Why Is Liquidity Management the Core of Treasury Strategy
The business world is changing quickly, as are the demands on treasury teams. Markets are more unpredictable, payments move faster, and the pressure to do more with fewer resources keeps growing. Companies need money in the right place at the right time, not a day later.
That’s why liquidity management is a central part of financial strategy today. It isn’t only about protecting funds anymore. It’s about speed, flexibility, and making confident decisions when opportunities or risks appear.
Stephen Randall is the Global Head of Liquidity Management Services at Citi. He leads Citi’s global liquidity strategy and helps multinational firms improve cash visibility, strengthen resilience, and better use their resources.Â
Under his leadership, Citi has introduced real-time funding, tokenized cash services, and seven-day sweeps, giving clients tools to operate in a 24/7 environment.
He has also advanced the use of AI, automation, and blockchain in treasury work. With Citi Treasury Diagnostics, he helps businesses benchmark performance, streamline accounts, and improve investment strategies. His experience shows how modern systems, clean data, and practical innovation shape the future of the Treasury.
In this article, we’ll explore what lies ahead for treasuries in 2025 and beyond. You’ll see why centralization matters, how data strengthens performance, and where AI fits. We’ll also examine the technologies treasurers can’t ignore and the human side of building resilient, future-ready teams.
The Future of Liquidity Management in 2025 and Beyond
Liquidity management is shifting as companies face uncertain times. They want enough working capital to deal with risks and the flexibility to act when new opportunities arise. That’s why having a clear view and strong control of global cash is more important than ever.
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Why Centralization Matters
Centralizing liquidity gives firms a single view of their cash and the ability to control it. This helps them move money where it’s needed and invest any surplus in smart ways.
Studies show that businesses with strong treasury systems did better during tariff changes. They recovered faster and earned more on extra funds because they had the right setup in place.
Pressing Challenges for Treasurers
- Efficiency Demands: Treasurers must keep doing more with fewer people. The pressure for efficiency hasn’t eased, and it shapes daily work.
- Fund Availability: Money has to be ready in the right place at the right time. Businesses can’t afford to wait when obligations or opportunities come up.
- Real-Time Speed: Payments now move instantly, not at the end of the day. Treasurers must adapt to this pace and deliver quick solutions.
From End-of-Day to Instant Funding
Take a simple example. If a payment leaves a Hong Kong account, treasurers don’t want to wait until tomorrow.
They expect money from London to move right away and cover it. Real-time funding reduces errors, saves time, and makes daily operations smoother.
Building Resilient Treasury Functions
Firms that adjust their treasury models to today’s demands are stronger. They handle cash cycles better, adapt to rate changes, and respond faster to market shifts. Many invest in real-time data platforms and instant funding tools to achieve this.
Liquidity management now is not just about safety. It’s about speed, flexibility, and acting with confidence when the moment arrives.
Why the Right Data Matters in Liquidity Management
Liquidity moves faster today. Payments happen instantly, and balances shift across many accounts worldwide. Cash gets stuck in the wrong place without good data, earning little or nothing. That’s what it means to leave money on the table.
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How Data Strengthens Performance
The most effective treasury teams:
- Know where all their cash is at any given time
- Consolidate accounts instead of spreading balances thin
- Use systems that bring data together in real time
With this setup, they can act quickly. Surplus funds go where they’ll earn the most. These teams did better during recent shifts because they had the full picture and didn’t waste time guessing.
Barriers Holding Teams Back
Not everyone has reached that level yet. Many companies still deal with fragmented systems from past acquisitions. Others face messy, inconsistent data that makes forecasting unreliable.
Some simply hold too many accounts in different banks and countries. Each of these issues creates gaps in visibility and slows down decisions.
Practical Ways Forward
Treasuries can strengthen their position by:
- Standardizing data so it’s consistent and easy to use
- Rationalizing accounts to reduce complexity
- Automating tasks to cut manual errors and save time
It may sound like basic housekeeping, but it makes a big difference. When teams clean up data and reduce the number of accounts, they finally see a clear picture. Decisions become faster and more accurate.
Good data isn’t just helpful, it’s essential. Without it, companies waste cash and miss out on stronger returns. With it, every balance works harder, and liquidity becomes a real advantage rather than a constant challenge.
How AI Is Shaping the Future of Liquidity Management
AI is starting to play a bigger role in treasury work. Many tasks are repetitive, and AI can handle them better. It automates processes, improves accuracy, and provides stronger analysis. This helps teams make smarter decisions while freeing time for more strategic work.
