The Treasurer’s Cheat Sheet to Digital Transformation

Written by Sergio Garcia
February 2, 2024

In the fast-evolving corporate landscape, treasury digital transformation has become a priority for many organizations. This is in large part due to the fact that treasurers are being called upon to take on more strategic roles in financial management.

In fact, according to a recent Deloitte survey, 54% of businesses are prioritizing liquidity risk management. Treasurers are also tasked with working capital improvement, enhanced governance, and being strategic partners to CFOs. 

The impact of external factors like interest rate fluctuations and the global pandemic has amplified the challenges faced by treasurers, highlighting the urgent need for digital transformation.

However, organizations encounter significant challenges in their treasury operations, including difficulties in: 

  • Gaining visibility (64%)
  • Digital capabilities (59%)
  • Inadequate infrastructure (53%)

The lack of digital capabilities and technological infrastructure leads to limited visibility into liquidity, emphasizing the need for organizations to accelerate treasury digital transformation

The Problem with Traditional Treasury Management

Spreadsheet-Based Operations are Slow and Unreliable

Traditional treasury management heavily relies on spreadsheets, resulting in time-consuming manual processes, potential human errors, limited transparency, and lack of sophistication in daily cash analysis.

Legacy TMS are Outdated

Legacy Treasury Management Systems, though feature-dense, are outdated and time-consuming to set up, with constraints on data consolidation and limited API connection capabilities.

Lack of Modern Technology Makes Data Aggregation Time Consuming

Even with legacy TMS platforms, reliance on spreadsheets for bank reconciliation makes data aggregation time-consuming, with teams spending up to 10 hours per week.

Slow Processes Result in Inaccurate Data

Traditional processes lead to outdated data by the time it reaches senior executives, especially in times of volatility, resulting in inaccurate decision-making.

Check out our recent episode of Fintech Corner as our very own Joseph Drambarean and Brett Turner 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 empowering practitioners to overcome the challenges of traditional processes.

Modern Digital Solutions Treasurers Need

As businesses focus on transforming finance functions, Treasury Management Systems (TMS) adoption is rising, accelerated by the pandemic. Approximately 42% of treasurers prefer cloud systems, with cloud-native solutions emerging as the preferred choice due to their tailored design for cloud environments. However, it’s important to know the difference between cloud-based and cloud-native TMS. 

Cloud-Native vs. Cloud-Based TMS

TMS vendors that predate 2015 (when you could make software native to the cloud) are simply repackaging their old-school solutions as “cloud-based,” even though they don’t offer true cloud-native functionality. This often leaves unsuspecting finance professionals with sub-par tools that fail to deliver on their promised benefits, while charging exorbitant prices compared to what a cloud-native provider would charge.

Open Banking APIs

Open banking enables banks to transfer data to clients directly and securely. So instead of normalizing bank data manually, your organization can gain near real-time cash balance, transactions, and payment tracking in one platform. 

simplify insurance treasury management

This improves security and performance, while also unlocking automation opportunities and an entirely new, intuitive digital experience for users and developers. Treasury departments are rapidly implementing API technology to transform their operations. A staggering 86% of treasury teams have already implemented API or are considering it in the near future.

Machine Learning and Artificial Intelligence

Banking APIs streamline data consolidation, establishing a single source of truth. However, treasurers need to efficiently analyze that data to obtain strategic insight.

This is where machine learning (ML) algorithms and artificial intelligence (AI) holds real world value for treasurers. The significance of AI in financial planning is underscored by a KPMG survey, revealing that 83% of finance professionals incorporate AI in various financial planning aspects, including predictive models, scenario planning, and budget insights.

Through the categorization and tagging of data, ML algorithms swiftly analyze your organization’s bank data, compiling the most pertinent transactions into a cohesive dataset within seconds. Furthermore, the collaboration of machine learning and AI facilitates the creation of a forecast baseline and other scenarios by identifying trends over time.

Now that you know what technologies to look for in order to transform your operations, you might be wondering what a platform with all of these solutions looks like? And, how can you go about implementing such a system without exhausting your resources? 

Trovata: An Easy-to-Implement Solution

As a cloud-native platform, Trovata offers real-time visibility into cash positions through open banking APIs, automating data consolidation and providing a suite of tools for forecasting and scenario planning. Trovata AI, a generative AI assistant, allows even non-experts to create reports and models, bridging the gap between teams and financials.

Real-Time Data Feeds through APIs

Trovata’s open banking APIs provide your team with real-time data feeds, eliminating the need for multiple bank logins and manual data aggregation. This provides your entire department with a single source of truth.

treasury digital transformation

Machine Learning in Forecasting and Scenario Planning

Trovata leverages AI and machine learning to automate reporting and forecasting! Automation of scenario creation and impact analysis speeds up decision-making processes.

treasury digital transformation

Generative AI

Trovata AI, is a generative 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.

treasury digital transformation

These are just some of the ways Trovata leverages the power of APIs and AI to streamline treasury functions. With our complete suite of solutions encompassing payments, entity management, tagging, and more, practitioners are fully equipped to evolve into strategic pillars that fortify financial resilience through enhanced visibility and agility.

How Krispy Kreme Accelerated Treasury Digital Transformation with Trovata

In the past five years, Krispy Kreme has experienced rapid revenue growth and multiple international expansion events. Naturally, this led to its corporate treasury team requiring advanced treasury technology capabilities that could facilitate its increasingly complex workflows and reporting needs.

Thanks to its partnership with Trovata, Krispy Kreme is empowered to:

  • Manage increased treasury management complexity, driving timely and actionable cash insights without the need to hire more staff.
  • Replace its outgrown cash management solution with a modern cash management platform for less than what it would cost to implement a traditional Treasury Management System (TMS).
  • Enable cutting-edge innovation and enhance its treasury technology as Trovata continues to invest in its platform and unleash greater capabilities.
treasury digital transformation

Embracing cloud-native treasury tech, leveraging open banking APIs, and incorporating AI and machine learning into operations can evolve treasury functions into a strategic pillar of business growth. Treasurers can not only address current challenges but also position themselves as strategic partners in the CFO’s agenda. 

With Trovata you can gain unmatched visibility of cash daily across all accounts, empowering you to better understand liquidity to make the most out of excess cash. Aggregate, search, tag, analyze, forecast, and report; gain everything you need to make smarter, faster decisions. Elevate your enterprise treasury operations with Trovata’s superior tools.

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