Our recent Leading Voice Broadcast brought together industry experts to discuss how AI, automation, and virtual accounts are revolutionizing treasury operations.
The conversation was cantered around the growing challenges treasury teams face in today’s fast-paced financial environment – managing cash flow, ensuring liquidity, and responding to increasing demands for speed and accuracy.
With real-time decision-making becoming essential, the experts explored how these cutting-edge technologies are providing the tools to meet these demands.
Treasury teams are facing a growing set of challenges – managing cash flow, ensuring liquidity, and responding to a changing business environment.
As demands increase and expectations rise, the need for smarter, faster solutions has never been clearer. That’s where AI and automation come in.
Treasury teams, tasked with managing cash flow, ensuring liquidity, and navigating complex financial environments, are no exception. In this context, AI and automation have emerged as essential tools, transforming treasury operations and enabling treasurers to meet these challenges head-on.
AI and automation are becoming integral to treasury management. By automating routine tasks and providing advanced data analytics, these technologies are helping treasury teams make smarter decisions, reduce manual workloads, and drive efficiency.
Let’s take a closer look at how these technologies are reshaping the treasury function.
The Need for Change in Treasury Management
For many years, treasury teams have been relying on manual processes and legacy systems to manage their operations. These traditional methods, while effective to some extent, are often time-consuming and prone to error.
As businesses grow and become more complex, the need for more efficient, data-driven solutions has never been more urgent.
Naresh Agarwal, a seasoned expert in corporate treasury, discussed the increasing pressure on treasurers to provide real-time insights into cash positions and liquidity needs.
With businesses needing to adapt quickly to shifting financial conditions, treasury teams must be equipped with tools that enable them to respond swiftly and accurately. AI and automation are providing those tools.
AI: Improving Cash Flow Forecasting with Accuracy
One of the most significant benefits of AI in treasury is its ability to improve cash flow forecasting. Historically, treasury teams had to rely on manual methods to predict future liquidity needs, often using historical data to make educated guesses.
However, this approach can be inaccurate and reactive.
AI changes this by analyzing large sets of historical data and predicting cash flow trends with a higher degree of accuracy. Justin Silsbury from Infosys Finacle highlighted how AI’s ability to process and analyze real-time data allows treasury teams to forecast cash shortages or surpluses more effectively.
This predictive power helps treasurers take proactive measures, reducing the risk of cash flow crises before they occur.
Rather than waiting for problems to arise, AI enables treasurers to anticipate them, plan ahead, and ensure that liquidity is available when needed most.
Automation: Streamlining Processes and Reducing Errors
While AI is transforming the way treasurers forecast and analyze data, automation is streamlining the day-to-day operations that once consumed much of their time.
From manual reconciliation to cash sweeping and payment processing, many tasks traditionally took up hours of a treasury team’s day.
Floor Meeuwis from Societe Generale discussed how automation is reducing the need for manual intervention in these processes. Virtual accounts, for example, allow funds to be moved automatically between accounts without the need for human action.
This automation not only saves time but also reduces the risk of errors, making treasury operations more reliable.
The impact of automation is far-reaching. With fewer manual processes, treasury teams can focus on higher-value activities, such as liquidity optimization and strategic planning, rather than spending time on routine tasks.
Real-Time Data: Empowering Faster Decision-Making
Another major benefit of AI and automation in treasury is the ability to access real-time data. In the past, treasurers had to wait for end-of-day reports to understand their cash positions.
By that time, market conditions might have already changed, and decisions made on outdated data could lead to missed opportunities or unnecessary risks.
With the integration of AI and automation, treasury teams now have access to up-to-the-minute data. APIs connecting treasury management systems (TMS) with virtual accounts allow businesses to see their cash positions as they stand in real time.
This capability means treasury teams can make quicker, more informed decisions, responding immediately to liquidity needs or reallocating funds across departments or regions.
As Justin Silsbury pointed out, real-time data is a game-changer for treasurers, allowing them to be agile and proactive, rather than reactive.
AI in Risk Management: A Smarter Approach to Fraud Detection
AI’s capabilities extend beyond cash flow forecasting and liquidity management – it is also an invaluable tool in fraud prevention and risk management.
The increasing complexity of financial transactions has made fraud a major concern, but AI is helping to detect anomalies and irregularities that may indicate fraudulent activity.
By continuously analyzing transaction data and identifying patterns, AI can flag potential fraud in real time, allowing treasury teams to take action before significant losses occur.
As Naresh Aggarwal noted, AI’s ability to spot unusual patterns that may go unnoticed by humans is a crucial advantage, particularly in a world where fraud is becoming increasingly sophisticated.
AI helps treasury teams stay secure by acting as an additional layer of defence, preventing fraudulent transactions and protecting the organization’s financial assets.
The Combined Power of AI and Automation in Treasury
While AI and automation are both powerful tools on their own, their combined effect is even more impactful.
AI provides the intelligence needed to predict, analyze, and optimize cash flows, while automation takes care of the repetitive, time-consuming tasks that slow down operations. Together, they create a streamlined, efficient treasury operation that allows teams to focus on more strategic initiatives.
With AI and automation working together, treasury departments can reduce errors, optimize liquidity, and improve decision-making – helping businesses stay competitive and agile in an increasingly complex financial world.
The Future of Treasury with AI and Automation
As Naresh Aggarwal pointed out, AI and automation are still in the early stages of their application in treasury.
However, the future looks bright. Over time, these technologies will continue to evolve, offering even more advanced capabilities to help treasury teams navigate the complexities of modern finance.
The future of treasury lies in embracing these technologies. Businesses that invest in AI and automation today will be better equipped to manage liquidity, reduce risks, and make smarter, data-driven decisions in the future.