In this exclusive interview, The Global Treasurer caught up with Tom Hunt, CTP Director, Treasury Services at the Association for Financial Professionals (AFP) to hear his views on the major trends in treasury, tech adoption across the profession and much more.
What key developments have you seen in the world of treasury over the last 12 months?
We’ve seen developments around three key themes. First is the application and adoption of emerging technology, such as bots, blockchain and AI. It’s mostly been around bot technology so that treasury can be more efficient in manually intensive processes. The financial services industry is primarily where the application is being adopted more, reconciling bank statements, and acting as middleware to connect older systems to newer ones where data fields can be collected and quickly filled. There is much more to explore with the capability, and often treasury and finance are the owners of the technology.
Another theme we’ve seen is that treasury professionals have been developing more efficiency from existing resources—determining a better utilization, and whether new modules can be implemented in already-owned systems.
Finally, adapting to geopolitical risk, trading wars and Brexit has been quite an ordeal. North American treasurers have an unprecedented amount of new risk to consider, given tariffs on China and now potentially against Mexico, as well as Brexit being pushed back. Their resilience becomes even more vital to support the underlying business.
What’s driving these treasury trends?
The common mantra for treasury since the financial crisis has been “Do more with less.” As needs of the underlying business expand and regulations make dramatic changes, treasury needs to be able to respond—and often without any new resources. And when they do spend money on new technology, treasurers have had to figure out how to get a higher ROI.
Treasury also needs to respond accordingly when companies are liquidity challenged. Providing liquidity is essential in all periods of economic activity, but treasury is ever more important in these instances.
What are the current challenges facing treasurers?
The regulatory environment has been particularly challenging, particularly when it comes to KYC compliance. And again, treasurers need to make prudent use of liquidity.
Focusing on treasury technology, how have you seen adoption of tech develop over the last year?
We’ve seen more adoption of robotics primarily. Bot technology connects legacy systems, replaces manual keystrokes and enables more time to be used towards more strategic initiatives.
What’s holding it back?
Many promising technologies are available but use cases and proven capabilities are often left to be desired. Blockchain is a very useful and capable technology, but its adoption and usage at the corporate level has been less than ideal.
How can more use of technology be encouraged?
Demonstrated use cases that solve complex and repetitive problems will go a long way with treasury professionals. Much of it comes down to trust—there needs to be trust so that many vendors will adopt it. This is driven from the corporate voice and that needs to be heard.
How do you see treasury developing over the coming year?
I expect to see continued usage of SaaS. It has a small IT footprint, has scalable technology and continues to get better with rollout and tuck-in technology add-ins.
What top tips can you share with treasurers to help them through the challenges that lay ahead?
Be resilient, rely on your bank partners, and be proactive.