Boosting the Bots: The Next Step Towards Treasury Digitisation

Where should the digital transformation of a treasury department begin? That’s the issue currently occupying many treasurers’ minds. How can we use robots as part of the treasury process in order to gain in terms of efficiency, resources and security? This article aims to set out a gradual and logical approach to retro-fitting and further digitising an organisation. After all, the world is changing so swiftly that increased agility within a more flexible and finely tuned structure is an absolute must.

The path to digitisation

If they haven’t already done so, treasurers need to firmly commit to the ‘digitisation’ of their daily activities. The treasurer’s role is to make their organisation more resistant and more resilient, but that doesn’t just involve having a more efficient treasury management system (TMS). That will help, but it won’t suffice on its own. The treasury department’s IT architecture needs to be redefined as a whole, but that’s a long and complex road strewn with hazards, and often, there is no clear destination.

There’s no miracle cure or plan applicable to everyone, but unless action is taken now, greater operational efficiency will remain out of reach. Once existing systems have been optimised (e.g. TMS, Payment Factory and the other IT satellites and additional applications), the next stage is to install an Extract Transform Load (ETL) system in order to connect and consolidate data and add the missing layer of reporting required. This is the ideal way of bridging gaps in terms of reporting and functionality.

This phase can best be described as ‘IT consolidation’, designed to rectify any absences and deficiencies, especially in terms of financial reports. Such a customisation enables the development of dashboards and a full array of key performance indicators. This preliminary customisation stage of system consolidation and optimisation of processes and reports simply can’t be skipped. Once this layer is in place, the next step will be the deployment of robots in order to automate a series of processes.

Fig 1 - The Drivers of Change

Unblocking resources and power through robots

The overarching objective is to unlock the (potential) power of introducing robots into treasury processes by automating certain repetitive, tedious or laborious processes that present systematic characteristics, even if this involves opening and searching for information in multiple IT systems. In essence, a robot is just software that will perform macros in the same way as a spreadsheet file, but on a multi-system basis, and enables the execution of an action or a successive and repetitive set of actions, possibly with calculations. Robotics process automation (RPA) can be achieved using low-cost and efficient products such as Blue Prism, Automation Anywhere, Ui Path. It’s also possible to use systems like IBM’s Watson which will leverage artificial intelligence (AI) to carry out these functions. So if robots in treasury were ever merely a myth or pipe dream, that’s no longer the case today.

Is the finance department fit for purpose?

Entire finance departments are going to have to change and adapt. In this unavoidable evolution of finance as a whole, treasurers need to be proactive regarding their own adaptation and bring themselves up to digital speed. Sitting back passively while being subjected to a profound transformation would be tantamount to madness, as the figure 2 diagram illustrates.

Fig 2 - Finance Transformation Roadmap

This digital transformation is structured around the transformation of the entire finance department. CFOs are currently grappling with multiple challenges and evolving goals, such as cost reduction, more rapid production of financial information, simplification of financial processes and reduction of red tape. They have to play the role of integrator, better understanding the expectations of contacts and subsidiaries, and enhancing risk management by deploying more effective predictive tools. All this is set against the background of tumultuous economic, regulatory and political environments, and an increasing number of fraud attempts.

The root-and-branch structure of finance departments is due a complete overhaul. CFOs are going to have to deliver greater agility, be more connected and more focused in terms of data. They will also have to integrate new technical skills, make better use of the data at their disposal and improve the decision-making process via predictive analysis, irrespective of the technical resources deployed.

So what should be taken on by robots?

While robots can create value in a number of financial functions, it would appear that certain departments are more capable of generating value in this way. Out of all financial operations, it’s departments such as treasury, tax, financial reporting, purchase-to-pay and operational accounting where using robots makes the most sense.

In order to embrace robotics, it’s essential to have repetitive processes of which the rules are definable and standardised, or capable of being so, with a logical and clear sequence. Let’s take, for instance, the activities of cash management, FX, bank relationship management, reporting and statistics. Ultimately, it all depends on the organisation and the defined processes.

A robot will enable the definition of a flow chart and possibly the review of the process in order to be able to enhance and then implement it, such as a macro in Excel. This macro can carry out the task of a person (hence the idea of a robot) and/or access one or more databases or systems in order to perform predetermined and precise operations, even when these are numerous. Let’s demystify the robot, which is nothing more than simple software, a mechanical box suited to self-assembly. And contrary to popular belief, they don’t require any in-depth technological knowledge or training.

A robot is a tool that’s relatively easy to configure - or a flow chart (and therefore documented) that will perform predefined and specified tasks. It can carry out multiple processes provided that they don’t have to take place at the same time. Essentially, we’re asking a machine to replace a worker by indicating to it which tools to enter and exit and what to do within them.

For instance, the treasurer sends standardised templates to subsidiaries via their email inbox, who then respond. The robot processes the emails and extracts the necessary information from them by scanning the response. It then imports the desired data into a spreadsheet file, saving it on a shared disk, converting the files into Word documents in order to forward them to another department for further processing. The return of the processed file will then be worked upon again and reimported in another tool (e.g. Excel spreadsheet or other software) and finally reconciled in order to be saved and sorted. Alerts may be automatically initiated in order to monitor the process and, subsequently, an artificial intelligence layer can even be added.

Fig 4 - Virtuous Robotisation of Treasury Processes

Return on Investment?

It’s a legitimate and frequent question. The return on investment (ROI) can be calculated by estimating the number of minutes saved per day and by multiplying the man-hours as euros. But who could fail to grasp the added value of freeing up time, relieving the daily pressures or when closing the accounts? Being able to focus on the more worthwhile and rewarding tasks is motivating for employees. The profession currently requires treasurers to possess increasing sets of skills in terms of IT, data processing. They should also have an analytical mind and the ability to reduce IT dependency. Robots are the prior stage to artificial intelligence, which can be grafted on to them.

As well as executing tasks, an intelligent machine can follow decision trees and, depending on the responses, adopt different processes and adapt itself. It seems logical to seek to eliminate errors and offer audit trails, greater productivity, coherence in the treatment of processes and increased flexibility while at the same time motivating staff. The robots are DIY solutions that a treasurer can rapidly tailor-make to suit their needs. But in order to identify what could be undertaken by robots, it’s essential to consider all the routine processes and what they entail. Before going ahead with the deployment of complex algorithms, it’s more logical to start by freeing staff from the most tedious processes that are of little interest to them.

The virtues of robots

This type of process is very much a win-win, as the more automation with robots that is introduced, the more satisfied employees will be. Greater security and increased internal controls help motivate teams. Additionally, as treasurers robotise, more possibilities will arise as a result. And, in turn, more processes can be modelled in-house by the department. Robots mean companies will be less dependent on certain IT suppliers. Of course, those who subcontract and outsource their treasury activities won’t be too pleased to see these machines become commonplace. But with limited financial resources and little training time, treasurers will be able to automate a series of tedious and time-consuming processes and, ultimately, enhance their team’s everyday working practices.

The cost of a robot is ultimately low, around €5,000 for several single processes, plus configuration and training costs. What might have seemed impossible, and even frightening, not long ago has now become simple and attractive. In this strange world of ours, everything is changing constantly, even our perception of machines. To sum up, I’ll leave you with the words of the late, great Bruce Lee: “Be self aware, rather than a repetitious robot.”