Giving Treasury a Fighting Chance

A Beginner’s Guide to the Automation Game

Automation offers treasurers a chance to make processes more efficient, save time and money, and enhance controls around cash management. For those just embarking on such a journey, understanding where to start and defining the goals is essential for a successful outcome.

In today’s rapidly evolving financial landscape, automating treasury processes has become a game-changer for companies of all sizes. Whether small teams are looking to maximise efficiency or large corporates are streamlining complex workflows, the benefits of automation in treasury operations are undeniable.

Parvathy Ramachandran, Co-Head Workflow Solutions EMEA, Deutsche Bank, reflects: “Not all corporates have the luxury of huge treasury teams, so technology is one of the key tools to help drive efficiency and do more with less.”

The trend towards automation, accelerated after the pandemic, is revolutionising how treasurers execute their tasks. Today, advanced tools give companies access to faster and more effective decision-making.

This efficiency boost, Ramachandran notes, extends across critical treasury functions including financing, hedging, and investment decisions. Automation speeds up these processes and enables teams to focus and work in more structured and precise ways.

Alex Wong, Head of Product Management for Corporates, Global Payments Services, Bank of America (BofA), highlights operational efficiency as the most apparent benefit. “Automation streamlines repetitive and time-consuming tasks, such as data input or transfers, entering payment details, and receivables matching.” This frees up treasury teams to focus on more strategic activities, including risk management and value-added tasks, rather than being hamstrung by manual, repetitive work.

Importantly, Wong points out that while automation naturally leads to cost reductions, the goal is not to cut headcount. “The aim is to redeploy treasury talent toward higher-value tasks that improve decision-making and risk mitigation,” he emphasises.

Risk mitigation is another significant benefit. Automation dramatically reduces the chances of human error, particularly in manual data entry and cash-flow monitoring. It also allows for greater control and standardisation across processes, ensuring treasurers can trust the data they’re working with.

Alexis Holland, Senior Product Marketing Manager, OpenText, echoes this, noting that “when it’s time to automate, a lot of risks are reduced. From minimising human error to improving data visibility, automation is key in mitigating operational risk”.

Treasurers can better manage their cash positions and forecasts by reducing manual interventions, which is particularly vital in today’s volatile market environment.

Jennifer Wan, Head of UK Sales for Global Payment Solutions, EMEA, BofA, emphasises that moving toward real-time decision-making is one of the biggest trends shaping treasury management. “Automation should be considered to help leverage real-time tools as part of an effort towards ‘on-time’ treasury management. Treasurers must be in a position where they can respond quickly, and automation will help to facilitate this.”

Map the journey

As corporates seek to modernise their treasury operations, the path forward can differ for every organisation. Therefore, understanding the specific company’s needs is crucial before launching into automation.

Holland asserts: “First, identify every point in the treasury journey that involves manual or paper-based processes.” The focus should be on assessing internal operations and selecting a partner that aligns with the company’s vision.

Processes such as cash management, payment processing, and reporting are prime areas for technological assistance. Automating cash positioning and forecasting, for example, can yield significant improvements in efficiency and accuracy. Streamlining workflows in payment processing to reduce errors and enhance security is another critical area on which to focus.

Ramachandran echoes the view that payment processes are a logical starting point for automation. “The entire process – payment initiation, authorisation, and transmission – can be centralised and streamlined through automation,” she explains. “This is something that we see many corporates embarking on as the first step towards automation.”

Reporting is another prime candidate. Consolidating and automating how insights are gathered from multiple sources will provide real-time visibility, enabling more informed decision-making. However, it is crucial to integrate systems securely, whether through APIs or other methods, to ensure data safety.

Pedram Tadayon, CEO, Mitigram, underscores the importance of leveraging expert insights early in the automation process. “The worst-case scenario is when treasurers attempt to replicate their existing manual processes digitally without considering best practices,” he warns. Treasurers might consider engaging with vendors to learn how leading-edge tools can solve problems more efficiently rather than looking to digitise what might be outdated workflows.

