A decade ago, the possibility of real-time, digital treasury was just a dream. Today, it is very much a reality. Maggie Li, General Manager, TCL Finance Company and Calvin Matundura, Treasurer, Safaricom, along with experts from Standard Chartered, discuss the treasurer’s role in driving digital adoption.
Digital business models and 24/7 instant payments mean that treasury now runs around the clock all year. As a result, treasury functions must digitise their operations, automate workflows, and embrace innovation. But how can they do this against a backdrop of constant change? And what are the key milestones to achieve along a digital treasury journey?
1. Synchronise with the business
It’s no secret that business models are changing – and becoming increasingly digital. To make the most of this shift, Lisa Robins, Global Head, Transaction Banking , Standard Chartered, advocates that “treasurers think about their internal customers in the same way that a bank might think about a treasurer. It is important to mirror what treasury’s internal ‘clients’ are doing – and that means adopting digitisation and automation”.
Li agrees, explaining that with a worldwide footprint like TCL, it is vital for treasury to be in step with the business. “We invest a lot of time in better servicing our subsidiaries. We have turned to digital solutions to help us do this with maximum effect, because online servicing is what’s required in the digital world. We have to keep pace with what the business needs to enable it to grow.”
For Matundura, the advice is to “focus on digitising treasury in whatever way you can to help the business”. Implementing the right technologies, he says, “will save a lot of time, increase your accuracy, and improve your customer experience – all while helping the wider organisation”. In addition, he says, technology “will enable more process analysis, allowing treasury to continue improving”.
2. Benchmark available technologies
The treasurer’s conundrum is how to choose between available technologies – and how to know which digital solution will be best for today and tomorrow. Robins notes: “The treasurer requires a digital ecosystem that is sustainable and scalable. Banks can help treasurers determine which technologies might be best suited for them based on benchmarking, best practice, and knowledge from like-minded clients. Banks also have experience using many of these technologies themselves, as we have already done much to digitise our own back offices.”
Peter Wong, Executive Director, Structured Solution Development, North Asia, Standard Chartered, adds: “Taking the time to evaluate potential treasury technologies with banking partners can make the implementation journey much smoother in the long run – and lead to a more sustainable digital set-up overall.”
With increasingly huge transaction numbers to manage, Matundura says Safaricom looked at different solutions, but with the help of Standard Chartered, chose to implement an AI-based bank reconciliation system. With the system able to continuously learn, it enables automated matching many more transactions. “It has not only brought speed and accuracy to reconciliations, saving on many FTEs, but has also optimised our working capital, improved our customer experience, and it provides us with deeper transaction analysis. We’re glad we took the time to find the right solution.
3. Build a connectivity ecosystem
A digital treasury journey is no longer about connecting to a handful of banking partners. Ricky Kaura, Head of Transaction Banking Asia Pacific, Africa & Middle East, Standard Chartered, explains: “It’s about joining the dots between all of treasury’s key stakeholders and building a seamless, secure and transparent environment for managing cash in real time. Treasurers therefore need to think outside the box around connectivity options and explore ways to achieve their goals in an efficient and effective manner, just as Maggie and her team at TCL have done.”
Li elaborates: “We work with 120 banks. It’s simply not possible to have a host-to-host connection to all of them. So, we leveraged robotic process automation [RPA] to help us gain visibility over all of our bank accounts. The RPA enables us to have an automatic log-in to various e-banking systems and download statements quickly. The technology has helped us to save labour costs and increase efficiency. We now have 119 bank accounts, across 43 banks, covered by two RPAs. It’s a low-cost solution that has enabled us to be nimbler and much better connected to our key counterparties.”
Kaura adds: “Working with a ‘connector bank’ like Standard Chartered can also assist here as we join together fintechs, clearing systems, payment providers, and clients – in a trusted environment.”
Matundura comments: “We were one of the first companies in Africa to use host-to-host integration between our ERP and Standard Chartered Bank back in 2006. It has served us very well, enabling straight-through processing of payments and reconciliations which, for us, is excellent.” He adds that Safaricom now has integrations with a number of other systems, such as Bloomberg which helps automate its trade bookings. “This technology ecosystem is definitely key to success when it comes to smart treasury.”
4. Prioritise security and automate to mitigate risk
The rapid advancement of technology naturally brings with it a rise in cybercrime. Kaura comments: “Every treasurer is aware of cyberthreats and the majority train their teams well on these issues. But as more intricate ecosystems are created and digital business models flourish, data privacy and data security will be ever more critical. Automated solutions and processes can assist here, especially when it comes to digital payments, since they reduce the need for manual intervention and ensure that data remains secure end-to-end.”
5. Invest in diverse human intelligence
Wong notes: “Technology can only be an enabler when you have the right people with the right skills to make the most of the digital environment.” Kaura echoes this, adding: “Yes, technologies like application programming interfaces [APIs], enable systems to be seamlessly connected, but people are the real glue between technologies. A great treasury team – consisting of a diverse set of individuals – will proactively assess how technology could solve current treasury pain points. But they will also look for opportunities to leverage technology for competitive advantage, enabling the business to shine in a crowded marketplace.”
Further smart treasury insights
This article is based on a recent podcast hosted by TMI. For more examples, insights and tips, listen to the full discussion here.
TMI and Standard Chartered will be publishing additional podcasts and articles on the topic of smart treasury in the months ahead – visit our dedicated microsite for more details.
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