Co-Creating a Digital Treasury: Myth vs Reality

Many discussions around treasury technology focus on the leading-edge developments made by a handful of highly sophisticated treasury functions. Meanwhile, the majority of treasury departments are struggling just to achieve the basics. Could co-creation between banks and corporates offer a simpler path to embracing digital treasury innovation?

Visibility and control remain key for treasurers looking to produce an accurate, timely cash flow forecast. Yet a large number of treasurers – even in centralised organisations – still lack the ability to do this. In fact, for many, even collating a complete list of bank accounts can be a challenge.

Hurdles include a lack of visibility over the company’s payment and collection ecosystem and data which is often fragmented, not to mention inaccurate and out-of-date. And in instances where treasurers are lucky enough to have access to this data, many lack the analytics to use it effectively.

Given these challenges, and often illusive technology budgets, some treasurers are turning to their relationship banks to assist. After all, banks are already required to have a consolidated view of client activity for regulatory reasons, so leading banks are now packaging this data, together with analytics, for their clients. Analytics functionalities might include anything from evaluating STP rates to assessing payment methods in terms of cost and timing, and determining optimal bank account and liquidity structures.

Working in tandem

A handful of corporates are taking the technology journey with their banks a step further, according to the 2019-2020 Journeys to Treasury report produced by BNP Paribas, the EACT, PwC and SAP. Rather than simply making use of digital services provided by banking partners, they are co-creating solutions that suit their treasury needs and work towards the greater good of the larger treasury community.

Michel Verholen, Assistant Treasurer, Zoetis, explains his experience of co-creation: “We had a number of inefficiencies in our operational and compliance processes and recognised that digitisation was the only way to overcome them. We are delighted to have the opportunity to collaborate with banks such as BNP Paribas on various digital initiatives to improve our workflows.”

In order to get the most out of this collaboration, Verholen joined BNP Paribas’ Treasury Board, an advisory board of senior treasurers from across Europe which enables peers to explore and address treasury pain points in a co-creative way. One of the projects he has undertaken with this group tackles the long-standing challenge of streamlining the way that treasurers exchange documentation with their banks.

Verholen outlines the issues: “We have a repository of data, either stored as scanned or hard copy documents, but it is very difficult to confirm whether we hold the same information as the banks. We do not currently use digital signatures, and it can be cumbersome to send hard copy documentation. Although the processes are largely similar across banks, there may be additional steps in some countries and the documentation burden is high. The process for account opening can be particularly arduous and time-consuming.”

To this end, Verholen has contributed to the co-creation of a digital account opening process via BNP Paribas’ Treasury Board and is “looking forward to leveraging this new capability, which will be far quicker and less labour-intensive than the existing current manual process, next time we need to open a new account”.

The full picture

Another digital solution Zoetis has worked on with BNP Paribas is a dashboard that enables treasury to see all the activities with the bank across the group. “This is something we try to do regularly, but it can be very time-consuming to collate all the relevant data, which may quickly become outdated,” noted Verholen.

When he first saw the early ‘strawman’ for the dashboard, it was difficult to ascertain how Zoetis would use it in practice – and this is often the case with co-creation projects, since there is input from numerous sources. Nevertheless, patience often irons out these creases, as Verholen explains: “As soon as the dashboard was populated with our own data, we could quickly see the value and were able to make decisions to improve our account structures.”

Given his experiences to-date of co-creation, Verholen believes that working with banks to build digital tools to improve the efficiency of their operations and the way that they fulfil their compliance obligations is enormously beneficial. And for those who are a little sceptical of the approach, Verholen concludes with a sound piece of advice: “The treasurer’s role will look very different in the future as digitisation and the use of data develop, so it is extremely valuable to engage now in the digital debate and be able to shape this future role.”