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Digital treasury: A future state vision

Authors: Eric Cohen – Principal, Adam Taplinger – Director, Jim McCormick – Manager, and Rachel Blumenthal – Consultant, all PWC For many of us, digital, mobile and cloud technologies have become integral to our daily lives with hand-held devices emerging as new, digital appendages. As we look to the horizon, emerging products and services that leverage

  • Eric Cohen
  • January 4, 2018
  • 7 minutes

Authors: Eric Cohen – Principal, Adam Taplinger – Director, Jim McCormick – Manager, and Rachel Blumenthal – Consultant, all PWC


For many of us, digital, mobile and cloud technologies have become integral to our daily lives with hand-held devices emerging as new, digital appendages. As we look to the horizon, emerging products and services that leverage these and other technologies such as autonomous cars, unstaffed retail outlets, electronic medical records and digital wallets are moving closer to widespread adoption. These technology changes are also beginning to make their way into the workforce, transforming how we work and the nature of work itself. Corporate treasury is not immune to these changes and, indeed, how treasury delivers on its mandate to optimize financial assets and liabilities, drive cash flow improvements, process cash transactions and manage financial risk is on the precipice of profound change.

As is the case in their personal lives, the business landscape for corporate treasurers is also changing rapidly as many of the same underlying technologies are starting to be deployed in the treasury business ecosystem. A Digital Treasury Ecosystem, where the CFO or Treasurer makes real-time financial decisions on their tablets, is not far beyond the reach of currently available technology. In such an ecosystem, there is no direct reliance on banking partners, the company’s broader organization, the human capital deployed or the manual processes in place to supply data or execute transactions – just an executive and an interactive dashboard powered by interconnected digital technologies. 

The core objectives driving digital transformations in our day-to-day lives are not new; individuals still want to travel, purchase goods, execute transactions, securely store and access information and be delighted in their consumer experiences. Similarly, the mission of the treasury function, and objectives behind digital transformations have not, and should not, change. 

While the objectives should remain the same, the means by which treasury achieves these objectives will change through the application of a digital toolkit. These technologies, when implemented, will create a connected ecosystem that leverages advanced capabilities and analytics to enhance decision making and drive actions that are delivered with minimal human touch points via robust digital technologies. 

Elements of the Digital Toolkit

When we talk about the “Digital Toolkit” we are referring to a set of complementary technologies (e.g., Blockchain, IoT, RPA, Cloud, etc.) that can be leveraged either individually or in combination to enable a “Digital Treasury” organisation. 

The connecting element between all of these digital tools, automation, is key to the toolkit’s value proposition for corporate treasurers. Similar to the introduction of autopilot to the airline industry, technology enables treasurers to move from “taking the stick” in providing human judgment and executing critical actions to using “auto-pilot” to perform daily treasury operations. This will free their time to identify areas of additional value in response to the external environment and align with changing company strategy. By applying the Digital Toolkit to the Treasury operating model, companies can achieve operational excellence and reduce cost while leveraging human capital and business insight for their competitive advantage.

Applying the Digital Toolkit to the treasury operating model

To bring the Digital Toolkit to life in treasury, it is useful to examine the treasury operating model and consider how the elements of the toolkit can be applied within the treasury organisation and its key process areas. By doing so, we can quickly form a view of what the Digital Treasury may look like in practice.

Applications of the toolkit can be derived in numerous ways, whether it be a single use application or a combined set of capabilities delivering an enhanced solution. For example, blockchain will change the manner with which treasury departments interact with counterparties and drastically reduce processing time; maintaining security and controls in areas such as transaction execution and bank account administration. Blockchain could also reduce, and possibly eliminate, the need for reconciliation activities in the future, as the transactions are hosted on a shared ledger. In addition, cloud technology and RPA may be able to streamline and enhance the process for gathering, aggregating and reporting on exposure data. Artificial intelligence could also reduce the human capital required to perform advanced analytics and determine the optimal strategies for managing financial risk. As both the Digital Toolkit and the treasury function continue to evolve, additional possibilities for digitising treasury operations will continue to present themselves, thus the opportunity to harness the Digital Toolkit is upon us.

The Digital ToolKit in action – financial risk management

An example of how the Digital Treasury comes to life can be demonstrated through a typical financial risk management process (see below) from the initiation of an underlying commercial contract to the execution and financial statement realization of a derivative transaction. The Digital Toolkit transforms the financial risk management process from one that is rigid, inefficient, and expensive into one that is user-friendly, flexible, and value-enhancing.

While the scenario above highlights benefits that can be achieved across the transaction lifecycle within the area of financial risk management, digital tools and technologies can be applied across the entire spectrum of the treasury operating model, drastically changing the way treasurers deliver value to their stakeholders. Ultimately, by implementing solutions that leverage the Digital Toolkit in this manner, organizations can now harness technology for productivity and efficiency gains. Incremental to financial risk management, a treasurer should look at cash flow forecasting and trade finance as prime opportunities for digital transformation.

Through a new set of capabilities, treasury can transform and solve business objectives in a dynamic marketplace. As PwC’s Global Digital Leaders, Chris Curran and Tom Puthiyamadam stated,

The journey forward

The transformation journey can, and should, start now in order to achieve the Digital Treasury ecosystem of the future. By investing in the building blocks today, specifically by defining a vision and partnering with internal and external stakeholders, a treasurer has the ability to define the future state vision and the roadmap to achieve it.

To begin the journey to digital transformation, treasury can pursue the following actions today:

a) Identify opportunity areas: Define goals and success factors for implementing the Digital Toolkit, confirm use case(s) for proof of concept (POC), and determine which product and/or customer segment offers the highest value to support POC validation.

b) Align internal stakeholders across a common set of objectives and expectations: Topics of alignment would include IT strategy and policy, inclusive of cyber and security risk, broader finance functions (e.g., FP&A, Accounting, etc.) and business support services.

c) Perform a competitive landscape assessment evaluating external partners (e.g., Banks, vendors, etc.): Considerations should include current and future product mix, connectivity, security controls, and interface capabilities.

d) Harmonize and standardize master data: Begin to integrate transactional data into well structured repositories that can be immediately leveraged, yet also ease the transition to future tools as data analytic capabilities and products evolve. This will allow for enhanced analytical and reporting capabilities, inclusive of spotlighting process areas ripe for reengineering and streamlining.

e) Identify technology for enhancement and/or implementation: Treasury functions should identify sophisticated interface solutions that can be bolted on or enhanced when preparing an ecosystem for technological overhaul.

f) Execute a POC and pilot: Conduct technology experimentation in a sandbox environment to validate enhancements for future treasury implementations.

It is no secret that transformations of this magnitude can be long and arduous, as they typically require multiple phases, technological advancements, and cross-organizational coordination before the benefits can be realized to the fullest extent. While many barriers will be encountered along the journey, a proactive, structured approach to addressing and overcoming these barriers will enable realizing the Digital Treasury that delivers a true competitive advantage for the organisation.