Tadayon also cautions against focusing solely on reducing headcount through automation. Instead, the goal should be enhancing productivity by redirecting FTEs to more strategic tasks. “It’s about improving efficiency and reducing errors, not replacing FTEs, but enabling them to focus on value creation and utilising working capital more efficiently,” he emphasises.

Wong highlights the advantages of automating repetitive and time-consuming tasks, particularly those that could be prone to human error. “As organisations grow, manual processes can become more cumbersome and complex, so starting automation early lays a solid foundation for scalability.”

One such task is reconciliation. “Automation allows for quicker identification of matching transactions, enabling treasurers to focus on exceptions,” Wong explains. He points to innovations including ML and AI, which further improve exception management and, ultimately, cash flow.

Cash positioning and forecasting are also ripe for automation. Integrating data from multiple sources accelerates these processes and enhances accuracy. Tasks that involve high transaction volumes, such as intercompany netting and reporting, are other areas where automation can deliver quick wins.

Liquidity management is another area where automation can deliver significant operational enhancements. Whether funding a business or repatriating cash, automated liquidity solutions can support centralised and streamlined cash control.

Wan reveals: “We still hear of manual and repetitive work being undertaken in treasury when a business unit requires funding. This can be a good starting point for automation.”

Automation doesn’t have to be complex to deliver results. For some companies, starting with an activity as simple as using templates to reduce keystrokes can be an effective first step. At the other end of the spectrum, more advanced solutions such as AI can provide predictive insights to inform treasury decisions.

Fine-tuning predictions

As treasury teams embark on their automation journey, certain technologies stand out for their ability to enhance operations. APIs are a prime example. Having long been a cornerstone of system integration, their utility in treasury automation has grown significantly and can help teams enhance their risk and liquidity insights, enabling better decision-making.

Tadayon explains: “In the past, integrating a new ERP or treasury system required a large investment in custom coding. With modern API technology, integration can be completed in a few days.” APIs enable systems to seamlessly communicate with one another, reducing the time and cost associated with system interoperability.

Wong adds that APIs are particularly beneficial for gathering and transmitting data internally or with banking partners. “Many banks are developing various APIs, particularly for that real-time connectivity,” he notes.

As data volumes grow, AI and ML are are becoming crucial tools for treasurers. Tadayon highlights their role in organising and analysing large datasets. “AI helps identify errors and uncover trends within the data,” he says, pointing to the increasing importance of these technologies in treasury functions.

Wong emphasises that ML’s ability to perform predictive analytics makes it especially useful in cash flow forecasting and liquidity management. “With ML, treasury teams can move beyond simply processing historical data and start predicting possible future outcomes,” he says. AI-powered tools also enable treasury teams to manage exceptions more efficiently, allowing for better decision-making in real-time.

A TMS or ERP system can often be the backbone of treasury automation efforts. Ramachandran points out that many corporates already use these systems but may not fully leverage their automation capabilities. “Investing in a strong, standardised single source of truth for global cash positions is one of the biggest technology levers,” she says, noting that companies with multiple instances of ERPs often struggle with data fragmentation.

Wong agrees, adding that many treasuries already have automation capabilities built into their existing TMS or ERP systems but may need to collaborate with providers to unlock their full potential. “If a treasury is relatively young or still scaling, it’s an ideal time to consider these systems, as they often have automation built in,” he advises.

For tasks that are repetitive and rule-based, RPA can offer an immediate solution. “RPA is ideal for automating tasks such as  data entry, report compilation, and scheduling,” says Wong. By automating processes that follow consistent rules, treasury teams can significantly reduce errors and improve efficiency.

Holland stresses the role of cloud computing in offering flexibility as organisations grow. “Cloud solutions provide the scalability that treasurers need as they advance along the automation journey,” she explains. “Moving to the cloud can also streamline operations by breaking down data silos and enabling real-time data access, which is crucial for decision-making.”

