→ The Treasurer’s Playbook: 6 Priorities to Win in 2025

Presenting My Two Cents – January 2025 Edition

2025 isn’t giving treasurers much breathing room. Deposit costs are climbing faster than forecasted, liquidity buffers are stretched thin, and AI is no longer a concept for tomorrow.?

On top of that, regulators are expecting more transparency, more oversight, and more from treasury teams.

Here are six priorities treasurers can focus on to succeed in 2025:

?? Build Treasuries of the Future

Managing a treasury department today means creating systems that can keep up with constant change. Tools like AI and advanced analytics make it easier to simplify workflows and turn data into clear, actionable decisions.

With 72% of finance leaders stating their departments utilize AI technology, there’s a clear opportunity for treasurers to embrace technology to improve efficiency and decision-making.?

What treasurers can do:

• Review the operating model critically. Are your team, processes, and technology set up to support a more agile treasury over the next five years?

• Focus on automation where it makes sense, such as streamlining routine tasks like cash flow forecasting or resource allocation.?

• Make treasury a hub of innovation by building cross-functional collaboration with IT and data teams.

?? Optimize Net Interest Income

Net interest income (NII) saw a strong boost in 2023, but with rates expected to flatten or decline in 2025, NII could drop globally by 5%.?

Treasurers need proactive, data-driven strategies to safeguard profitability as market conditions shift.

What treasurers can do:

• Strengthen interest rate risk management framework and develop a range of rate scenarios to assess how each impacts earnings and liquidity.

• Use real-time data and predictive models to make informed decisions about rate exposure and hedging strategies.

• Take a more dynamic approach to asset-liability management, ensuring alignment between rate changes and the bank's broader goals.

?? Strategic Focus on Deposits

Deposits have always been a critical driver of profitability, but rising deposit costs, projected to reach 2.03% in 2025, mean treasurers need to shift their focus.?

The days of simply growing deposit balances are over, now it’s about strategically managing them to maximize value while balancing customer needs and costs.

What treasurers can do:

• Use advanced analytics to fine-tune deposit pricing strategies that help balance customer needs with your bottom line.

• Strengthen customer insights to understand what drives deposit behavior in different segments and adapt strategies accordingly.

• Incorporate deposit management into broader funding and profitability strategies so it aligns with both short- and long-term goals.

?? Active Balance Sheet Management

Balance sheets are under greater scrutiny as liquidity tightens and regulatory expectations grow. Treasurers now need to ensure their balance sheets are working harder, aligning with corporate goals, and adapting to economic realities.

What treasurers can do:

• Take an active approach to balance sheet steering by deploying strategic, technical, and transactional tools.?

• Regularly stress-test the balance sheet under different economic scenarios.

• Use balance sheet optimization as an opportunity to align with corporate objectives, such as growth or capital efficiency.

?? FTP Steering

Banks adopting flexible Fund Transfer Pricing (FTP) frameworks in 2024 improved funding cost optimization, liquidity management, and market-aligned pricing, boosting cost efficiency.

What treasurers can do:

• Revisit the FTP framework to see if? your current practices are flexible enough to adapt to shifts in market conditions

• Use FTP strategically to address competing priorities, such as reducing funding costs while improving profitability.

• Incorporate FTP into your broader planning and decision-making processes so it remains a value driver rather than just a compliance tool.

?? Liquidity Evolution

Liquidity management remains a cornerstone of treasury strategy, but the environment is changing rapidly. For instance, the collapse of several regional banks in 2023 led to increased regulatory scrutiny and proposed adjustments to liquidity regulations.?

What treasurers can do:

• Reevaluate the liquidity planning process, incorporating lessons from the past few years.?

• Anticipate regulatory changes by building flexibility into your liquidity framework today.

• Strengthen collaboration with other departments, such as risk and finance, to align liquidity strategies across the organization.

?? My Two Cents:?

The decisions made today will not only affect balance sheets or compliance reports but will also shape the role of treasury for years to come.?

Treasurers have a rare opportunity to step beyond traditional responsibilities and become architects of resilience and growth.?

For teams willing to rethink old models, there is an undeniable opportunity to lead the transformation.

Treasury has always been about balance:?

• Risk versus reward
• Cost versus value
• Today versus tomorrow.

The difference now is speed. The faster treasury teams adapt, the stronger their position in a world that is changing faster than ever.

What you do next is not just about meeting the challenges of 2025; it is about setting the standard for the future of finance.

?? Closing Remarks:

Treasurers are facing a changing environment where every decision matters.

Rising deposit costs, regulatory demands, and faster technological changes are forcing treasury teams to rethink their priorities.?

But here’s the upside: change also creates opportunity.?

Faster decision-making, smarter systems, and a proactive mindset can transform treasury into a driver of growth, not just a compliance function.

The real winners will be those who think beyond the immediate challenges and focus on building future-proof, agile strategies that thrive in uncertainty.?

Treasury leaders need to move from reactionary tactics to a bold, forward-thinking approach.?

?? Banking Sector In Review

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• High-Performing Credit Unions All Share This One Trait — And It’s Critical to Loan Growth (Via The Financial Brand)
• Federal ‘Payments Charter’ Threatens Turf Battle Between D.C. and the States (Via The Financial Brand)
• Why Banks Should Anticipate a Return of the ‘Roaring ’20s’? (Via The Financial Brand)