Treasury Management’s Digital Transformation: The Technology Behind the Movement

Written by Keegan Chamberlin
June 23, 2022

What Is Digital Transformation and What Does It Mean For Treasury Management?

As the world has become more digitized, the volume of treasury data has increased exponentially. Consequently, treasury management that heavily relies on manual processes continues to become more difficult. While many technologies, especially in the consumer space, have provided instant access to ‘always on’ services for many years, the same cannot be said within the treasury space.

For many businesses, cash flow reporting and forecasting are still done by hand in spreadsheets. This leads to treasurers and financial professionals spending hours every week scouring bank portals to aggregate their data into a single spreadsheet. If your company is in this position, the problem is you are working with outdated data, potentially filled with errors. As a result, you are forced to focus more on data management instead of analysis. 

That is what digital transformation seeks to change within treasury management: Provide your treasury with access to aggregated bank balances and transactions when you need it, wherever you need it, so that you can make informed, data-backed decisions. 

Digital transformation is not just hype; it’s becoming necessary for companies that want to scale. So it’s time to ensure that the right technology, processes, and people are in place to safeguard and optimize your cash to support future growth. 

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An API-First Approach to Treasury Management

APIs, or Application Programming Interfaces, have been utilized in big tech for two decades. Initially, developers used them for database management. As time passed, social media platforms used them to share photos across platforms. And presently, API platforms are constantly being developed.

Not all APIs are equal; like mobile phones, the technology has continued to evolve. In the past few decades, we’ve gone from colossal candy bar phones to modern smartphones that enable you to make calls, search the internet, and even manage your day-to-day tasks. APIs are similar in that regard. APIs are not just utilized to send developer resources back and forth through backend databases.

In the last six to eight years, banks have developed their own APIs allowing third parties to connect to their bank data directly. Banks and SaaS platforms can now communicate by sending balance and transaction data between each other and initiating tasks, like payments between systems. All in a secure way.

Enter open banking APIs, which enable companies to connect directly to their key accounts across the world’s largest financial institutions and regional banks. Within automated cash management platforms, these APIs consolidate and normalize balance and transaction data into one standard format within a data lake. This data lake perpetually stores bank data, amplifying companies’ ability to perform historical analysis without submitting thousands of statement requests to their banks.

These automated cash management platforms don’t just store your historical data but also utilize machine learning (ML) algorithms that find patterns within your organization’s bank data. This empowers your organization to automate cash flow reporting and forecasting and improve overall reporting accuracy. So the technology needed to transform treasury management digitally isn’t just a dream; it can be utilized today to help your organization make more informed, strategic decisions.

How To Take Advantage of APIs with A Three-Layered Technology Platform

The Foundational Layer: The Multi-Bank Data Lake™

foundational layer data lake

Open Banking APIs play a big part in establishing the foundational layer called the data lake.  These APIs consolidate and normalize all your balances and transactions into one standard format into a Multi-Bank Data Lake™. This data lake stores bank data perpetually, amplifying your ability to perform historical analysis without submitting thousands of statement requests to your bank.

The Multi-Bank Data Lake™ provides the raw data for ML algorithms, which find patterns within your organization’s bank data and distribute it throughout the Trovata Platform, empowering features like automated cash flow reporting and forecasting.

The Middle Layer: Data Transportation

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The massive benefit of banking APIs within treasury management is that they pull comprehensive, rich metadata compared to older formats like MT940 messages. So, for example, when analyzing account balances for any given date range, banking APIs provide additional information such as closing available, closing ledger, current available, opening available, opening ledger, and more. 

Trovata’s ML algorithms analyze and standardize data across all bank accounts as it comes in, eliminating the need to normalize data in a spreadsheet manually. As this data comes in, generated reports, forecasts, and tags are updated automatically, providing you complete cash flow visibility anytime, anywhere.

The Top Layer: Data Visibility and Analysis

top layer data visibility and analysis

Trovata’s modern tools come to life in the data visibility and analysis layer, presenting new opportunities within your data. The layer transforms your raw bank data into meaningful insights.

Trovata uses ML to analyze multiple data sources to ensure that the reports reflect the cash position as it’s developing instead of being a snapshot of the past. These ML algorithms empower your organization to generate cash flow reports and forecasts with deep drill-downs and enhance forecast accuracy with automated variance reporting.

All of these capabilities are wrapped up in an easy-to-use interface, one capable of instantly looking at the data in your desired way. With Trovata, you finally have the tools to deliver fast, accurate global cash visibility when you need it most.

Transform Your Treasury Management Strategy with Global Cash Visibility

Imagine all you can accomplish if you and your treasury team aren’t dependent on aggregating and normalizing bank data manually.

You could enable your team to become strategic advisers by focusing on analysis that assists leadership in making more informed decisions. With Trovata’s API approach to treasury management, you can easily automate your cash reporting, forecasting, analysis, and money movement in weeks, not months, with no internal IT required.

Download our case study on GoTo, the company that empowers others to work from anywhere, to learn how you and your team can stay focused on strategic analysis that strengthens your cash management strategy by reducing the manual tasks required to process cash.

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