The Future of Corporate Treasury

8 Treasury and Trade Solutions Multiple pathways emerging for the real-time digital treasury of the future This is not to dismiss the need for, or the potential benefit of, investing both resources and capital into experimenting with emerging or yet-to-be proved technologies. Indeed, as we have discussed earlier in this article, those that have invested in ERP/TMS will enjoy the opportunity to be part of pilot schemes and proof-of-concept experimentation in partnership with current technology providers and banks. For many, the journey so far has been along the path to a fully operational in-house bank treasury construct that offers cash concentration. This enables centralized risk management and bank account optimization through on-behalf- of and, more recently, virtual account constructs capable of supporting inbound and outbound flows at the center. This centralization journey is reflected in Figure 3 on page 6 as the now well-travelled road to the efficient treasury, where, for example, the need for banks to intermediate financial flows between group subsidiaries has been removed entirely. We now see the onset of two new target states for operational treasury, which will ultimately provide fully automated real-time digital treasury. First, the onset of artificial intelligence (AI), namely, machine-learning techniques coupled with robotic process automation and second, the ability to access large data sets, have offered up a “smart” treasury, where manual processing or reconciliations will not exist, with intervention only required on an exception basis. This will include the arrival of more timely and accurate forecasting that automatically combines risk policy to determine suggested next actions through well-nurtured and well-trained AI techniques. The real-time digital and secure “integrated” operational treasury will come about in a new world when real- time payments — a new normal not only for C2B but also, with limits raised, for B2B flows — and open banking, APIs and blockchain (to help remediate cyber- attack threats) come together. This fully integrated world is where the concept of end-of-day cash management is gone, cutoff times do not exist, real-time value is received, payments are made just in time, and surplus cash is invested automatically for optimum risk/return based on unstructured search engines consuming trusted data feeds. For many, the journey so far has been along the path to a fully operational in-house bank treasury construct that offers cash concentration. This enables centralized risk management and bank account optimization through on-behalf-of and, more recently, virtual account constructs capable of supporting inbound and outbound flows at the center.