How Important Is Technology to a Successful Treasury Transformation?

  • By AFP Staff
  • Published: 3/25/2024
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Technology is often seen as the solution to treasury’s core problems, whether that is calculating positions and exposures or making payments and executing decisions.

It is also the case that the effective use of technology is central to the success of most treasury transformations. As an example, the automation of one or more manual processes is often the first deliberate step in a company’s transformation journey and is one that is wholly reliant on the availability of appropriate technology.

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Looking for insights on treasury transformation in the Asia-Pacific? Read the whitepaper “Treasury Transformation: Insights from Asia-Pacific (APAC),” underwritten by Standard Chartered.

Another common project is the adoption of a dedicated treasury management platform, such as a TMS or the use of an ERP treasury management module, to replace the use of spreadsheets. In most cases, upgraded treasury technology can help to improve operational efficiency, offer scalability that supports a growing business, and exercise greater control and visibility over departmental activity.

Many transformation projects, such as the implementation of an in-house bank, are heavily reliant on the use of appropriate technology to facilitate the accounting and workflow management and automation that underpins effective operations. The treasury technology landscape is evolving very quickly, with new concepts and FinTech companies emerging all the time.

The 2023 AFP Treasury Benchmarking Survey on Treasury Transformation, conducted in the Asia-Pacific (APAC) and Middle East and Africa (MEA) regions, found that those companies that have adopted some emerging technology (primarily robotic process automation and payments innovations, such as the adoption of QR codes) view it positively. There is also keen anticipation for the potential of the adoption of artificial intelligence.

For any transformation project, two points stand out.

First, the selection of suitable technology is vital, especially because it can still be easy to be distracted by the latest new idea when selecting a new solution. It can be difficult to make the best fit between a new solution and existing technology in terms of both functionality and support. Any solution has to be flexible, scalable and durable.

Second, even with the most suitable technology, the transformation may be difficult, with some potential hurdles in the way.

  • Many organizations across the APAC and MEA regions have complex intercompany relationships that may need to be unwound before the transformation can take shape.
  • Simply adopting a new technology solution may not resolve inefficiencies if any underlying problems are not addressed first. Many companies still rely on manual processes which become inefficient over time, so mapping out more streamlined workflows becomes key to a successful transformation.
  • Regulation varies significantly between jurisdictions, even within the same region. This makes adopting a single centralized, standardized and automated process across multiple countries potentially very difficult, so expert advice should always be sought.

Technology can — and does — dramatically improve operational efficiency as part of a treasury transformation project, as long as the potential pitfalls are recognized and addressed first.

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