As treasurers look to automate, replacing manual, paper-based processes with electronic documents is critical. Tadayon notes that digital documents are crucial in trade finance, where physical paperwork still plays a prominent role. “There are companies that, instead of having paper, are creating digital documents,” he says. “This space will continue growing because the actual document is an essential processing element in trade finance. This is something treasurers should be looking into.”

Treasury departments often sit on vast amounts of data, but without automation, it is highly likely that they are not harnessing it effectively.

Holland asserts: “Any tool that can turn raw data into actionable insights should be a priority. Data analytics tools will help treasurers capitalise on this data, enabling better decision-making.”

Feel the fear – and do it anyway

While automation promises significant gains, certain common implementation obstacles can be encountered. One of the most pervasive challenges is resistance to change, particularly when processes have existed for years.

“There’s always going to be resistance, no matter the industry,” Holland observes. “People worry about whether automation will replace them or if it will really help.”

This fear can slow down adoption, making change management essential. Tadayon echoes this sentiment, emphasising that treasurers must communicate the benefits clearly: “It’s not about cutting jobs but creating more time for the team to focus on value creation.”

Wan points out that by its very nature, treasury is focused on managing risk. “As the amount of change required to facilitate automation expands, we find that some organisations are opting for a ‘lift-and-shift’ approach when migrating to new systems – implementing technology first and optimising later. This strategy can help manage the operational risks that can arise when making changes.”

Another hurdle treasurers face is making a compelling business case for automation. Ramachandran explains that articulating the benefits and putting tangible numbers to them can be difficult. “Whether it’s the savings from a leaner account structure, centralised liquidity, or faster decision-making, the benefits can sometimes be intangible,” she says. This makes it challenging to justify the initial investment, especially when competing with other business priorities for limited resources.

Wan highlights treasury’s struggle to sometimes secure IT support, often competing with other departments for funding. “Treasury can be seen as complementary to the business, so getting IT resources can be tough,” she admits. Treasurers should build relationships with their IT departments and ensure their business cases are thorough and demonstrate clear benefits.

Data integration is another common stumbling block and a factor that technology providers do not always prioritise. Holland warns: “Data integration is critical, and there are so many ways it can go wrong if not carried out properly.” Treasurers must choose vendors with strong integration capabilities or risk disruptions in their processes.

Once integrated, the quality of the data itself becomes a central concern. Setting up robust data governance frameworks is essential, ensuring that only the right people have access to and can modify critical information.

Wong adds: “The quality of your input will affect the quality of your output.” This underscores the point that even the most advanced technology can’t compensate for poor data.

Compliance with regulations is another challenge, especially for global organisations. Treasurers must ensure any solution they implement meets the necessary regulatory standards. Without this assurance, automation can expose organisations to legal and financial risks.

A lack of in-house expertise can derail even the best-laid automation plans. Holland points out that many projects become more complex than initially anticipated, leading to errors and long-term impacts. “Treasury teams must ensure they have the right expertise on hand or partner with vendors that do,” she advises .

Treasurers attempting to keep automation projects in-house sometimes need assistance with the technical challenges. Bringing in external expertise or selecting a vendor with the right capabilities is essential. However, treasurers face a crowded marketplace of potential partners, so it can be challenging to identify with the best candidate for the task.

Wan warns that treasury departments can quickly become overwhelmed by the sheer number of options. “Treasurers don’t  want to be inundated with vendor management requests because they need to focus on their treasury role.”. At the same time, they must navigate the landscape to find the best-fit solutions.

Choosing the right vendor is key, especially when ensuring seamless integration, security, and ongoing support. Treasurers must balance the need for innovative solutions with the practicalities of managing these relationships.

Teamwork makes the dream work

When embarking on an automation journey, treasurers often rely on various third parties – from banks to software vendors – in their quest for a successful outcome. However, ensuring these relationships run smoothly requires strategic planning and collaboration.

One of the most critical relationships in any automation project is with the internal IT department. Wan stresses the importance of involving IT from the outset, not just when issues arise. “Don’t make the mistake of engaging the IT team only when you need them,” she warns. “They should be partners on this journey and understand the direction of travel. It’s not just a one-time engagement.”

