The future of treasury

By Madhvi Mavadiya | 7 December 2016

Here are some insights into what a few treasury management systems providers are predicting for the future.

Do you believe that treasury is truly being innovative in 2016?

Philip Pettinato, Chief Technology Officer, Reval: Innovation, while really a relative term, generally means coming up with a better way of doing something you do now. In that respect, I think many companies are turning to treasury technology to help them better manage treasury and risk.

Companies that are creating a global technology platform are, in essence, laying the foundation for further innovation. We are seeing new implementations of in-house banking structures, enabled in the cloud, which will help them optimise their resources internally and externally in ways they couldn’t before. This cloud-based foundation is enabling treasury organisations to respond nimbly to

regulatory pressures, market events and growth, spending time on analysis that is actionable rather than on gathering data that is out of date by the time they complete the task.

Anis Rahal, CEO, TreasuryXpress: From my perspective, 2016 was the most innovative year I have ever witnessed in treasury. This year, I have observed what I’m going to call the API revolution. With so much innovation by talented and innovative startups, it has now become easy to connect treasury to the systems and services it needs to make a treasurer’s job easier and more resource-effective.

Take market data for instance. Prior to 2016, treasury had to rely on very expensive direct market data platform or they had to deal with resource-heavy data services and integrations from their TMS provider. Today, there is a spirit of accelerated and relentless innovation in the fintech startup space which opens up the opportunity for TMS providers.

Peter Schädelbauer, Head of Product Management, Hanse Orga: I believe that treasury is in evolution, but not in revolution. Things have to be done step by step. There will be many new possibilities through technology and software solutions, with big data, but it will take some time to adopt all of this accordingly.

Will there ever be a future in which treasurers do not use spreadsheets for cash management?

PP: Spreadsheets are a valuable tool to analyse data – they are not a processing platform, especially not the kind of platform global treasury organisations need. Many treasuries are using spreadsheets for operational tasks, but spreadsheets were not designed for this. They don’t provide the right controls and are not the source of data, which people turn them into; they are just for retrieval and analysis of already integrated data.

AR: I believe the purpose of the spreadsheet has changed and will continue to evolve. It will no longer be used for calculations, but it will still continue to be used visually and for information sharing. I was a treasurer for many years and I love spreadsheets. Treasurers love spreadsheets. They understand spreadsheets, but that doesn’t mean they need to or should do their actual work there.

PS: In my opinion, in the near future we can expect to have a real time cash position worksheet that is fully interactive with all the necessary information available. Spreadsheets will not be necessary then.

Has the cloud revolution ended, or has the excitement moved on to another technology?

PP: The hype has ended, but not the revolution. Cloud has definitely gone through its hype cycle, where there are now many different applications of cloud technology that are proven to add tremendous value.

So, it is not so much whether people are moving onto the cloud, but what new technology will evolve out of the cloud itself that will enable value, efficiency, and more capabilities as businesses use it over time. For example, mobile couldn’t happen without cloud. Treasury right now is in the process of replacing legacy systems with cloud-based technology. There is a paradigm shift in treasury technology every 15 years, so I would say this is the beginning phase of that shift to the cloud for treasury.

AR: The cloud revolution has not ended but it has changed dramatically. With the advent and innovation made in the private cloud space such as Amazon Web Services and Azure, companies that have been steadfastly server-based in their infrastructures are now moving their environments and operations to the cloud.

PS: Cloud was never a revolution for me, it was just another way of doing things. Cloud will become more and more important but I still believe that companies will not complete all critical processes in cloud solutions. Blockchain is in the spotlight now, as well as big data.

Is blockchain still a mystery to treasury?

PP: I can see the value in applications such commodity trading or even currency exposure netting – where people are sharing a chain of transactions, like moving physical commodities – but the jury is still out on whether it is the right technology to support these types of applications.

Although innovation with blockchain is advancing, I believe it is some ways off in treasury.

AR: Yes, it is a mystery but it is inevitably coming. When it will arrive is yet to be seen as there is uncertainty is around the regulations. There is also still too much ambiguity on how corporate treasurers will be able to monetise it.

PS: Blockchain is not a mystery, but at the moment treasurers are not given direct access to it. As the treasury department is strongly related to banks, it may take three to five years for blockchain to become a part of daily business.

What are your predictions for the future?

PP: Software is becoming simpler and easier to use. It is increasingly taking care of the detailed work while users spend their time gaining insight and taking action. This is especially the case in treasury as companies become players on the global stage, participating in M&A, responding to developments that continuously effect the markets.

Treasuries are turning to the technology that will progress as they progress, helping them better manage transactions, measure risk and respond to volatile and dynamic markets and new regulations. In both our consumer and our business lives, the proliferation of data from the Internet of Things will continue to drive technology innovation. We will need new ways to make sense of that data to add value to our lives. Technologies that add true value are always the winners.

AR: Treasury and TMS connectivity will continue to become more frictionless. What I mean by that is that TMS will or should become lighter. By lighter I don’t mean less capable, I mean that they will be more flexible, accommodating, and affordable which actually makes them even more capable. By leveraging new, cutting-edge APIs to de-clutter their resource-intensive integrations effectively, treasury teams will be able to perform at higher, more scalable levels.

PS: Because of big data and other new solutions becoming standard processes, other systems will be automated so that the treasurer has time for more important tasks and we will see a new way of working.

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