With sufficient scale, even the most simple tasks can become a significant challenge for a growing business. This is a common struggle in multi-bank treasury management. If you’re a young Bill Gates selling home made PC’s out of your garage, it’s incredibly simple to keep track of who your customers are and how much they owe. It was probably easy enough for Gates to keep it all in his head, or scribbled in a $1 notepad from Walmart.
But when you get to the scale of Microsoft today, those simple tasks require huge teams of people and massive investments in technology to stay on top of. Knowing whether a specific customer has paid their invoice, if they’ve been paid an agreed refund or if you’ve paid a supplier, means somehow sorting through literally millions of transactions to find the one that matters.
This process has traditionally been so labor intensive and disruptive, that the term commonly used to describe it is ‘data mining.’ That’s right, finding a specific piece of financial information in a company’s records is the office equivalent of using explosives and excavators to get to the important stuff hiding below.
It’s an apt comparison, because as you know, data is now one of the most valuable assets that a company has. Those who are able to find, organize and analyze their vast amounts of data in the most efficient way have a serious competitive advantage.
Accurate and real time data allows for senior finance executives to create more informed business strategy, but it also means the ability to deal with problems or changing market conditions with the minimum costs and lost time. Those efficiencies, both small and large, can play a significant role in a company’s bottom line over the long term.
For enterprise level treasurers, dealing with multiple banks, currencies, tax jurisdictions and legal frameworks can be a major source of these inefficiencies. Even simple multi-bank treasury management across each country of operation can result in hours of manual analysis to consolidate the data.
When problems arise, this manual process means staff have to drop everything in order to sift through a mountain of data to find specific transactions which relate to the issue at hand. But while this is a big problem, it’s also the exact type which technology can simplify and solve.
The Needle and the Haystack
As the old saying goes, if a business isn’t growing, it’s dying. As growth accelerates, managing the finances of a company becomes just as important as the delivery of the product or service that it’s selling.
Managing cash is a fundamental cornerstone of sustained growth, and that involves a combination of understanding the big picture of the cash position, down to the micro level of individual transactions.
We talk a lot about the importance of enterprise liquidity management, but getting granular is equally important. While an individual transaction among millions might seem insignificant, each one of those is a client or customer, and the quicker you can access their data, the more efficient and higher quality your service can be.
In sectors like insurance or retail, all of those small individual experiences add up to a service standard that can make or break your business, given how those experiences are now shared en masse through social media and review platforms. Finding the relevant transactions and understanding the situation is the first step to solving the problem, and the quicker it’s done, the better the outcome for everyone.
But it’s not just the service to a single customer which relies on accurate and timely data, it’s also the reporting which can bundle those transactions together to spot trends or identify specific transaction types.
Say, for example, that you need to find all the transactions from an individual or organization which has been flagged by the risk team as a potential money laundering risk. Using a legacy TMS with limited search functionality, this will involve a painstaking manual process of trawling through lines and lines of data to find any matching transactions. For large companies, this might mean accessing the data from many different banks and payment providers individually.
Because it’s not just bank accounts they’d need to look at. These days there are dozens of payment platforms connected to an enterprise size business, such as Stripe, Alipay and WePay, in addition to traditional banks.
Legacy TMS makes it a challenge to identify the details of the issue, and provides limited functionality to manage the risk of it happening again in the future. With less accurate, less complete data sets to work from, and a reduced feature set for solutions such as transaction tagging and grouping, it can make managing risk more difficult.
The Modern Cloud-Native Solution
The good news is that enterprise treasurers now have access to technology which can solve these problems. Through the use of open banking APIs, platforms like Trovata can provide a consolidated, real time view of cash position, as well as deeper insights into the financials behind that position, such as transaction data.
It means that finding transactions moves from an issue which halts the treasury team in their tracks while they drop everything to go on a data hunt, to something that can be done in minutes. That’s less time trying to find the root of the problem, and more time solving it.
In a recent interview at AFP 2023, John Bolden, Director of Treasury at City Storage Systems spoke about how this technology has transformed his ability to do his job.
“When we connected Stripe, it brought in a million transactions. There’s no G Sheet or Excel spreadsheet that could gather, arrange, extract and transform that amount of transaction data.”
