One of the core functions for a treasury is money modeling. Invariably, every entity must have a tight handle on their liquidity positions and funds. In a rapidly-evolving marketplace, this isn’t without it’s fair share of challenges. As a result, many treasuries need to step it up as modern business has become increasingly complex and volatile. Accurate management, reporting, and forecasting is critical. There isn’t any question that high-value activities such as cash management can easily become problematic. Further, increasing the quality, consistency, and accuracy of data is crucial. In addition, real-time access to treasury analytics and cash data can help to improve a compliant and secure treasury infrastructure. The lifeblood of any organization is cash flow, but there is also a dire need to have the right tools in place to explain variances and to predict shifts in the market.
The evolution of treasury processes and management systems
Treasury management is a field designed to understand and report on cash flow data. Initially, treasury processes involved a lot of manual paper recordings, manual workflows, and processes. As technologies have evolved so have some of the processes in the treasury. Unfortunately, Strategic Treasurer has found that some institutions still rely on Excel for handling forecasting and other treasury-related tasks. While digital transformation deployments have taken many industries by storm, some treasury departments are still way behind the competition.
The fourth industrial revolution and treasury
According to IDC Financial Insights, banking CIO’s are making digital transformation their first priority and plan to dedicate 40% of their IT spend to the effort. Now, let’s discuss Industry 4.0.When you think of the Industrial Revolution, you probably think of manufacturing and not treasury. It’s true, the First Industrial Revolution occurred when the world mechanized production. The second industrial revolution is associated with using electricity for mass production, and the third encompasses automation and digitization. However, we are now in Industry 4.0. What is the Fourth Industrial Revolution? Well, Industry 4.0 is about blurring the lines between the physical and digital worlds. It is also about a world of connected devices via IoT and AI. Moreover, it melds the skills of both humans and machines. Guess what? Treasury functions will be impacted by Industry 4.0, as well. In terms of digital transformation, next-gen treasury functions will be highly integrated with intelligent automation. Better data will drive decision-making so that the treasury can eliminate error-prone processes and the “rear view mirror” paradigm.Here are some of the technologies expected to transform treasuries:
