If you throw a frog into a pot of boiling water, he’ll jump out. If you put the same frog in tepid water and slowly turn up the heat, you will get a very different result.
Many CFOs and corporate treasurers in the United States today—especially CFOs and treasurers of multinational corporations—find themselves in the situation of the slow-boiling frog. The technologies and workflows that their organization has used for years are unable to keep pace with both business-as-usual activities and escalating disruptive events such as a bank or trading-counterparty default, legal judgments or fines, a currency devaluation, a fraudevent, a qualified audit result, or a merger or acquisition.
Who has time for strategic planning when you are constantly fighting fires? Yet for many companies, no single disruptive event has been dramatic enough to prod the finance function to jump out of the boiling water and into a more efficient way of doing things.
Since passage of the Sarbanes-Oxley Act in 2002, the landscape for finance departments has changed significantly. Numerous new regulations on financial services have hit not just financial institutions, but virtually all U.S. companies that conduct business in multiple jurisdictions. Cash transactions with non-U.S. counterparties are subject to much tighter scrutiny; opening foreign bank accounts requires increasing manual compliance efforts; Basel III is placing increasing pressure on reserve requirements; the maze of Dodd-Frank rules and regulations, including stress-testing, is affecting every company that has excess cash to invest; and the Foreign Account Tax Compliance Act (FATCA) and foreign tax reporting rules are ballooning compliance requirements worldwide. Meanwhile, ultra-low interest rates are pushing treasurers tochase yield around the globe, which places a heavy burden on risk management teams.
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By Berl Kaufman, from: http://www.treasuryandrisk.com/2014/09/04/cfos-taking-the-heat