Reaching the Next Level of Treasury Digitisation

Corporates all over the world have had to react quickly to the challenges posed by the Covid-19 pandemic. In a practical sense, this has meant seamlessly switching to remote working and virtual treasury operations. The digitisation journey that treasurers have been on in recent years has played a key part in making this a success. Karen Braithwaite, Global Head of Transaction Banking, Corporate Banking at Barclays, explains how moving forward with digitisation can bring even greater benefits.

Eleanor Hill, Editor, TMI (EH): How have companies coped with the swift change from physical to virtual treasury operations as a result of the Covid-19 pandemic? And what has Barclays done to support this?

Karen Braithwaite (KB): When the pandemic hit and our clients started working remotely, naturally one of their main priorities was gaining access to the systems and tools they required. The majority of our clients were already using our online banking application, which made life easier for them. But to enable them to have remote access to all Barclays online channels we sent out a guide, together with a free software download. To put a sense of scale on the need here, we have seen around 60,000 software downloads since the start of the pandemic.

To maintain security when working remotely, around 10,000 additional smart cards or finger vein readers, for biometric account access, have also been sent to clients. We have also seen a huge uptake in digitally enabled servicing requests, with 88% of our digital servicing requests being processed by our online servicing module. This, in turn, led to our clients receiving quicker responses, since there was a commensurate reduction in calls into our servicing centre, so our teams were freed up to deal with the really critical issues for clients.

Thanks to internal collaboration, we were able to allow additional paperwork to be accepted by our digital signing channels. Our key focus was to enable our clients to get up and running, so that they could get on with their day jobs.

EH: Do you think that the increased use of digitally enabled servicing requests will continue once we get back to some level of ‘normality’?

KB: Yes, I think it will. Remote working – and accessing systems and data digitally – is going to be with us for a while. I don’t believe that behaviour will revert immediately to pre-lockdown norms and post-lockdown norms will likely involve a higher degree of remote working. Also, clients are now starting to understand the full benefits of digital channels. Our digital proposition has always been about customer choice, never about mandating. But now that treasurers have had to increasingly use online channels, they are realising that digital is actually the optimal way to work.

We’re seeing a mindset shift in other areas too. For example, there has been much less use of physical cash and cheques in order to help stop the spread of Covid-19. This has driven clients towards electronic payments, which is something we’ve been encouraging clients to do for many years – but now we are seeing accelerated take-up. These digital alternatives are less costly for clients and provide real-time data, so there is a huge benefit and I don’t see treasurers wanting to fully revert to pre-crisis methods.

EH: How has treasury evolved in recent years to become more digital – and how has this helped prepare them for the current situation?

KB: The treasury digitisation journey has been ongoing for some time, but it has received an exponential push over the past three months. Traditionally, industry segment and geographic reach have been key drivers of digitisation, with larger multinationals generally further ahead in their digitisation journey. In those international organisations, treasurers have been used to working with digital tools and remote colleagues, as well as transaction banks across different countries. That has driven their use of digital tools and helped them to be in a relatively good position to quickly carry on business as usual when the pandemic hit. Interestingly, the pandemic will result in a levelling of the playing field, somewhat – so smaller organisations and those in less tech-savvy industry sectors could catch up with the early movers, and that will be a trend to watch.

Use of solutions like virtual accounts has also been a significant plus for treasurers during the current crisis. Virtual accounts put the power in the hands of the treasurer around opening and closing bank accounts and moving funds across company subsidiaries in a way that they’ve never been able to do before. This reduces the amount of time and information normally needed to open an account, which is perfect in a time of crisis – and I believe we will see even greater use of virtual accounts post-pandemic.

EH: How has treasury’s role within the organisation changed as a result of digitisation

KB: The role of the treasurer has, in the past three to five years in particular, become far more strategic and has been recognised as such within organisations. Treasurers are very much at the heart of both shaping and delivering company strategy. In the past, this additional focus could have been a distraction to the regular day-to-day running of treasury, but digitisation has enabled treasury departments to become more streamlined and employ fewer people, whilst also hiring  the right skillsets to shape the future of the business. On that note, I can absolutely see a data analyst sitting at the heart of a treasury team in the future, but there may not be a raft of back office reconciliation staff as there would have been in the past.

EH: What can treasurers do to reach the next level of digitisation? Which technologies might they want to explore for the future?

KB: Treasurers invest a huge amount of money into treasury management and enterprise resource planning systems, and in my view, time would be well spent maximising the return on that investment. This could be achieved by more fully integrating and automating the movement of data, through SWIFT, through host-to-host, and increasingly through application programming interfaces (APIs), for example. So that is one piece of work which needs to continue in the vast majority of treasury functions.

Real-time treasury management is another key issue. Treasurers want to know their cash position at any time of day, not just at the end of day. And this kind of intra-day cash position is increasingly possible – the treasury team simply pings an API and receives that information back in the format that they want and can digest. This trend is being driven by real-time payment systems that have the capabilities to move money around the world in less than 10 seconds.

This instant information is changing the way that liquidity management is handled and therefore the way that treasurers operate. And as I mentioned earlier, traditional bank accounts can be replaced by suites of virtual accounts, which means treasurers can also handle new account opening in minutes. Capabilities such as this, combined with API integration into TMS and ERP systems is taking us towards 24/7 liquidity management – and that’s the real sweet spot for treasury teams.

EH: What is Barclays’ role in supporting treasurers to make the most of the digital tools available to them?

KB: As we all know, transaction banking services are essentially commoditised. The fundamental differentiator for us is the extent to which our client experience is intuitive and digital in nature. That is why we’re investing so heavily in our digital strategy. A key part of this is our mobile proposition. Everything that an individual can do to verify their identity on their phone to access online banking and be able to make payments, we want to be able to offer that kind of capability on multiple devices to our corporate clients.

Our digital focus is also foundational in our drive to expand our geographic footprint in Europe with a unified, streamlined European cash management platform.  This platform is now live across 8 countries in Western Europe (not counting the UK), with Belgium our latest addition. Having a state-of-the-art technology platform in place to support European corporates will mean our clients’ experience is absolutely the same wherever they happen to be, whether that’s in Germany, Portugal, Spain or beyond.