For treasurers who need to delve into the weeds to find and analyze data, this is technology that not only allows them to do their traditional role more efficiently, but also to bring new value to the table when it comes to broader company strategy.
The questions being asked of treasurers have moved beyond, as Bolden puts it “How much cash do we have?” to now being expected to weigh in on everything from the debt structure of the business to how the cash forecasts are likely to impact important financial ratios like the weighted average cost of capital.
Not only do these questions need to be answered, but they need to be answered fast.
“I’m all about speed. The questions come in hot and fast and need immediate answers. If I were to go back to the traditional (TMS) route, it’s like, do you want to buy a VCR? No I don’t think I would ever go back”
Check out our recent episode of FinTech Corner where our very own Founder/CEO, Brett Turner, alongside Joseph Drambarean, CPO & CTO of Trovata, interview John Bolden, the Treasury Director at City Storage Systems, to discuss how APIs are revolutionizing treasury operations and how this cutting-edge technology is creating a wave of new possibilities in finance.
It’s no wonder why 59% of executives plan to invest in tech over the next 12 months. Transformative treasury technology is essential for thriving in the modern financial landscape. As John Bolden highlighted, there are some specific product features of Trovata which help meet the need to quickly answer questions from executive leadership.
1. Transaction Search
For something so fundamental, it’s incredible how much of a challenge this aspect of a treasury team’s role can be when using a legacy TMS. With Trovata, the search capabilities offer these teams the ability to find and access their information like never before.
With a flexible yet precise query process, treasurers can pull up any list of transactions using easy to understand rules. Want to see everything that’s come in via a Wells Fargo account? Done. How about every transaction which has the word autopay in the description? Yep. If you can think of a way to segment your transaction list, you can almost certainly use Trovata’s search functionality to see it.
This doesn’t stop at retrospective transactions. You can also implement automatic tagging to new transactions as they come in, allowing you to run regular reports keeping you updated on details you need to know.
2. Improved Cash Flow Analysis
As a treasurer, you already understand the importance of cash flow. It’s the lifeblood of any organization, and understanding how money is coming in, where it’s coming from and where it needs to go out to can be the difference between (corporate) life and death.
Traditionally, cash flow analysis has involved a significant amount of time to just collect and review the data. For Eventbrite, that meant over 48 hours per month on simply gathering and organizing data before they started using Trovata.
By having this entire process automated with APIs, treasurers and their teams can skip the data entry and have all the data available on their dashboard, in real time. That frees them up to spend more time on the real value add of expert analysis and strategy.
3. Generative Finance AI
Because of the flexibility of Trovata, we’ve been able to embed the technology of GPT-4 into the platform, allowing treasurers to speak directly to it, as if asking a question of a colleague. You can ask Trovata AI any question related to your company’s financials, like, “What’s our burn rate over the last 12 months?” or “Build me an FBAR report in a format I can file that meets IRS guidelines.”
The way this technology is used means that your corporate information is kept completely private. We use the language model powering GPT-4 to convert your natural language question into a specific data query, which is then fed into the Trovata system and direct to you. None of your data ever leaves the platform. You can think of the AI component as the ‘interpreter’ between you and your data, relaying the question without ever actually seeing the answer.
As Aurelia Sirbu at Orbus puts it.
Simplify Multi-Bank Treasury Management with Trovata
Simply put, Trovata allows treasury departments to be more efficient, more accurate and more strategic, and helps them in their new role as a driving force of corporate decision making. It’s this cutting edge approach to an industry heavily influenced by legacy operators that was the reason behind Paul Bramwell joining Trovata after 34 years in the industry, including time spent as a partner at EY’s treasury advisory practice in New York City.
“Trovata is truly world class at bank connectivity. Tagging, segmenting, reporting, grouping, identifying, coupled with incredible search capabilities is spectacular. No other treasury systems offer such capabilities due to the technical debt of their underlying platforms which were built in the 90’s and early 00’s.”
Corporate treasury shouldn’t be stuck in the 90’s. Right now we’re experiencing disruption in the space, as companies look for ways to improve efficiency and make better strategic decisions. Modern cash management software like Trovata allows for real time treasury management, advanced analytics and reporting, fast and simple search functionality and now even AI integration.
CFO’s and treasurers who don’t leverage this technology are likely to find themselves left behind by those who do. Want to find out more about how Trovata can help your business? Book a demo today!