Treasury Management: How Legacy Technologies Hold You Back

Written by Keegan Chamberlin
August 26, 2022

Treasury management technology has seen a steady ascent since the late ‘70s. The advent of the SWIFT network was the first significant step in bringing treasury operations tech into the modern era. SWIFT created a structure around the execution of financial transactions and international payments.

The Evolution of Treasury Technology

Other technological developments came along as the years rolled on. The invention of the spreadsheet and on-premises treasury management systems in the mid-80s further streamlined data processing. 

While spreadsheets promise to automate data management, manual processing is often required to gain meaningful insights. Many companies still find themselves in a similar position decades later.

Thankfully, that is beginning to change. In the past five years, banks have become more open to third-party technology providers building APIs that connect directly to their bank portals. 

Trovata, for example, is harnessing technologies like cloud computing, open banking APIs, and machine learning to bring treasury management into the twenty-first century. 

But how exactly is it helping financial teams manage cash like a pro? To understand that, let’s dive into the challenges of managing cash in spreadsheets.

treasury management

The Challenge of Treasury Management in Spreadsheets

The rise of spreadsheets was both a blessing and a curse. For the first time, finance teams didn’t have to manage cash flow by hand in physical books. Instead, you could house data in a single spreadsheet, perform calculations on massive amounts of that data quickly, and produce basic reports like graphs or pivot tables. 

Spreadsheets, for all their amazing capabilities, have their limitations. While they enable a person to manage data quicker than on paper, it’s still a largely manual process. The natural increase in transactions within our digital world has introduced new challenges:

screen shot 2022 08 26 at 13114 pm
Figure: Traditional Treasury Management Workload

How Spreadsheets Hold Your Treasury Management Back

  • Spreadsheets create silos of information. Spreadsheets were never meant to be shared among many team members. As a result, it becomes difficult to pin down who has the most up-to-date information.

  • Time-consuming, manual process to consolidate & organize. Financial teams know the drill well. Building any new report involves navigating to every bank portal, downloading the statements, and normalizing all transactions into a single spreadsheet.

  • Manual data entry invites the potential for human error. The more hands you have in a spreadsheet, the chances of having errors increase. 

  • No scenario modeling & variance analysis tools out of the box. Since it takes an incredible amount of time to produce the most basic reports, scenario modeling is a distant dream for many teams.

Cross-training teams on how to process massive amounts of spreadsheet-dependent data is a time-consuming process most organizations can’t afford to undertake. Leaving treasury management to a few key people is also problematic, as that knowledge goes when those people take new positions. 

Digital transformation is not just a buzzword; it’s becoming necessary for companies that want to scale in the future. 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.

Why Digitize Your Treasury Management?

With rising inflation, interest rates, and geopolitical risks, it’s normal to feel uncertain about the future. Still, within uncertainty, finding clarity is possible with the right tools and technology. You can increase your agility and thrive within bull and bear markets by digitizing your treasury management.

Increased Cash Flow Visibility Across Key Accounts

Digitizing your treasury through bank APIs empowers your team with agile access to balance and transaction data. Paired with an automated cash management platform, like Trovata, banking APIs consolidate and normalize bank data across different accounts into a standard format. This makes it easier to track cash without having to log into multiple portals.

Improved Financial Transparency With A Single Source of Truth 

Taking a proactive approach to treasury management requires a single source of truth for all bank data. By establishing one platform for cash balance and transaction data, you can improve transparency throughout the decision-making process for all key financial stakeholders, such as the CFO, accountants, and financial planners.

Stronger Treasury Management Processes 

Automating bank aggregation frees your team up to perform more meaningful analysis. Next-gen cash management solutions save and maintain your organization’s forecast baseline, so you can seamlessly scenario plan. Proactively building these scenarios empowers the creation of contingency plans so that you can act swiftly through market changes.

How to Achieve a Digital Future

Build A Business Case

As more services digitize, the volume of bank data will increase. As a result, analysis, discovering patterns, and presenting projected outcomes become critical.

Digitally transforming your treasury management doesn’t just mean upgrading to more advanced technology; it’s also about optimizing current operational processes and culture toward valuing data-driven, efficient operations. 

If you don’t secure buy-in across your organization, you won’t get the most out of the new technological advancements powered by open banking APIs and machine learning algorithms. Building a business case is key to demonstrating that value.

Consider the following when building your business case for digital transformation:

  1. Identify Your Organization’s Needs and Opportunities. Before upgrading technology, identify your organization’s financial needs desk-by-desk, function-by-function. This will help you understand the tools and processes needing to be implemented that can help you meet your needs.

  2. New Tools and Technologies That Enable You To Meet Your Goals. Technology is constantly changing and expanding, bringing on new growth opportunities. Gaining an understanding of your manual processes can help guide your research. 

Gain Internal Sponsorship

Change can be scary, so it is necessary to demonstrate the value your teams can realize through digital transformation. With a business case worked out, it’s time to obtain the high-level support you need. If the project hits a bump in the road, it’ll certainly help to have a voice that encourages others that it will be a worthwhile change.

As a leader, you can’t do this alone. You must communicate with partners and internal systems to ensure you can connect to all your bank and ERP data through APIs. For that, you’ll need support from IT, your banking partners, and perhaps from other departments such as legal and procurement.

Determine The Right Tools For Your Business

Establishing a baseline of automation to manage cash as your organization scales is critical. Here, at Trovata, we find that the most helpful cash management platforms put a priority on the following:

  • Built-In-The-Cloud. Cloud-based solutions establish a single source of truth for all your bank data. As a result, it naturally increases transparency throughout your entire organization. 

  • API Integrations with Major Banks. Open Banking APIs enable you to connect your automated cash management platform directly to your organization’s key accounts empowering your organization with complete cash flow visibility.

  • Dynamic, Automated Reporting and Forecasting Functionality. Your financial team shouldn’t have to create cash reports and forecasts manually. Instead, enable them to focus on strategic analysis. Many of Trovata’s clients save 40+ hours a week by automating the generation and maintenance of their cash reports and forecasts.

  • Minimal or No IT Required. It shouldn’t take months to understand your cash flow fully. Your tech partner should manage all API connections, so you can get up and running in a matter of weeks and trust your data is accurate. 

Out With The Old, In With The New

Breakthroughs in automation and cloud computing are moving treasury management technology forward just as SWIFT and spreadsheets advanced treasury operations in the 70s and 80s. 

Implementing a cloud-based, digital treasury platform in your organization will help you keep pace with technology and maximize the efficiency of your team members.

Download our latest resource, Treasury Management 101: 5 Benefits of Digitization, to discover how you can manage cash like a pro by automating tedious treasury management tasks.

treasury management 101 5 benefits of digitization visual cta

Subscribe to Newsletter