The corporate treasury function is undergoing tremendous digital and technological transformation, triggered by the emergence of new technologies that are redefining the way treasury functions are being conducted. The emergence of Instant Payments, Process Automation, Open Banking and APIs will propel the treasury function from ‘managing transactions’ to the higher trajectory of ‘managing strategic drivers’. This transformation will grow the remit of treasury managers to that of a finance technologist and drive working capital optimisation, proactive risk management, automation, and data analytics to support strategic business drivers.
These technologies have become cheaper and more accessible than ever, to rapidly deliver tangible value to treasurers and business heads alike. With a number of regulatory bodies rolling out initiatives that are geared towards real-time settlements and banks increasingly using technology as a differentiator, corporate treasury management is ripe for disruption.
Changing tyres on a moving truck
Despite a conducive ecosystem and easy access to technology, treasurers may face several challenges in embarking on the transformation journey. These challenges range from legacy infrastructure and fragmented ERP/TMS deployment to lack of awareness on how to leverage technologies. For example, Excel spreadsheet continues to be one of the dominant tools used by treasury in various companies. In addition, treasurers are having to deal with the growing cost of compliance, geo-political unrests and fluctuating interest rates which push transformational initiatives and corporate IT investments down the priority list. As a result, treasurers often refrain from making transformational changes to their systems and business processes.
How can treasurers adopt technology and banking innovations to their advantage, while not disrupting their business? Can treasurers ‘change tyres on a moving truck’?