Treasury management includes various tasks such as managing liquidity, maintaining banking relationships, keeping records of cash balances and bank accounts, settling balances with automatic clearing houses and wire transfers, and forecasting future cash flows. The market has witnessed significant growth over the years owing to rising economic and financial volatility across various regions. This has compelled various organizations to adopt treasury management solutions to handle cash flows effectively. Treasury management solutions help businesses efficiently manage finances, reduce costs, ensure regulatory compliance, and mitigate financial risks. They provide services such as cash and liquidity management, payment and collection, risk management, and regulatory compliance.
The global Treasury Management Market is estimated to be valued at US$ 5.1 Bn in 2023 and is expected to exhibit a CAGR of 6.8% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
The heading refered to rising financial crises as one driver that is expected to flourish the treasury management market. In recent times, geopolitical tensions, rising inflation, tightening of monetary policies by central banks, and supply chain disruptions have increased financial instabilities globally. This has heightened the risks of economic recession or crisis. According to estimates, financial crises occur once every eight years on average. Treasury management helps organizations effectively deal with uncertainties arising from such crises through tools like cash flow forecasting and liquidity management. It allows businesses to make prompt financial decisions, control expenses, and minimize losses during turbulent times.
Another major driver is the ability of treasury management solutions to reduce costs for businesses. By automating repetitive tasks like payment processing, bank reconciliation, and transaction reporting, treasury management eliminates manual efforts and errors. It provides real-time access to cash position and enables faster transactions. This streamlines financial operations of organizations and lowers overhead expenses significantly. Automation with treasury management is estimated to save around 30% of costs for companies’ financial departments.
Segment Analysis
Corporate Treasury Management segment dominates the Treasury Management Market currently holding around 35% share. This segment manages liquidity,cash flows and risk mitigation for large corporates. The firms require sophisticated tools for cash pooling,liquidity forecasting, payment concentration etc across global operations.
Cash Management segment is the fastest growing segment expected to witness over 8% CAGR during the forecast period. Rising demand from SMEs for automated reconciliation,ACH payment processing and electronic payment tools is driving this segment’s growth. Cloud based solutions allow SMEs to adopt treasury tools at lower costs.
Pest Analysis
Political: Regulatory changes regarding payment formats and liquidity norms impact Treasury operations. Open Banking and PSD2 regulations expanded payment options and data access in Europe.
Economic: Economic uncertainty increases corporate focus on cash visibility,working capital optimization and risk management. Rising interest rates affect investment decisions.
Social: Digital native workforce adoption of fintech solutions drives demand for mobile treasury apps and APIs. Remote working increased reliance on cloud based treasury tools.
Technological: Advanced technologies like AI,blockchain and APIs are being applied to transform cash forecasting,liquidity planning and payments. Cloud adoption of treasury solutions is growing.
Key Takeaways
The Global Treasury Management Market Size witnesses strong growth opportunities across regions and segments. Treasury functions are becoming more strategic with increased compliance burdens and risk monitoring needs. The global Treasury Management Market is estimated to be valued at US$ 5.1 Bn in 2024 and is expected to exhibit a CAGR of 6.8% over the forecast period 2023 to 2030.
Regional analysis: North America dominates currently with over 40% share led by the US market. Presence of global treasury centres and fintech hub attracts most solution providers. Asia Pacific is the fastest growing region projected to expand at a 9% CAGR mainly driven by digitalization initiatives in large Chinese and Indian companies.
Key players: Key players operating in the Treasury Management Market are ABB Ltd., NXP Semiconductors N.V., Bel Fuse Inc., Larsen & Toubro Limited, Schneider Electric SE, Rockwell Automation, Inc., Mitsubishi Electric Corporation, Siemens AG, Eaton Corporation plc., and General Electric Company. These players are focusing on partnerships and product upgrades to tap the growth opportunities.
*Note:
1.Source: Coherent Market Insights, Public sources, Desk research
2.We have leveraged AI tools to mine information and compile it
