Market DevelopmentsTreasurers look to digitisation to deliver holy grail of 24/7 operations

Treasurers look to digitisation to deliver holy grail of 24/7 operations

The next decade will see technology further transform treasury operations for the better and enhance the strategic role of treasurers

The 2008 financial crisis marked the beginning of a sustained period of digitisation of operations by treasuries and while the pandemic has triggered an acceleration in the adoption of technology, much more is yet to come in the years ahead.

Covid highlighted the importance of cash flow forecasting and data analytics but with multiple new serious challenges having emerged  – high inflation, volatility and global supply chain upheaval among them – leveraging technology to gain visibility,  optimise liquidity and mitigate risks has become even more important for treasurers. Now, more than ever, treasurers are seeking solutions that support real-time liquidity, payments, and collections readouts and analysis.

As well as advances in ERPs, TMSs, and bank connectivity, treasurers have begun to deploy solutions based on ‘new wave’ technologies to provide resilience in volatile environments. These include open banking and APIs, which can be seamlessly integrated into existing treasury management systems to provide real-time data, enabling faster and more informed decision-making on liquidity and investment and enhanced fraud detection.

Indeed, automation of processes generally, from cash forecasting to bank account management, is a major priority for treasurers. It is still relatively early days for applying AI, machine learning, but these new wave technologies, alongside predictive analytics, hold great promise in areas such as optimising cash management, developing hedging strategies, regulatory compliance, procurement, supply chain management and sales forecasting.

The application of blockchain technology in corporate treasuries is even more nascent but its potential real-time benefits are being eagerly explored globally across a whole range of activities, including cross-border payments, trade finance, reconciliation, regulatory compliance, intra-day liquidity management and KYC.

Over the last 10-15 years, one of the biggest and most important impacts treasury digitisation has had is on the role of the treasurer within the organisation, especially larger ones. Thanks in large measure to technology and automation, the majority of treasurers, especially the larger companies, now have a much more strategic and operational role than they did before the financial crisis. The corporate treasury is now seen much less as a traditional cost centre than an efficient and innovative profit centre.

With advances in technology expected to deliver even greater levels of automation over the next 5-10 years, bringing truly real time, 24/7 treasury operations into being or, at the very least, much closer to reality, treasurers will likely see even more of their time freed up for added-value strategic work that provides valuable insights and analysis to C-suites and boardrooms.

 

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