Hands-free technology: coming to a treasury department near you? (Guest Post)

des twort

Des Twort is EMEA Treasury Specialist at Bank of America Merrill Lynch

Google recently offered the world a fascinating glimpse into tomorrow’s technology with its ‘driverless cars’ project. The vision: that in ten years’ time, or even sooner, cars will drive around in active communication with one another, and will be able to scan the road ahead for obstacles and make evasive moves automatically, without driver intervention.

At the same time, Apple is rumoured to be expanding into home technology that will enable domestic appliances to interact and take actions whilst the homeowner is out. Amazon is also purportedly testing drone technology that would deliver packages to customers more quickly and without the need for an intermediary to put a parcel through one’s letterbox.

This might all seem fantastical and far removed from the treasury world in which many of us spend our working lives. Moving money around the world and ensuring that business transactions are completed efficiently is vital to how the global economy operates, and it is right that corporate banking does not go out on a limb to create novelties just for the sake of it.

Disruptive technology can quickly become common place, however. In the last three years we have seen the rise of this in cryptocurrencies like Bitcoin and the never-ending march of phone apps that many of us use in our personal lives.

Are these advances that far removed from the way treasury is evolving? There are plenty of similar conversations taking place in corporate banking today. Adapting to regulation and enterprise resource planning used to be top of the agenda for treasurers, but now it is more likely to be technology.

The common thread is data. All of the above involve smarter use of enhanced data, and feeding this through systems in an automated and ‘hands-free’ manner. The most exciting advances we are seeing in treasury today are also based on an enhanced use of data, bringing different elements together to create new data principles and information of potentially immense value.

For example, transactions can be used to help companies establish which of their trading partners are live and when credit lines have been opened. If treasury has set up a system to manage response codes, it can be highly efficient to test this by making a small nominal payment to the account and interpreting the data that comes back.

The data that we receive from advanced trading technology can also support the supply chain, which, in turn, can benefit a company’s customers and suppliers. Data from accounts receivable can be linked to a warehouse’s central stock control systems, for example. As soon as an account has been paid and funds received, the system can send a message to release stock in the next batch of items that leaves the warehouse. This greatly speeds up the supply chain and eliminates the need for intervention, also reducing the risk that is inherent when manual processes are involved.

Both of these examples illustrate a wider trend we’ve seen since the onset of the financial crisis. Treasury is no longer a matter of seemingly simple cash management, but is central to the way corporates operate, grow and indeed thrive. An effective investment in treasury technology can create value for the wider business, whether that be by expediting the supply chain or reducing risk and the cost that delays can cause.

Treasurers should not be concerned if their current systems are more CD-ROM than Google-friendly, however. Automation is a sliding scale on which companies will sit at different points. Not every organisation will have the resources and time to implement a fully automated, integrated solution, particularly those industries that operate on thin margins and have to work hard to justify extra expenditure during times when the global economy is still recovering.

For these companies, there are off-the-shelf tools that can help the input or retrieval of payment data, such as reconciliation packages and e-banking solutions. With e-banking for instance, a payment transaction can be manually created through friendly prompts and the online validation of data input, or the retrieval of a bank statement. Even relatively targeted products like these can help treasurers be less reliant on manual transaction systems and free up their time.

Other companies may have in place relatively advanced technology systems, but would benefit from generating even better quality data that can be fed further down the project and servicing chains. These corporates may wish to consider tactical tools that are more cost-effective to buy and place on their central systems than to build from scratch.

The benefits of automation won’t be new to treasurers, certainly not to anyone of an age where they remember the straight-through-processing mantra of the 1990s. Today, however, automation is about joining up treasury technology with business and process flow, driven by the enhancement and enrichment of data. Such data could be an enabler for corporates to reinvent themselves, and demonstrate how treasury teams can be true strategic partners to their businesses. Consumer technology may get all the headlines and the whacky photo stories, but hands-free business-to-business technology has a bright future and could soon be coming to a department near you.

 

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