Treasury teams are increasingly hiring staff with IT backgrounds to ensure they can keep pace with evolving technology. However, building strong personal relationships with IT team members, not just contacting them in a crisis, should be high on the agenda.

For treasurers looking to reduce the complexity and cost of automation, initiating a conversation with existing providers is the best, and logical, starting point.

Wong expands on this point: “Talk to your current software providers or banks about what they already have.” Many banks offer built-in solutions such as cash flow forecasting, reconciliation, and netting. “Often, these services don’t require significant integration or effort – sometimes it’s as simple as switching it on.”

By leveraging what’s already in place, treasurers can focus on optimising processes rather than starting from scratch and, of course, save time and money.

Choosing the right external partner is obviously critical, but not all vendors are created equal. Holland highlights the importance of selecting a vendor with relevant experience. “In treasury, the data being handled is extremely sensitive, so it’s important to scrutinise whether a vendor has experience with businesses of your size and complexity,” she stresses. A partner with experience in smaller businesses may not be knowledgeable enough to handle a global corporation’s needs.

The scalability and flexibility of partners and systems are also essential. As businesses expand globally, their treasury needs become more complex, involving challenges such as currency exchanges and regulatory compliance. Treasurers must ensure that any vendor they choose can grow with their business and meet these evolving demands.

Another vital factor is support. Understanding whether a vendor will provide ongoing training and implementation support should be established before a partnership begins. “Treasurers don’t want to implement a solution and then never see or hear from the provider again,” Holland points out.

In today’s business environment, treasurers increasingly turn to external partners for advisory services. Ramachandran highlights the value of engaging banks as advisers that can share best practices and insights on new technologies. “Treasurers want to know what other corporates are doing and what new technology is out there,” she says. “Banks can play a pivotal role in helping treasurers understand industry trends and optimise their treasury transformation efforts.”

Reimagine, streamline, and innovate

For treasurers beginning to explore automation, it is essential to take the time to define a clear vision of what any technology project is aiming to achieve. This requires a comprehensive understanding of current processes and future goals.

Wan asserts: “Be clear about your goals and map them out.” Treasurers should assess their current processes to optimise them before integrating automation. “A poorly designed manual process will only carry forward inefficiencies into an automated system,” she warns.

Automation is not a one-off project; it is an evolving journey. Wong underscores the importance of continuously monitoring and refining automated processes to ensure they remain effective. “Validate what you’re doing and modify as you need to,” he advises. “Not everything will work perfectly from the start, and small adjustments will likely be needed along the way.”

These iterations, while incremental, are essential to maximise the benefits of automation. “Make sure you’re receiving the benefits you expect and that your processes remain compliant throughout,” Wong adds.

Tadayon advises treasurers to take a long-term, strategic approach to automation. “The step from paper-based, manual processes to digital is a long one ,” he acknowledges. Rather than attempting to transform everything at once, he recommends breaking the journey into manageable legs. “Digitise one old paper document and the surrounding manual process, and then move forward from there.”

A pivotal part of this strategy involves collaborating closely with vendors to build workflows tailored for the digital world rather than simply transferring manual workflows into new systems. “Those manual processes were built decades ago, without today’s tech capabilities in mind,” Tadayon points out. “Treasurers should reimagine processes with technology in mind, using automation to streamline and innovate rather than replicate outdated methods.”

For Holland, the need for automation is no longer a question of if but when. Treasurers who are quick to adopt automation will be best positioned to reap its rewards. “The future of treasury is very digital,” she asserts. “Whether it’s mitigating risk, boosting productivity, or enhancing decision-making, the benefits of automation are too great to ignore.”

The move to treasury automation also has a competitive advantage element. Those who are eager to embark on their automation journey will likely find success early – and often.

“Some organisations are implementing AI while others are still very reliant on paper-based processes,” concludes Holland. “For the latter, the need to ensure the gap is closed so they have a fighting chance is huge.”