“While treasurers do not need to be experts on all technological concepts and rarely need extremely deep technical knowledge of innovations, a certain level of understanding is becoming increasingly vital. Having a solid base of knowledge regarding relevant technologies helps treasury staff understand 1) how current and emerging technologies may apply to treasury, 2) what technology they may need, 3) how to better use the technology they have, and 4) where the technology may be heading in the future, which supports wise long-term planning”, states Strategic Treasurer’s 2024 Treasury Technology Analyst Report.*

Although there are encouraging indicators such as stable global growth and declining inflation, economic uncertainty and geopolitical tensions persist. In response, corporate treasurers are poised to expedite their digital transformation by deploying pertinent technologies to enhance cash flow visibility and optimise liquidity forecasting for increased operational efficiency, improved risk management, and strengthened cybersecurity. 

                                                                                                                                                                                                                                                                                                       

But what types of technology are available to support the treasury department, and how can they be leveraged? What advancements lie ahead? These insights and more are collated in the 2024 Treasury Technology Analyst Report, which serves as a definitive resource for corporate treasury professionals seeking to understand how treasury technology aligns with their needs.

Here are the key emerging technologies that are either already in use within treasury or expected to be implemented in the next two to five years, along with their specific impacts on treasury management systems (TMSs):

Emerging technologies of importance and their expanding use in TMSs

Emerging technologies, including application programming interfaces (APIs), artificial intelligence (AI) and machine learning (ML) are set to profoundly influence the treasury function over the next two to five years.

APIs are a set of defined rules and protocols that enable various software applications to communicate and share information or data with one another.

Nearly half (45%) of the respondents in the Treasury Technology Analyst Report are currently utilising APIs in their treasury operations, with an additional 29% of participants planning to incorporate APIs within the next two years. Moreover, the percentage of respondents not interested in using APIs has decreased from 49% in 2019 to just 10% in 2024.

Source: Strategic Treasurer’s 2024 Treasury Technology Analyst Report

According to the Treasury Technology Analyst Report, this increasing adoption of APIs in treasury and finance is due to the fact that "APIs have been used to support both open banking and open treasury, referring to the approaches that seek to allow more streamlined integration with banking systems (open banking) and between internal treasury and other finance systems (open treasury)."

In this context, APIs are now at the forefront of treasury management systems connectivity, enabling systems not only to pull or retrieve data from external financial institutions but also to improve integration between internal systems and tools. This is opening new avenues “For vendors to push the boundaries of functionality and leverage the full ecosystem to greater advantage”, the analyst report explains.

Additionally, APIs facilitate the instant and secure transmission of banking transaction and account data, giving corporate treasurers complete visibility into their global cash positions, which enhances their ability to forecast and manage cash flows more accurately and efficiently.

Of all the emerging technologies, AI and ML have consistently been in the spotlight for the past two years. However, as per the analyst report, “AI’s current use in treasury is primarily via platforms such as the TMS.”

The report also provides insights into the future usage of AI in treasury, highlighting a slight increase in AI adoption among treasury professionals in 2024 (17%), compared to just 14% of respondents who used AI in treasury in 2023. This adoption is anticipated to more than double to 39% within the next two years and increase by an additional 25% over the next five years.

The Treasury Technology Analyst Report outlined two key use cases where AI and ML have influenced TMSs: cash forecasting and fraud detection and prevention.

Source: Strategic Treasurer’s 2024 Treasury Technology Analyst Report

Given that corporate treasurers are responsible for the ownership and control of cash, cash forecasting is the area where treasury executives spend the most time. However, forecasting remains a persistent challenge for treasury teams and frequently ranks high on lists of tasks they can’t devote adequate time to. Numerous treasury practitioners also report high levels of inaccuracy in their forecasts. To address this issue, some vendors have begun incorporating ML into their TMS solutions to bolster forecasting capabilities. Treasury executives are also keen on integrating AI-based forecasting systems.

“Assuming adequate historical data is available, ML has proven to be highly effective at providing rapid and increasingly accurate cashflow forecasts. While not yet widely available across all TMS offerings, this will likely become more common. Based on recent survey data, treasury professionals are eager to adopt AI-based forecasting tools”, the Strategic Treasurer report indicated.

Respondents in this year's survey report have also shown a strong interest in employing AI for detecting anomalies and preventing fraud.

“AI excels at identifying patterns and, by extension, items that break patterns. Criminal activity and fraudulent payments tend to break the normal patterns of the business in some way: an unusually large transaction initiated outside of normal working hours, a massive number of files being accessed in rapid succession, etc. AI-based anomaly detection built into a TMS can flag and, in some systems, block payments or activity that are suspicious until an analyst reviews them”, the analyst report suggested.

As AI and ML drive advancements in fraud detection, and as bad actors also harness these technologies to carry out payments fraud, corporate treasury must think creatively about other ways these technologies can support their operations while remaining cautious of potential downsides.

To sum up, treasurers must stay attuned to the evolving landscape of treasury technology in the digital age to tap into emerging technologies for business growth and improved decision-making.

Given the swift pace of technological change, it is expected that technology will likely dominate corporate treasurers time and attention in the near future. In addition, the last year has witnessed substantial growth in both innovation and expenditure on treasury technology, and 2025 is anticipated to maintain this momentum.

To empower treasurers to stay updated and find ways to make treasury technology serve their interests, we recommend that treasury professionals download, review, and benefit from Strategic Treasurer’s 2024 Treasury Technology Analyst Report.

 

⃰ Disclosure: Strategic Treasurer owns CTMfile.