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For Treasurers, Fintech Means Practical Solutions

  • By Andrew Deichler
  • Published: 2/28/2017

RESTON, VA. -- AFP continued its effort to explore fintech solutions to assist corporate treasury and finance professionals during a Monday meeting with the AFP 2017 Annual Conference Planning Task Force. The task force is charged with sorting through hundreds of conference session proposals and selecting the best of the bunch, so AFP’s subject matter experts gauged the task force’s thoughts on the budding fintech revolution.

“How are you going to look at new technologies?” Craig Martin, AFP’s director of executive programs and treasury practice lead, asked the group. He noted that the subject was also a key topic of conversation during the latest meeting of AFP’s Treasury Advisory Group. “As one person at TAG said, there are all of these shiny new toys, but are they really applicable to [treasury]?”

Practical solutions

A treasurer for a major hotel chain responded that although treasury and finance professionals have a wide range of needs, his approach is cautious. “From a corporate practitioner standpoint, I am nowhere near being interested in being on the cutting edge of fintech,” he said. “I will wait until it’s ubiquitous before venturing down that path. We make a lot of payments, but payments isn’t our business.”

The treasurer added that at the end of the day, the technology he invests in is going to be practical; it has to solve specific needs and it’s not likely to be flashy and cool. “Fintech, for me, just means making stuff work that frankly should have been working five to 10 years ago. It’s getting a treasury management system that talks to the banks, or getting SWIFT connectivity to work. I don’t know why we’re still suffering through that, and I imagine others are too. But day-to-day, that’s what the fintech challenge is for us.”

Another hospitality treasurer agreed, explaining that the treasury workstation his company invested in years ago is now outdated and he is looking at cloud-based solutions. “So fintech for us is whether we can move to the cloud,” he said. “That’s what we’re in the middle of right now; looking for applications that will make things easier and more efficient. So it’s kind of the basics of treasury.”

A treasurer for a telecom who has actually been involved in the bitcoin and blockchain space explained that he sees things much the same way. He stressed that treasury and finance needs to have a reason for being proactive on fintech. “You really have to figure out how you can apply it to delivering lower costs, supporting market expansion, improving operational efficiencies or entering new markets,” he said. “That, to me, is what fintech is about and how it can apply to the business.”

The treasurer added that his organization has a “ton” of manual processes that could potentially be vastly improved through various fintech solutions. “Like driving AI into monitoring the activities of your operations folks, to build intelligence and replicate what they’re doing—it’s very hard for a human to do that but it’s very easy for a machine to do that,” he said.

In treasury, everyone is being asked to do less with more, noted a treasury manager for a fast food chain. “So if we can remove manual and repetitive tasks and put them into a technology-based solution—that should be the goal of fintech,” he said. “It doesn’t have to be high-tech; it just needs to be a technical way to take the learning that we have in our heads and put it into a repeatable process within our IT system so we can use our minds to do other things that are a better use of our time.” 

Getting educated

Given that many of these solutions like blockchain have the potential to improve key treasury and finance processes, practitioners are going to eventually have to pay attention or they’ll run the risk of falling behind. “If blockchain is going to be the technology of the future, we’d better start getting educated on how it works—whether it’s treasury or finance or FP&A,” added a finance executive for a major healthcare provider.

Jeff Glenzer, CTP, vice president and chief operating officer for AFP, noted that AFP’s goal in all of this is to educate its members about fintech, and determine how it can apply to them. As such, AFP is planning to highlight fintech sessions at the annual conference.

“AFP isn’t interested in covering fintech as it relates to something that doesn’t affect what our members do,” Glenzer said. “However, there are a lot of proofs-of-concept out there that directly affect treasury processes—whether it’s derivatives settlement or international payments settlement or other examples that aren’t strictly related to money movement. So there’s certainly technology that can help you do your jobs better, and we as an association need to make sure we’re making you prepared for the things that are going to hit your desk.”

Added Glenzer: “If someone comes to you with a solution based on distributed ledger technology, we don’t necessarily need to educate you on that particular application. But we view it as our role to make sure you know enough about the basics of distributed ledger technology to ask the right questions.”

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