Driven by digitisation, connectivity, and collaborative ecosystems, many industries are seeing long-standing boundaries blurring or dissolving altogether. The art of the possible is expanding, opening the door to entirely new business models. Treasury needs to adapt to the impacts on liquidity, funding, and risk management needs as new business models change the company. This has already been happening in some industries and seems set to become even more pervasive.
Meanwhile, treasury departments are always pressed to be more efficient and effective. Many treasury teams are focusing on what is being made possible by emerging technologies, such as robotic process automation (RPA), big data, artificial intelligence (AI), machine learning (ML), and distributed ledger technology (DLT). This is also a time of change in financial services, with a wide and growing range of emerging options such as instant payments and application programming interfaces (API).
As more and more financial flows move to ‘real time’, treasury leaders will need to take a fresh look at how they organise and manage treasury functions – from liquidity management and financial risk mitigation, to better preparation for cyber threats – to ensure investments in technology properly support more highly inter-connected processes.
Treasury teams realise there is much at stake in the outcome. A recent survey conducted by Citi, Digitization for Corporates revealed that, from a digital readiness perspective, 64% of companies have a formal digital strategy at the enterprise level. Just under a fifth are formulating a strategy at the treasury level. The most common focus areas are transformative improvements in automation and efficiency, and in data-driven insights for more effective decisions. Perhaps unsurprisingly, the biggest hurdles are in integrating systems and getting the right resourcing and staff skill sets.