How Technology is reshaping Corporate Treasury Management

In today’s interconnected world, the advent of new age technologies constantly evolves the frontiers within which businesses function- and treasury management is no exception.

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Treasury is the backbone to the success of any business by efficiently managing liquidity and funding requirements, crucial for sustenance in the long run. However, in this juncture alongside performing the traditional role of the treasurer, there is also a rising need to improve accountability, visibility, and transparency of operations.

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Treasurers have now turned to technology as a solution to resolve these demands since fulfilling such tall expectations with current systems is near to impossible. Existing decentralized treasury management systems would require a complete overhaul to rise to the occasion. Several treasurers in Asia have quoted that their top focus for 2019 after liquidity management and funding would be Digitization of treasury functions which is also seen as a way to move treasury operations from just controlling costs to becoming profit centers.

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Innovation in Treasury Management

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While earlier innovations in treasury management meant collaborating with banks to roll out sophisticated financial products, the focus is now shifting to digital solutions that make treasury management processes quicker, transparent and efficient.

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This paradigm shift involves viewing technology as a digital solution to bolster treasury management or Treasury Technology as it is commonly referred to. The three ways in which technology enhances treasury functions are

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1. Automation

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With the pace of business accelerating, the role of the treasurer today, calls for quick decision making that is validated by a thorough analysis of data. For this, treasurers need a more analytical approach which would only be possible if they are not involved in mundane or tedious tasks.

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Adopting advanced technologies like Robotic Process Automation (RPA) and Machine Learning for automating processes that can be simplified, needing no human intervention, ensure that these tasks are taken care of efficiently and accurately.

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Automation also ensures standardization of processes, seamless compliance with statutory obligations and prevention of fraudulent activities.

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2. Digitization of Payments

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A significant bandwidth of the treasures at all levels is consumed in procure-to-pay processes from invoice generation to settlement. A process that requires large amounts of paperwork, coordination with multiple bankers simultaneously, and multiple back-and-forth reconciliations that are time-consuming and redundant.

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While banks are still working with the treasurers to simplify processes one step at a time, several new age fintech solutions have devised agile and comprehensive solutions to resolve it. Technologies like dynamic discounting, digitization of procure-to-pay processes can help to prioritize treasury resources in the right direction without requiring any change in current IT infrastructure and systems

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3. Data Analytics

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As the world becomes digital, every data point could offer valuable insights for decision making. However, data in itself is worthless unless it is available in a single repository, analyzed and presented in the right form of dashboards that empower decision making.

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While earlier decision-making processes required aggregation of data points from various sources and involved reconciliations and periodic statements, today’s expectations require real-time data and quick decision making.

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Treasurers today could take advantage of the latest technologies such as APIs to allow free-flow of communications and rely on cloud-based technologies to centralize and gather all relevant data points to create one single repository of current data. This information can then be further analyzed and compiled into useful dashboards assisting in decision making. Data analytics could be the next powerful tool that treasurers could use to predict future rates of interest, forex, etc. and take preemptive actions to contain exposure to such risks.

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Role of Future Treasurers

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Treasurers need to be agile to quickly adapt to the changing times rather than restrict themselves to legacy systems. The need of the hour is to do a thorough study on the internal processes to identify aspects that need to be retained and those that could be improved using the technology solutions available.

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The role of treasurers will transform into decision makers who steer businesses in the right direction by being more informed with real-time information. With technology empowering businesses, flexible and robust treasury management systems will soon be the driving force within organizations.

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Reach out to us to know more about how Cashinvoice could play a significant role in transforming your Treasury operations into profit centers.