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EIU report: The Future Is Now: How Ready Is Treasury?

The Economist Intelligence Unit, on behalf of Deutsche Bank, surveyed 300 senior corporate treasury executives between April and June 2018 to explore treasurers’ expectations regarding technological developments, their views on any disruption taking place to their companies' business models and network, and what they believe may be driving these changes from a regulatory and compliance perspective. 

From this research, EIU’s key findings were no surprise:

  • Disruption is real and the causes are manifold. More than 55% of treasuries say that their company is changing operational models as a result of sector disruption and that this is having a knock-on effect on treasury.
  • Business models are being disrupted from all sides. Treasurers see the most disruptive influences as multi-channel payments (47%), mobile-based solutions (43%) and changes in supply- chain product life cycles (41%).
  • Respondents are highly confident that they have the right skill sets in their teams to respond to the rapid pace of technological change. The vast majority (80%) of treasurers believe they have all or the majority of the skills necessary to meet the challenges posed by ongoing technological change.
  • Stay with what we know. Treasurers overwhelmingly believe that treasury management systems (TMS) and enterprise resource planning (ERP) systems will remain the core of treasury technology, with 35% and 36% respectively choosing existing TMS and ERP systems as the most useful technologies. Treasury is still hesitant to fully embrace the cloud; however, 31% of treasurers would consider moving in-house systems to it.
  • Treasury is behind the open API curve. Although treasury recognises the benefits of big data analytics, with 56% of respondents citing it as one of the most beneficial new technologies, only 13% are thinking about open APIs.
  • US tax reforms challenge corporate treasurers. The top regulatory concern for respondents is US tax reform, cited by 28% of respondents. Other regulatory concerns, each cited by 25% of respondents, were anti-money laundering (AML), know-your-customer (KYC) regulations and International Financial Reporting Standards (IFRS) 9.

Future of treasury

According to the survey results, big data analytics, AI/machine learning (ML) systems, robotic process automation (RPA), instant payment technologies, blockchain applications and open application programming interfaces (APIs) are the technologies that treasurers, and their suppliers identify as the critical components of the next-generation treasury, e.g.:

Screen Shot 2018-09-12 at 11.13.56.png

Source & Copyright©2018 - Economist Intelligence Unit 

The report examines the rise of the robots, artificial intelligence, etc., concluding that, “Treasury will have to competitively recruit these in-demand tech-savvy individuals if they are to develop new cutting-edge treasury best practices.” 

But, as always, Mirk Kirkland, group treasurer at Constellum, summed up what is really happening, “You may be able to automate everything, but the interpretation of a report still needs an expert to execute strategy. That’s where treasury’s future lies.”

CTMfile take: Interesting report, which is worth downloading, with key examples of what is happening in corporate treasury technology and processes, but Kirkland is absolutely right when he says that: “the interpretation of a report still needs an expert to execute strategy.” The toolbox may be changing dramatically, but the basic role and contribution of the corporate treasurer has not.

This item appears in the following sections:
Bank Relationship Management & KYC
Cash & Liquidity Management
Best Practices & Benchmarking in Operations
International Payments
Urgent/Instant mPayments

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