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The Link Between AI and Data
AI needs good data to deliver results. If information is fragmented or inconsistent, the outcomes won’t be reliable. That’s why a solid data strategy must come first. When data is clean and consistent, AI can:
- Spot useful patterns
- Produce reliable forecasts
- Suggest smarter actions
Without this foundation, AI tools won’t reach their potential.
People, Culture, and Partnerships
AI isn’t just about machines. It also needs people with the right skills and mindset. Teams must be ready to question old processes and improve them before adding automation. Automating a weak process doesn’t make it better.
Partnerships matter too. The Treasury works with other departments and depends on banks for data. Strong collaboration ensures AI has the information it needs and delivers value across the business.
Where to Begin with AI
There isn’t one starting point for everyone. Some teams use AI first for forecasting. Others focus on anomaly detection or automation.
The right choice depends on the maturity of the Treasury. What’s clear, though, is that data comes first. A strong data foundation supports every future AI step.
Changing the Role of Treasury and Banks
AI is also reshaping relationships with banks. Connectivity is moving to real-time systems and APIs, which give treasuries speed and scale.
The fundamentals of liquidity remain steady, but everything now runs faster. With the right mix of data, people, and tools, AI helps treasuries do more with less.
What Tech Capabilities Will Define the Future of Liquidity Management
Looking three to five years ahead, certain capabilities will be essential. Treasuries will need to run in a real-time, always-on environment. This means moving beyond batch processing and cut-off times.
They will need 24/7, 365-day coverage across multiple jurisdictions. Real-time funding, digital assets, and blockchain are already supporting this shift, enabling faster and borderless money movement.
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End-to-End Connectivity
Seamless end-to-end connectivity will be critical. Treasuries can’t have bottlenecks. Any block in one area disrupts cash flow forecasting, liquidity planning, and risk management.
A single source of truth with consistent, real-time insights will be essential to keep operations smooth and resilient.
Tackling Legacy Systems
Legacy systems are a major hurdle. Replacing old infrastructure takes time and effort, but it’s necessary. Many organizations are unbundling legacy platforms and moving toward API-ready solutions that connect smoothly with banks.
These upgrades take effort but strengthen resilience, improve flexibility, and allow treasuries to grow.
How Banks Are Supporting the Transition
Banks are helping treasuries through several key initiatives:
- Expanding existing solutions: Offering capabilities in more markets for consistent support.
- Real-time funding: Allowing instant money movement anytime, including weekends.
- Tokenized cash services: Using private blockchain for secure, efficient transactions.
- Seven-day sweeps: Managing liquidity continuously, even outside traditional hours.
- Cross-currency sweeps: Automatically shifting balances across currencies without manual steps.
These initiatives make treasuries more flexible, reduce manual effort, and allow them to optimize liquidity efficiently.
The Human Side of Treasury
Technology is important, but people remain central. Treasurers may feel overwhelmed by rapid change.
Focusing on fundamentals and benchmarking against peers helps identify strengths and gaps. Strong partnerships with banks and advisors give support and guidance.
Future-ready treasuries balance clean data, modern systems, strong partnerships, and clear goals. This combination builds resilience and keeps teams confident in a fast-moving world.
Conclusion
Liquidity management is changing fast, but the basics still matter. Companies need clear visibility of their cash and the ability to move it quickly.
When funds sit idle or data is scattered, opportunities slip away. But every balance works harder when treasuries centralize accounts, clean their data, and automate key tasks.
The move toward real-time operations is here to stay. Payments, funding, and decisions happen around the clock, not just at day’s end.
AI and automation can make this smoother, but only if the data underneath is accurate and consistent. Strong foundations let treasuries forecast better, cut errors, and respond confidently when markets shift.
That said, technology isn’t everything. People and partnerships remain at the heart of treasury work. Teams that focus on fundamentals, build trust with banks, and embrace smart tools are in the best position. They don’t just react to change. They adapt, grow, and turn challenges into real advantages.
FAQs
What is the main goal of liquidity management?
The main goal is to make sure money is available when needed. It helps firms cover obligations and seize new opportunities without delay.
How does liquidity management affect company growth?
Strong liquidity systems let businesses invest surplus cash wisely. This builds resilience, supports expansion, and improves long-term growth.
Is liquidity management only important for large corporations?
No. Even small and mid-sized companies need it. Without proper control, they risk cash shortages and missed chances.
What role do banks play in liquidity management?
Banks provide tools like real-time funding, sweeps, and APIs. These services help firms move money faster and manage risks better.
Can poor liquidity management increase business risk?
Yes. Delayed payments or scattered cash can cause losses. Poor visibility also weakens forecasting and reduces financial stability.
