FinTechAutomationTreasurers are now looking beyond robotic automation, says John Lewis’ lead treasurer

Treasurers are now looking beyond robotic automation, says John Lewis’ lead treasurer

Treasurers are now looking at the “next step” in automation, according to Christof Nelischer, head of treasury at John Lewis Partnership

Christof Nelischer made the comments during The Global Treasurer’s latest Future in Focus discussion, moderated by Divya Menon, executive director, transaction banking at Standard Chartered in New York.

However, Todd Yoder, managing director, global finance and treasury at Fluor in Texas, expressed some reservations about the use of next-gen technology in the treasury function, and pointed out the security risks regarding the relentless uptake of digital tools.

Their contrasting impressions reflect the fact that the treasury world is now at a crossroads regarding technology. According to Gartner, around 80 percent of global finance leaders have already implemented, or are planning to implement, robotic process automation (RPA) – the use of software robotics that can be programmed with specific pre-defined rules to perform key tasks. These technologies have typically been used to streamline time-consuming manual tasks like compiling periodic reports and processing invoices.

But the big question is the next step: how far can this technology go and to what extent can it be entrusted to make complex decisions by itself?

‘Treasury functions are now virtual processes’

Nelischer, whose own team at John Lewis has been updating its own architecture after a period of stagnation during the pandemic, is certainly an advocate for the uptake of digital technology, particularly the installation of applications that can connect with one another.

“Treasury technology is an enabler of good business practice,” he said. “In my mind, the evolution of treasury technology is simply a law of nature. It is not a question of if, but rather when, you adopt it.

“Treasurers are now at the point of looking at what comes next, beyond the mere automation of existing processes. We want to get our systems to do some of the thinking as well. Treasury functions are no longer physical processes, “but rather virtual processes that are increasingly highly automated.”

In Nelischer’s view, treasurers are knowledge workers who can contribute real insight to their businesses. Next-gen automation can only help in this regard.

“The higher the level of manual processing, the less the value add that is achieved by the treasury function. Therefore, I consider automation to be absolutely imperative and to be the answer for the notorious resource shortage that most treasury teams experience.”

High-level gains

Nelischer’s views are shared by a growing band of futurists and technology advocates, who suggest that artificial intelligence (AI) and its offshoot, machine learning (ML), offer vast potential to treasurers who want to optimise the way they work.

An AI or ML-powered system can analyse a company’s operation and suggest ways to improve. The system might suggest moving to a different bank or adjusting the payment terms to maximise liquidity and reduce overall fees. It can analyse previous payment patterns to highlight risk and pull in signals from non-conventional data sources to make more informed decisions.

With each passing week, a new story emerges about how AI and ML are pushing their own boundaries. The emergence of natural language processing, for example, enables machines to read human statements with genuine literacy, picking out the subtle nuances in everyday speech and finding the hidden clues that can indicate threats as well as opportunities.

‘AI doesn’t exist’

Fluor’s Yoder, for his part, is certainly aware of the benefits of automation, driven by wider factors such as the rise of Big Data and the global increase in computational power.

“A lot of treasurers have used technology as an enabler and a game-changer for at least the past three or four years,” Yoder told our panel. “We have seen a great acceleration in treasury technology.”

However, he is sceptical about the next steps, adding that “artificial intelligence is being sold to us quite a bit as treasurers… [but] I always say that artificial intelligence doesn’t [actually] exist”.

To qualify this statement, Todd suggested that artificial narrow intelligence the so-called “weak AI” that can be configured to perform specific tasks does exist and has indeed driven major improvements in treasury processes.

However, he believes that artificial general intelligence and artificial superintelligence, which allow machines to achieve a superior level of wisdom that can be applied across industries and use cases, “are down the road… if they will ever actually be achieved. It’s going to take neuro-scientists and data-scientists working together”.

Drilling down into the issue, Yoder also expressed concern about the cyber-security risks of automation, reflecting growing research which shows that treasurers are an ever-more prominent victim for hackers.

“The word Ransomware, when I hear that word, it scares me. At Fluor, we have some extremely talented people in our cyber-security division, and I feel very fortunate about that.”

Whether software developers can solve these cyber-security issues and provide a coherent business case for next-level digital applications, may determine how deeply automation embeds itself within the treasury realm.

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