Cloud-Native Solutions for Financial Treasury Management

Written by Sergio Garcia
February 9, 2024

Faced with the challenges of globalization, increasingly complex regulations, and rapidly shifting market dynamics, companies are finding traditional treasury methods insufficient. That’s why it’s no surprise that a recent survey from CFO Magazine found that 44% of CFOs (the largest number) chose data visualization and business intelligence as their top priority for tech investment in the year ahead.

As finance leaders hit the market seeking tech solutions that can help to strengthen business intelligence, it’s important to note that many treasury tech providers tout themselves as cloud-based technology. But, what does that really mean? Let’s take a look at why cloud technology matters, and what to look for when assessing providers.

The Rise of Cloud Treasury Management (CTM)

The rise of Cloud Treasury Management (CTM) marks a significant shift in how companies handle their financial operations. CTM refers to the use of cloud solutions to manage an organization’s liquidity, assets, and financial risks. Legacy TMS software, originally built 20 years ago, have updated their technology in recent years to cloud-based tech.

However, it’s important to note there is a significant difference between cloud-based and cloud-native treasury technology.

The Difference Between Cloud-Based and Cloud-Native Treasury Tech

TMS vendors established before 2015, prior to the advent of cloud-native software, frequently rebrand their traditional solutions as “cloud-based,” despite lacking authentic native-cloud capabilities. This can leave finance professionals with substandard tools that fail to deliver expected advantages, all while charging premium prices compared to truly cloud-native providers. So what are the differences between the two?

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If you’re on the market seeking modern treasury tech you’re likely looking for a cost-effective, flexible solution that is easy to implement, scale, and can adapt to your organization’s changing needs. Legacy TMS providers tout themselves as “cloud-based” while merely hosting their monolithic systems on a private cloud infrastructure. These legacy systems can be mistakenly perceived as true cloud solutions, especially to non-tech-savvy finance professionals who understandably may not be able to discern the distinction.

Adopting truly native-cloud software offers significant advantages over traditional alternatives in terms of cost savings, scalability, flexibility, and innovation capabilities. By partnering with a technology-first company that delivers true cutting-edge solutions, you can expect better overall value for your investment.

Check out this episode of Fintech Corner as Trovata CEO and founder, Brett Turner, chats with Trovata CPO, Joseph Drambarean, about the tough questions finance professionals should ask when assessing a cloud-based tech provider.

The unique attributes of cloud-native treasury tech provides treasury teams with the attributes needed to meet the growing importance business leaders are putting on the need for more agile, scalable, and efficient treasury functions in today’s fast-paced financial world. Key benefits of cloud-native treasury software include:

Unmatched Flexibility

Cloud-native technology offers unparalleled flexibility and adaptability. Purpose-built for Amazon Web Services (AWS) from the ground up, it automatically integrates new cloud capabilities introduced by AWS, ensuring you always have access to the latest advancements.

Furthermore, cloud-native’s modern microservices architecture enables you to customize your system and easily swap out components without disrupting the entire system. This foster greater flexibility, enabling continuous refinement and evolution of your treasury operations in tandem with technological advancements.

Real-Time Visibility

Cloud-native tech offers unparalleled access to real-time financial data across various subsidiaries and bank accounts. This instant access to liquidity and cash flow information enables treasurers to make informed, timely decisions, enhancing the overall agility and responsiveness of the treasury department.

Streamlined Workflows

By leveraging the power of cloud-native computing, you can seamlessly simplify and automate treasury operations. This automation extends to tasks like forecasting, risk management, and cash management, allowing for more efficient and error-free processes. The streamlined workflows result in operational efficiency, freeing up time for treasury teams to focus on strategic decision-making rather than mundane tasks.

Improved Decision-Making

With built-in analytics and forecasting tools, cloud-native treasury software provides deep insights into your liquidity empowering you to quickly identify excess cash and frees you up to put cash to work for your organization. This capability, combined with real-time data, empowers treasurers and CFOs to optimize their liquidity management and make strategic decisions about working capital and investment opportunities.

The adoption of cloud-native treasury software reflects a strategic shift towards more dynamic, data-driven treasury functions, aligning with the needs of modern businesses in managing their financial health and navigating the complexities of global financial services.

Key Challenges in Treasury Management Amidst an Uncertain Economy

In treasury management, treasurers confront several challenges that are critical to the financial health and operational efficiency of their organizations. These challenges often stem from the complexities of managing liquidity, risks, and cash flow in an increasingly volatile global market.

Liquidity Management

Managing liquidity effectively involves ensuring that the organization has sufficient access to cash to meet its obligations while optimizing the use of surplus funds. Treasurers often struggle to maintain the right balance, particularly in fluctuating market conditions.

Risk Management

With financial markets becoming increasingly interconnected, treasurers must navigate a range of risks, economic uncertainty, inflation, elevated interest rates, and credit risks. Identifying, measuring, and mitigating these risks is crucial to safeguard the organization’s assets and profitability.

