TMI GLOBAL LIQUIDITY BAROMETER 2022

36 TMI GLOBAL LIQUIDITY BAROMETER 2022 CONCLUSION Deploying Digital Innovation to Optimise Short-Term Investments Only through automation, real-time information and connectivity will treasurers be able to maximise a diversified investment strategy in today’s volatile environment. The first half of 2022 has ushered in a radically different short-term investment landscape for corporate treasurers. With inflation on both sides of the Atlantic running at 40-year highs, the Bank of England made its fifth consecutive 0.25% interest rate rise in June, while the Federal Reserve brought in a 0.75% rate hike during the same month. The results of the TMI and Calastone Global Liquidity Barometer 2022 reflect these dramatic changes, with interest rates and inflation top of mind for treasurers. But while rate hikes offer the possibility for some much-needed yield on investments, the eye-watering inflation levels may simply negate this in real terms. So, what steps can treasurers take to navigate these choppy waters? Transparency over their investments – and what is happening in the market – is critical if treasurers want to make the best of the current situation. One practical way to unlock this visibility and operational efficiency is through a bank-agnostic investment portal that can offer real-time connectivity with all relevant treasury technology and market data feeds. That almost half of treasurers surveyed have no investment portal of any kind underlines that there is much more that many could be doing. Liquidity platforms and investment portals demonstrate the value of automation and real-time connectivity across all areas of short-term investment management. Take fund selection as an example — a critical step of the investment process for treasurers that wish to optimise their portfolio. Access to fund information, market rates, and the ability to compare various investment instruments at the click of a button revolutionises this process. It lets treasurers ‘get under the hood’ of funds’ underlying investments. As a result, they can make smart, informed decisions about all investment options’ yield potential and risk thresholds. It is no wonder that the survey reveals that access to real- time information is such a desired functionality for treasurers. Automation also enables corporates to be agile in the booking, execution and settlement of short-term investments, and empowers treasurers to respond instantly to market movements. Furthermore, automation provides far greater certainty over settlement, effectively extending cut-off times and dramatically reducing error rates that could lead to missed opportunities, additional bank charges, and an overall negative impact on liquidity. For treasurers that face limitations with same-day settlement – particularly when managing investments across multiple timezones and currencies – this level of automation delivers myriad benefits.