Several new technologies could be set to become major influencers on corporate treasuries.
At the 2017 EuroFinance conference in Barcelona, BNP Paribas, PwC, SAP, and the European Association of Corporate Treasurers (EACT) released the second edition of Journeys to Treasury, a report that discusses the most important items on the treasuries agenda.
Among its contents, the report discusses several key technologies that could have a large influence on corporate treasuries in the near future. Among them:
Blockchain. Bitcoin, the distributed cryptocurrency, continues to make headlines, but while corporate treasuries may be a long way from adopting cryptocurrencies for their transactions, the technology behind bitcoin offers real potential.
“For real-time clearing, settlement, reporting, and visibility, blockchain technology is promising,” the report says.
However, the report’s authors are cautious.
“For now at least, use cases are patchy and the benefits are as yet unclear,” the authors of the report write. “The distributed ledger remains a trend to be closely monitored but is indisputably a basis for tangible innovation.”
Jeff Haslow, CPA, CGMA, a finance and accounting executive at Motley Fool, an international financial services and media company, believes blockchain could be a game-changer.
“I don’t think any corporations are going to get into cryptocurrencies for dealing with their vendors any time soon,” he said. “But the technology that powers bitcoin, blockchain, as a means of a common database between banks and organisations, and even between purchasers and vendors, has a lot of potential, but it is too early to say.”
At its core, blockchain is a distributed, immutable digital ledger, and because it is not centralised, it offers corporate treasuries a means to share specific information with their vendors, banks, and customers.
“If your customers and bank and auditors can access that same ledger, it will save a lot of time,” Haslow said. “Moving things between countries, having that single accessible database will be so much more efficient. I can see huge efficiency gains when you have multiple partners.”
Big data. Corporate treasuries generate a lot of data, but what you can do with those data is limited by what you can analyse. When data are so voluminous and complex, they are often termed “big data”, and a new wave of machine learning and robotic process automation could help corporate treasuries take advantage of all this information.
“Right now we have a lot of manual review and processing,” Haslow said. “We may be able to get some of this to be handled by AI and remove human intervention.”
He said these artificial intelligence (AI) systems could analyse data for insights that could lead to better decisions and predictions, and also remove some of the more labourious tasks from corporate treasuries.
“If you can have data audited by AI to see patterns or auto-approve bank payments and invoices, those that meet a certain threshold — you often get the same invoices for the same amounts from the same vendors — so these can be approved and paid by AI,” Haslow said.
Fintech. While not a single technology, fintech, the word coined to describe financial services technology, has so far been very customer-focused.
The use of smartphones for mobile banking and investing services is making financial services more accessible to the public, but corporate treasuries have been rather slow in adopting these technologies and systems, partly because the companies behind them are often startups, so trust and reliability are at issue.
Haslow said the key to adoption of these technologies rests with the banks. “Trust and security is an issue stopping adoption, but the banks themselves have not been as quick to embrace new technologies, especially with global finances,” he said.
“The banks are slow to adopt, and the banks are at risk because of it,” he added. “Some banks are trying to be more proactive, but the big mergers have left them with these old legacy systems, so I think three to five years is a little ambitious to see these new technologies take hold.
“We have just really embraced cloud-based solutions and that was exciting, but that was then. Certainly, blockchain has the potential to be just as exciting, but I don’t think anybody is ready to plunge in right now,” he said.
— Richard N. Williams is a freelance writer based in the UK. To comment on this article or to suggest an idea for another article, contact Sabine Vollmer, an FM magazine senior editor, at Sabine.Vollmer@aicpa-cima.com.