Cash Flow Optimization

Ensuring efficient cash flow is key. Treasurers face the challenge of accurately forecasting cash flow needs, managing receivables and payables, and ensuring efficient capital allocation. This requires a deep understanding of the company’s financial dynamics and the ability to predict and respond to changing conditions. Achieving optimized cash flow starts with visibility and requires automation to streamline data analysis.

Limitations of Traditional Treasury Management Systems

Traditional treasury management systems often fall short in addressing these challenges due to several inherent limitations:

Limited Scalability and Flexibility

These systems are often not flexible enough to adapt to customized, out-of-the box workflows. Additionally, a steep learning curve means it will take a good amount of time to see the value from it. Furthermore, core TMS functionalities are not equipped with the scalable computing resources needed to analyze big data sets and provide visibility into a company’s global cash transactions.

Cumbersome and Time-Consuming Processes

Often reliant on manual processes, traditional systems can be time-consuming, error-prone, and inefficient, diverting valuable resources away from strategic analysis and decision-making.

In contrast, cloud-native treasury management solutions offer real-time visibility, greater scalability, seamless integration, and automated workflows. These features enable treasurers to overcome the limitations of traditional systems, providing more accurate and timely information for decision-making, better risk management, and improved operational efficiency.

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Transforming Treasury with Cloud-Native Treasury Technology

The integration of Artificial Intelligence (AI) and automation in treasury functions are effective tools to help you streamline your treasure management and enhance accurate tracking. Benefits include:

Efficiency in Routine Tasks

Automation significantly reduces the time and effort spent on manual tasks like data entry, reconciliation, and transaction processing. This shift not only speeds up operations but also minimizes human errors, leading to more reliable financial data.

Enhanced Operational Efficiency

By automating routine tasks, treasury staff can focus on more strategic aspects of their roles, such as analyzing financial trends and planning.

AI-Powered Insights

AI algorithms can analyze large volumes of financial data to uncover patterns and insights that might be missed by human analysis. This leads to more informed decision-making.

Predictive Analytics and Real-Time Decision Making

Predictive analytics has become a critical tool in the arsenal of modern treasury management, offering deep insights for forecasting and scenario planning.

Role and Importance of Predictive Analytics

  • Accurate Forecasting: Using historical data, predictive analytics can forecast future cash flows and financial trends, allowing treasuries to plan more effectively.
  • Scenario Planning: Predictive models help in simulating various financial scenarios, aiding treasuries in preparing for different market conditions.
  • Risk Mitigation: By foreseeing potential financial risks, treasuries can take proactive measures to mitigate them, thereby safeguarding the organization’s assets and profitability.

Real-Time Data for Proactive Decision-Making

  • Timely Insights: Real-time data enables treasuries to make quick, informed decisions in response to immediate financial situations, a critical capability in today’s fast-moving financial markets.
  • Risk Management: Immediate access to financial data allows for quicker identification and response to potential risks, from market volatility to liquidity issues.

Trovata: Enhancing Cloud Treasury Management

AI-Powered Solutions for Advanced Treasury Management

Trovata is at the forefront of revolutionizing treasury management technology by combining the latest cutting-edge technology into one platform. Trovata is true cloud-native tech that leverages open banking APIs, and built-in AI-based automation for cash reporting and forecasting, to provide finance practitioners with a disruptive solution for treasury management

Addressing Treasury Challenges with Innovation

Trovata adeptly addresses the specific challenges faced by modern treasuries. Key features include:

Real-Time Visibility: Trovata’s cloud-native API platform provides an automated big data pipeline enabling immediate access to all of your financial data in a single source of truth for your cash position, enhancing liquidity and cash flow management. This real-time insight empowers treasurers with the information needed for swift and informed decision-making and removes the process of manual bank reconciliation.

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Automated Workflows: By automating routine tasks, Trovata streamlines treasury operations, reducing the reliance on manual processes. Our platform leverages machine learning to deliver 100% accurate cash reports and forecasts.

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As your bank data updates in real-time through our APIs, so do your reports and forecasts. This ensures everyone in your organization can always see the latest data to make strategic decisions.

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Generative AI: Trovata AI is an AI assistant designed from the ground up with finance teams in mind. It allows teams to interrogate and interact with their financial data like never before, with no need to learn code or, in fact, any technical expertise at all. You can run sophisticated scenario plans, build custom models and reports, identify and analyze trends and get instant answers on anything from cash burn to currency holdings to details on recurring transactions. 

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Transform Your Treasury Management Capabilities with Trovata

In the evolving landscape of financial management, staying ahead means embracing innovation and efficiency. Trovata offers you this opportunity through its advanced, AI-powered treasury management solutions.

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Explore Trovata’s solutions today and schedule your demo to start your journey towards a more efficient, agile, and strategic treasury.

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