For years treasurers depended on legacy systems, spreadsheets and paper documentation. But the race for efficiency and greater profit margins means treasury systems are having to evolve rapidly to stay competitive.
Trade wars, Brexit, and geopolitical events as well as possible changes in financial regulation has meant markets are relatively uncertain this year.
Lately, those markets have tightened, and uncertainty around interest rates as well as the Libor switch have put pressure on treasury managers to perform. Technology has a challenge to assist firms produce the best hedging strategies while ensuring robust cash flows.
With this increasing need for efficiency treasurers are looking to get more out of their systems while limiting overall technology spend. The use of real-time data and analysis, cloud services, and artificial intelligence (AI) are fast becoming key to staying ahead of the competition.
A growing interest in the treasury sector is the use of Robotic Process Automation (RPA). While the technology is not entirely new to the market this year, it has an increasing number of potential use cases, such as data submission and purchase order issuance, which is expected to reduce errors across the large volume of information processed in treasury operations.
But not all technologies have been embraced as widely by the TMS market. The emergence of blockchain-enabled smart contracts has gained momentum in other sectors, and had been expected to help treasurers streamline the reconciliation process, but few vendors have picked up on it.
With rising amounts of data available and increased progress in the development of AI and machine learning, new operational opportunities are beginning to present themselves. Crucial to the implementation of AI is efficient data storage and structuring, and as algorithmic trading is beginning to take off in the risk management function, a move from spreadsheets and legacy software to faster systems is required.