Corporates should centralise payments and risk management capabilities in order to hedge upcoming high levels of price, currency and risk volatility, according to speakers at EuroFinance Copenhagen.

Volatility was the key word at the first day of the event, with speakers listing the numerous sources of volatility that will affect treasury and cash management in the next few months. Amrita Sen, chief oil analyst at Energy Aspects, explained that oil prices could spike dramatically as early as 2017, as even OPEC output is expected to drop. “Watch out for supply everywhere in the world. Come 2017, prices can shoot up to around $90 a barrel again,” she warned.

Eric Burroughs, editor and managing analyst at Reuters Buzz, presented all the different reasons why the value of the euro is likely to go down in coming months: divergent Fed and European Central Bank policies on interest rates; beginning of a strong dollar phase; pressure on China’s currency reserves – leading him to advise corporate treasurers to “get creative to hedge their currency risk”.

Other speakers mentioned China’s structural reforms, particularly needed to improve the efficiency of state-owned enterprises, as a challenge for treasurers trying to understand already complex regulations.

New regulatory requirements, by putting pressure on bank liquidity, are also challenging what used to be stable relationships with banks. According to Dan Blumen, a consultant at Treasury Alliance Group, recent examples of banks retreating from global transaction services are likely to become recurrent.

One thing that could help corporates deal with this level of uncertainty is centralisation. For Sebastian di Paola, a partner at PwC, companies should centralise their commodity risk management functions in order to cope with that price volatility. They should also invest in tools to measure their exposure to these different types of volatility, as well as increase their knowledge on the impact of regulation, to be able to choose the right partners.

“There is sometimes a tendency of those who do have the knowledge on regulations to want to keep it for themselves, and adopt a ‘if you can’t convince, then confuse’ strategy, using the confusion it as a commercial tool, so treasurers need to get sufficient knowledge to make up their own mind,” he said.

Centralisation can also help companies reach better cost efficiency, by leveraging new platforms such as Faster Payment in the UK, as ACE Software director Alain Falys explained. When in the past they relied on an exclusive relationship with one global bank (which is no longer safe considering banks’ capital restrictions), by centralising payments they can now have an overview of all the solutions available for each payment – global or regional bank, non-bank, etc. – and automate the payment decision according to the desired outcome, such as speed or cost.