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Digitisation of Treasury | Part 1

Does the technology exist to truly enable the digital treasurer?

Blog Series – Part 1 of 3

part 2

Internet of things, VR, AI, biometrics and BIG data – buzzwords we hear too often. Over the last ten years there been some dramatic changes in the use of technology, most notably in the consumer space. Very few areas remain untouched by the trend of digitisation. As Steve Jobs would say, “there’s an app for that” and if there isn’t, then there are some very clever developers out there capable of building one quickly enough.

As consumers, we are slaves to technology. From home entertainment and grocery shopping to booking trains, hotels and flights. We’re ever more reliant on our smartphones and tablets to organise our lives. Yet, while we may change our smartphones every year to keep up with the trend, the technology we use at work is updated less frequently.

This seeming detachment between our experience with tech at work and home suggests that development of technology in the corporate space has not kept up with the pace of change. Speed, security and efficiency are some of the most important factors that have brought around change in the consumer space. But, aren’t these the same factors organisations look to achieve in day to day operations?

Without a shadow of a doubt there are some major roadblocks facing corporates in both the development and deployment of new technology, and this is clearly visible in the role of treasury and finance.

Changing role of treasury

The 2008 Financial Crisis has been the most fundamental driver of change in the roles and responsibility of the corporate treasury department.

The most significant financial disaster of our time has highlighted a companies’ need to manage cash and liquidity exposures ever closer – combining a focus on earnings, with a focus on managing risk and exposure. The event ended the ease of cash availability for most corporates and marked the beginning of an era in which banks and financial institutions were no longer able to meet corporate demand for financing.

To deal with this situation and bring about strategic change, the role of the treasurer came into focus. Treasurers were no longer just cash and liquidity managers. They became business leaders and risk managers overnight

To help continue to deliver results on the traditional treasury front, Treasury Management Systems (TMS) came to the fore. They helped to deliver portfolio management in a single place and enhanced the risk management package. Treasury departments across the world embraced the technology to allow them to automate manual processes, freeing treasury staff members to focus less time on menial tasks and spend more time on informing strategic decisions.

Over the years, TMS evolved to keep up with the treasury needs and demands. However, we are now at a precipice where this notion of treasury reengineering is facing the unwanted effect of the huge regulatory burden that now falls on multinational companies.

From Basel III to CRD IV. Post-financial crisis regulatory changes have brought about challenges that have put the treasury department at the centre of corporate compliance. On their quest for speed, security and efficiency, treasurers are now facing additional hurdles, slowing down their ability to add value to the operational divisions of the company. Complying with these regulations has become a full-time job and as treasury departments gather more data for regulatory reporting, they are being presented with greater operational and technological challenges.

Recognising that innovative technology is high on the agenda, FinTech (Financial Technology) companies are progressively reshaping the corporate treasury landscape with solutions which focus on more niche requirements. What has been missing for around a decade is an automated, data driven solution to help deliver new treasury strategic goals – and the FinTech answer to that is an Automated Cash Analytics Tool.

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