How to manage treasury operations safely and securely in the digital age

Laurent Descout, CEO of Neo, shares his thoughts on how treasury teams around the world are looking to modern digital treasury management systems to manage their operations in the new digital era.

Date published
August 23, 2021 Categories

Throughout the pandemic, organisations had to continue to provide all the essential services that clients expected, meaning they had to ensure they had the right IT infrastructure in place and the skills to use it.

This was new territory for them, and it quickly became clear that many treasury systems were not built to cater to this type of work and that treasurers struggled.

But the reality is that working from home is here to stay and treasurers need to continue learning and adapting to the way of working in the digital age.

Preparing for a new digital age

Treasury professionals worldwide will need to take stock of this. Global businesses have entered a new digital age and treasurers need to review their processes and working practices and accelerate the pace at which they adopt digital treasury management systems.

Up until this point, take-up of digital solutions by treasury professionals has been limited. In 2019, the Citi Treasury Diagnostics (CTD) survey reported that only 54 percent of treasury professionals reported using application programming interfaces (APIs) to assist with their treasury functions.

The same report also revealed that 63 percent claimed their Treasury Management System (TMS) operations are either completely unconnected or only somewhat connected to their enterprise resource planning (ERP) tools. With this lack of integration, treasurers are hindered significantly and reliant on multiple disparate systems to manage their payments, transactions and currency risk management – something that lacks practicality when operating remotely.

This is a turning point – a crossroads if you will. With the majority of finance teams around the world continuing with remote working, now is a sensible time to look at alternatives.

Ensuring you have the right tools for the job

Of course, any modern alternative must be fit for purpose, be easy to access and use, deliver a diverse range of functionality and ultimately ensure corporate treasurers can do their jobs as normal with no disruption.

The levels of security are also a key consideration. Many incumbent systems were built to be accessed primarily on-site, so their security systems are geared accordingly. But those working remotely from an individual or company-issued electronic device have different challenges to consider. The risks from hacking, malware and fraud are exacerbated. With multiple points of entry, as opposed to one, any weakness can be a gateway for unauthorised access to a company’s entire network.

One way to combat these issues is to look at systems that cater to all your needs in one place. Not only does this reduce duplication and the number of systems and accounts being accessed at any time, but it means you have access to the full suite of payments, cash flow, FX hedging and risk tools in one place – all from the comfort of your home.

Having the ability to work from one system, one account and monitor your operations from one screen greatly improves security and interoperability while standardising your treasury operations.

This is especially important when making payments in multiple different currencies. Very few treasury teams are limited to one currency in their day-to-day operations. As a result, they require multiple accounts to manage their international payment needs. Centralising these accounts can greatly improve both security and efficiency.

The pandemic has shifted attitudes towards work. The ways of working, which we thought were a short-term fix, have become an everyday reality. Treasury teams can no longer rely on the systems they had been using, as they simply are not suited to today’s treasury workflows. Digital, real-time treasury managements systems are a necessity if treasury teams are to thrive post-pandemic.

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