FinTechAutomationDigitization of Indian Corporate Treasuries

Digitization of Indian Corporate Treasuries

IBSFINtech discusses how much has digitization gained priority for Indian corporate treasuries and how the digitization wave is getting stronger in India.

Digitization wave is transforming various functions of business alike, and Treasury is also not aloof from this transformation. Corporate Treasuries in India are becoming more technologically oriented, riding this wave of digitization and automation, to ensure improved results and enhanced performance of the treasury function. This technology-driven digitization wave is becoming the facilitator for the corporate treasury to be on top of the risk management, streamline cash flow management and improvise results in other critical aspects of the treasury.

Globally the markets continue to remain volatile, and dealing with a very precarious, insecure future is the new normal. Stepping up in their roles, today’s CxOs, Finance Leaders, and Treasurers have reprioritized their priorities and have become the partner in the organization’s overall growth. Today’s priorities include but are not limited to, with the focus on:

  • Transparency, Control & Visibility
  • Data Integrity
  • Real-time Access
  • Audit / Compliance
  • Adoption of New Technology
  • Acceptance to Change to enhance and optimize the overall operations.

The Corporate Treasurers’ breed has always been considered elite, bestowed with the strategic and efficient management of corporate finance and risk functions. It is no surprise and a known fact that today, the Corporate Treasury has evolved to be a fundamental function of the corporates. Their role has expanded to become the CxOs confidante and enablers to generate profits for the Corporate through the Treasury center.

Moreover, the technology has played a critical role in facilitating the evolution of this role as well, ensuring the trend continues as the corporate treasury function becomes more pivotal to the overall business growth. It will be apt to state that over the last decade, technology has become the new best friend of corporate treasurers to deliver better results and establish the position of strategic partner for themselves in the overall business growth.

Keeping pace with technology

As the businesses are becoming more digitized, Corporate Treasury also needs to keep pace with the changing landscape of technology. It becomes imperative for the treasurers to play their role of a strategic partner more effectively by the implementation of new and advanced technology solutions to help deliver better and seamless customer experience to the end-customer. Leveraging the power of technology to ensure more visibility & control for the management, real-time management of risk, liquidity and all key functions of treasury signifies the powerful shift in the role of corporate treasury.

In the last few years, India has also observed a serious shift and has become an attractive destination for the large-scale shared service centers or Global In-house Centers, also known as GICs for some of the large corporates of the globe.

MNC’s have expanded to emerging markets across the globe, and Regional Treasury Centers have come up in the country over the course of time. To make most out of this shift and tackle time zones effectively, these centers have become important. This shift helps the corporates to centralize and concentrate cash and risk management, manage talent pool, gain economies of scale and process efficiencies.

This shift has been observed owing to the availability of right skills as well as the resources to leverage the power of technology in the implementation of Robotics, ML, AI, Blockchain, and so on. We believe this further strengthens the position of the corporate treasury in India today and will lead to positive transformation in the coming years.

Riding this wave of transformative change in Corporate Treasury and the evolution of the same in the country, IBSFINtech grew to become one of the Top 8 TMS players globally. Focusing on the needs of the Indian corporates, to begin with, the company provides comprehensive and integrated Treasury, Risk and Trade Finance Management Solution customized to suit the requirements of the Indian Corporates.

Today the treasury functions are not just limited to the safeguarding against the currency risk; it also goes beyond to manage the corporate’s investment portfolio to commodity risk to the trade finance management to cash flow, liquidity to valuation to hedge accounting and so on!

Elaborating more on a few of the use cases of Indian Corporates who have selected digitization and positively impacted the growth of their treasury teams to win international industry acknowledgements for the same.

Digitization doubles the volume of the operation

Sharing an intriguing story of digitization adoption by the Indian arm of world’s leading agro-commodity company, Olam Agro India Ltd (the wholly-owned subsidiary of the Singapore based parent company); the company achieved great benefits by the adoption of technology to drive towards the digitization and automation of treasury operations.

The most diversified agri-commodity company in the country, the company was exposed to significant foreign exchange and commodity price exposures. The Company was performing treasury activities for hedging and was also engaged in active dynamic hedging/un-hedging. High dependency on spreadsheets and the challenges that follow the usage of spreadsheets, led to the mandate of automation of treasury operations at the organization. Manual computation of MTM, exposure underlying maintenance and validating trades with traders was point under keen watch because of risk involved. The company selected the cutting-edge technology solution offered by IBSFINtech to efficiently run a front office to trade in forex and to integrate them seamlessly to back office with built-in flexibility to handle complex settlement procedures and maturity mismatches.

Every organization has defined compliances and best practices for its treasury operations. The IBSFINtech treasury management solution leveraged by this company ensured all the best practices are adhered to including the industry level best practices. The digitization and automation of treasury operations taken up by the company helped build more visibility & control for the top management and therefore, helped strengthen the confidence of the top management to allow new hedging tools like exchange options & cross currency. Right from the benefits of real-time MTM generation to on-click MIS reports for the top management, the digitization of treasury operations helped the treasury double the volume of the operation.

Olam Agro India Ltd – Anil Jena, Head – Treasury, quotes, “After analysing multiple alternatives in the market for our treasury front-office operations, we at OLAM India finally selected IBSFINtech which can be integrated at real-time. We perform extensive hedging activities and getting live market data has become a straightforward job owing to the integration of IBSFINtech’s TMS with Thomson Reuter’s DSS. We have been using TR’s FXALL for all hedging activities and STP from FXALL to IBSFINtech TMS has been a boon to us.  Post integration of IBSFINtech TMS & FXAll, we have been doing all the currency related activities like derivatives, valuation and auto valuation.”

Digitization for investment operations

Iterating a story of an automotive giant and the largest carmaker of the country, how the company leveraged digitization for efficient management of investment operations. The automotive giant had investments across various instruments, and it needed an efficient solution for managing the end to end operations, therefore, the company moved away from spreadsheets and implemented a TMS provided by IBSFINtech. This resulted in N2N automation ranging from transaction processing, accounting and reporting.

Driven by the mandate for digitization, the solution enabled process automation of the business workflows as well as the adherence to the internal risk management policies. The solution offered unified information and holistic view to the management for a wide range of instruments. The company benefited with seamless integration of existing IT system for STP (straight thru processing) of portfolio data and its related accounting entries. Owing to this process of automation, the automotive giant effectively managed internal as well as industry compliances, ensured automated reporting for the management, and observed improvement in efficiency in the investment management function. Digitization and automation of their investment management function led to increased efficiency in turnaround time for the treasury operations, better visibility & control, enhanced governance on internal compliances and facilitated the stakeholders with informed insights for decision making.

Conclusion

We strongly believe, the digitization wave is getting stronger amongst the Indian Corporate Treasuries and is bound to transform how treasuries function in the coming years. Connect with us for more intriguing use cases in Treasury, Risk and Trade Finance management which have been simplified by IBSFINtech’s comprehensive and integrated solution.


IBSFINtech is an Enterprise Treasury, Risk & Trade Finance Management Solution provider; one of the Top 8 globally and the leader in the Indian market. The Award-winning Comprehensive, Integrated and Innovative solution enables the CxOs to enhance visibility, improve control, mitigate operational risk, drive automation and optimize business efficiency.

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