Treasury teams and systems are facing major challenges as technology advances rapidly.
Bank solutions in combination with Accounting, ERP and TMS systems, make up the range of tools used by treasuries. All of these tools, however, are experiencing major technological upheaval, presenting unique challenges for treasurers.
Treasurers need to ask themselves whether their tools and their teams are ready to keep up with the changing landscape. Automation and new integrations into systems will fundamentally reshape the work of corporate finance departments. This means that skilled employees undertaking tasks like manually reconciling paper bank statements or depositing cheques will be a thing of the past.
Other developments currently taking place in some banks include systems that enable transactions to be reconciled into ledgers in near real-time. Those same banks can also leverage contextual data from the client’s environment to increase the number of items that match automatically, thereby freeing up team members to work on more valuable tasks.
New technology is becoming available that is helping to intercept even the most sophisticated of fraudsters. As an example, real time systems for flagging of anomalies in payments can help treasurers get ahead of fraud.
Treasury departments can now use these new innovations to help broaden their access to credit. Banks have started to offer additional credit automatically as the financial position of a treasury department improves, or when an asset such as inventory increases. This eliminates the need to fax loan applications to the bank.
Overall, I sense that banks are starting to become more efficient operating partners. Deep integrations to treasury tools will let banks examine at a glance, purchases and sales orders and determine whether a finance dept. Is carrying to much euro exposure, or not enough Australian dollars, as an example. This kind of 2 way data exchange and the establishment of the bank as a trusted advisor and custodian corporate customer data opens up a whole new world of efficiency.
What is Blocking the Way to Further Advancement?
Benefiting from these TMS and ERP advancements may be more difficult for many finance departments than they realize. Limitations in software and IT capabilities can create obstacles. Because of the breadth of business functions they are used for, accounting and ERP systems can’t be replaced easily. These kind of systems must make room for evolving business requirements over the course of the next several years, making it difficult for treasurers to quickly adapt. In addition to being confined to their existing tools and systems, treasury and finance professionals must also navigate the intricacies of multiple banking relationships.
When assessing if their existing systems are a good fit for their needs, and how they can leverage new technologies such as open banking and APIs, treasurers should carry out an exhaustive review of their operations. The key elements of the review include:
From becoming more efficient to reducing fraud, automation and emerging technologies have the potential to be extremely beneficial to corporate finance departments. But in order to make the most of these innovations, treasurers need to find a way to navigate around rigid, inflexible systems and complex integrations.
That’s where future-proofing finance tools can make all the difference. A number of strategies – including searching for systems that can easily integrate with third parties and communicating specific needs to banks – can help prepare finance tools for a new era of innovation.