporate treasury
2.2 Important regulatory aspects for the corporate treasury
2.3 Criteria catalogue for an optimal corporate treasury
3 Decentralized vs. centralized organization of corporate treasury
3.1 Cash and liquidity management
3.1.1 Decentralized cash and liquidity management
3.1.2 Centralized cash and liquidity management
3.1.3 Central vs. decentral cash and liquidity management
3.2 Governance and risk management
3.2.1 Decentralized risk management
3.2.2 Centralized risk management
3.2.3 Central vs. decentral risk management
3.3 Bank relationships management
3.3.1 Decentralized bank relationships management
3.3.2 Centralized banking relationships management
3.3.3 Central vs. decentral bank relationships management
3.4 In-house banks as an enabler of centralized corporate treasury
4 Future vision – digital corporate treasury
4.1 Digital corporate treasury – a technology ecosystem
4.2 Transformation path towards digital corporate treasury
5 Conclusion
Research Objectives & Topics
This thesis examines the optimal centralization level of corporate treasury within the context of digital transformation and modern regulatory requirements. It evaluates how companies can leverage new technologies to enhance control, transparency, and operational efficiency while balancing the needs of local subsidiaries.
- Organizational models for corporate treasury (decentralized to fully centralized).
- Impact of regulatory frameworks like Basel III on treasury operations.
- Performance optimization through cash, risk, and bank relationship management.
- Implementation of in-house banking and virtual account structures.
- The future role of digital technologies, including AI, robotics, and blockchain.
Auszug aus dem Buch
1.1.1 Fully decentralized corporate treasury
In a fully decentralized corporate treasury subsidiaries enjoy the highest level of independence from the headquarters regarding bank account management, foreign exchange transactions, customer credits, payables, borrowings and investments. As Cooper argues, “…in a true decentralized treasury, all treasury activities are carried out at the business unit or subsidiary level in the case of a domestic company, and in the case of an international company at the country level.” He shares the opinion that truly decentralized treasuries exist very rarely since some activities such as financing or foreign exchange translation management must be carried out centrally. However, some activities like management of liquidity and foreign exchange are left under the management of local units and subsidiaries. As advantages of a decentralized treasury Cooper mentions the belief that local units can react more closely and quickly to local needs and treasury activities can be carried out by people with knowledge of the local business environment. Another advantage is the autonomy and sense of ownership over treasury activities at the business unit or subsidiary level.
Summary of Chapters
1 Introduction: Provides an overview of the thesis scope, highlighting the shift towards centralization in corporate treasury driven by new technologies and regulatory demands.
2 Corporate treasury function and its management: Defines the core functions of treasury management and analyzes various organizational structures from decentralized to fully centralized models.
3 Decentralized vs. centralized organization of corporate treasury: Evaluates treasury processes (cash, risk, and bank relations) against specific criteria to determine the performance benefits of centralization versus decentralization.
4 Future vision – digital corporate treasury: Discusses the integration of emerging technologies like AI, RPA, and blockchain into the treasury ecosystem and outlines a transformation path for digitalization.
5 Conclusion: Summarizes findings, concluding that while no universal model exists, centralization coupled with digital integration offers the most significant advantages for modern corporate treasuries.
Keywords
Corporate treasury, treasury management, centralization, decentralization, liquidity management, risk management, in-house bank, digital transformation, artificial intelligence, robotic process automation, bank relationship management, cash pooling, virtual accounts, financial technology, corporate governance.
Frequently Asked Questions
What is the core subject of this thesis?
The thesis investigates the organizational structure of corporate treasury, specifically focusing on the trade-offs between decentralization and centralization and how these structures impact performance.
What are the primary themes discussed?
The work covers treasury organizational models, the influence of regulatory changes, the management of cash, risks and bank relationships, and the impact of digital innovation.
What is the research goal?
The main objective is to identify the optimal level of centralization that allows corporations to leverage modern technology effectively while ensuring control and transparency.
Which methodology is applied?
The author performs a comprehensive analysis of different treasury organizational types, utilizing a criteria catalogue to evaluate processes in centralized versus decentralized environments.
What does the main part of the work cover?
The main section evaluates specific treasury processes—cash/liquidity management, risk management, and bank relationships—to compare the effectiveness of centralized and decentralized approaches.
Which keywords characterize the work?
Key terms include corporate treasury, centralization, in-house banking, liquidity management, digital transformation, and financial technology.
How does the author define the role of in-house banks?
In-house banks are presented as a key enabler for centralization, serving as an internal finance entity that improves cash visibility, optimizes intercompany funding, and centralizes control.
What role do new technologies play in future treasury operations?
New technologies like AI, data analytics, and blockchain are seen as catalysts for "virtual centralization," allowing for better integration and real-time decision-making in a digital treasury ecosystem.
What are the specific challenges mentioned for centralization?
Challenges include potential loss of local flexibility, resistance from local subsidiaries, cultural differences, and the complexity of integrating diverse IT/ERP landscapes.
- Arbeit zitieren
- Tahir Lushi (Autor:in), 2020, Organizational types of corporate treasury. Digital transformation as optimization through (de)centralization, München, GRIN Verlag, https://www.grin.com/document/935823
