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AFP 2017: Is Treasury At Risk of Automation?

  • By Andrew Deichler
  • Published: 10/18/2017

SAN DIEGO, CALIF. – Is your treasury job at risk of someday being automated? Tuesday at the AFP 2017 Executive Institute, an expert panel debated whether practitioners’ jobs are truly in danger of being phased out—or if they are simply evolving with the times.

Moderator Jim Kaitz, president and CEO of AFP, began by noting that AFP and its membership are increasingly focusing on technologies like blockchain, artificial intelligence (AI) and application programming interfaces (APIs), which are gradually infiltrating treasury and finance. While these technologies can potentially make corporate practitioners’ lives easier, there is a growing concern that introducing more automation into the system could ultimately result in reduced headcount in a corporate function that is already becoming leaner overall.

Not the time to panic?

First off, not every treasury function is going to use every piece of new technology. For some departments, automation may not even come into play. Therefore, as Laurens Tijdhof, partner with Zanders noted, not all of these technologies will necessarily be disruptive. “It depends on your situation,” he said.

Julia Kirby, senior editor of the Harvard University Press, cited a 2013 Oxford University study that said that 47 percent of U.S. jobs are at risk of automation. However, she countered that the situation isn’t as dire as that statistic would indicate. “Jobs aren’t at risk of automation,” she said. “Tasks are at risk of automation.”

In her research, Kirby has not actually observed jobs being automated. Instead, she found that many tasks are being offloaded from busy employees’ plates. This provided those individuals with more free time to work on the more important tasks that can’t be handed over to a computer. This lines up with what AFP has been hearing from its membership; 35 percent of respondents to the 2017 AFP Strategic Role of Treasury Survey said that technology and automation have enabled them to focus on higher value-added work.

But while new technology may make treasury and finance jobs easier, it is important to note that practitioners still need to know how to use it. “Do treasury and finance organizations have the right people to best leverage the technology?” asked Kaitz. “That’s something we have to think about.”

The threat of AI delivering insight

On the other end of the spectrum from Kirby is Jean Furter, vice president and treasurer for Brocade Communications. From his perspective, technology can and will phase out corporate treasury jobs if practitioners are not willing to change with the times.

“The reason why I get big bucks from the CEO is all the insight I provide,” he said. “I know what’s going on in the market. But now with the presence of AI, I believe that eventually, software will be able to capture that information and deliver insights a lot quicker than I could.”

In an interview with AFP, he elaborated further: “Machine learning and intelligence software will be able to update these systems on sales and how the business is going, and then do very thoughtful analysis and identify things that I wouldn’t be able to see. And not only identify it better, but also faster.”

Furter actually believes that 90 percent of the work that treasury professionals do will eventually become automated, and he has conveyed this to his staff. “So we are trying to work with our team and prepare them in case this technological revolution occurs,” he said.

Furter also believes that this technological disruption could lead to a lot of consolidation in the finance function as a whole. “You could imagine intelligence systems that could do a lot of financial planning and scenario planning—looking at the impact if something goes wrong,” he said. “They could extrapolate from there into say, cash flow planning. And from there, there could be an intelligence software that incorporates ideas about debt, capital structure, etc. And so you may be able to consolidate all of that together.”

Should such consolidation happen, it could lead to a big shake up in the near future. “I believe you may not need an FP&A function and a separate treasury organization,” he said. “These could converge. But I think in the short run, I see such a strong relationship that between FP&A and treasury, that as soon as the technology allows it, I could see one VP in charge of the organization.”

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