Top 5 Treasury Tech Trends to Know

The race for digitization is more than a response to the pandemic.

It’s the immutable quality of specific technologies and the access to financial systems regardless of location that speed along the process.

When you think about it, treasury is no different.

But to say that this division across organizations is in dire need of a technological disruption might be an understatement. Think of the manual reporting and legacy account information in paper format that prevent you from meeting your treasury goals.

You want to know the leading technology trends to better accomplish your strategic objectives as a treasury and financial team.

1. Artificial Intelligence and Machine Learning

Artificial intelligence (AI) is machine intelligence that mimics human responses to certain situations. You see this in technology like predictive text.

Your treasury departments can significantly benefit from this technology to increase process controls and the quality of information presented.

You may find a tremendous difference between the processing speed of AI when compared to its human counterpart. The speed of this reporting affords you better decision-making as the information is still fresh.

You can teach AI to work within the protocols you set for it. This ensures that the information presented is exactly what you requested. For treasurers, this is invaluable as high-quality, error-free information is an essential component of your business.

Perhaps you are unaware of the information at your disposal. Ledgers, reports, and various client files contain snippets of information that can help shape your future campaigns. The monotonous task of data mining is ideal for AI.

Machine learning (ML) is another technology type that relies heavily on the data it receives to be accurate.

Accurate data allows machine learning to take over treasury tasks that become mundane and repetitive, such as data aggregation and reporting.

ML and AI often work together to create data packs filled with good, usable information. You may find that this information looks like standardized data from various locations.

For example, it comes from various accounts, ledgers, balances, and transactions. When you combine ML with predictive analysis, you can access more efficient and accurate data sets.

2. Robotic Process Automation

Not only factories and production plants benefit from robotic process automation (RPA). This automation standard is now an essential component of data processing that allows you, your treasurers, CFOs, and anyone in the organization who needs to process cash reporting to take advantage of the technology.

RPA uses software and tools to mimic human behavior when performing digital tasks. This is because RPA:

Takes on monotonous tasks
Processes tasks faster and more accurately than human counterparts
Doesn’t suffer fatigue, which means uninterrupted processing
Combines with other technology, such as AI and machine learning to enhance the treasury experience as a whole

3. Cryptocurrency

Cryptocurrency is fast becoming another financial asset companies must keep on their radar. Many tech companies are investing in cryptocurrencies, such as Tesla and Block.

Even the US government is researching the implications of establishing a government-backed digital currency.

In the future, more and more institutions and companies may invest in cryptocurrency due to the ease of transaction. Therefore, being aware of these different digital currencies and the technologies surrounding them is critical if your leadership team is interested in investing.

4. Cloud-Based and SaaS Solutions

Cloud-based SaaS solutions are taking the industry by storm.

For decades, spreadsheets have made it cumbersome to gain a whole picture of their cash position. In the last few years, cloud-based cash management platforms have emerged, enabling treasury and finance teams to access their cash position and transaction data from anywhere.

Paired with banking APIs, teams can establish a single source of truth for all their bank data as it automates the data aggregation and normalization process.

Some treasury departments already use cloud platforms and have found immense benefits in switching to them. It can help your organization scale its operations, thanks to the fluid movement of treasury data between teams.

Cloud-based treasury applications, when combined with automation, allow groundbreaking reporting standards and can be a serious boost to your treasury function.

5. Predictive Analysis

Predictive analysis has existed for a few years, yet some finance and treasury departments still haven’t adopted it. Yet, this technology is at the forefront of planning as it uses past information to determine patterns and trends that might affect the future.

Predictive analysis has limitations as it depends on the quality of data it receives to be accurate.

For instance, if the information is stale and you don’t regularly update it, the predictive analysis might be incorrect.

In addition, conditions might also change and make it difficult for predictive analysis to be accurate. That said, this technology assists treasury departments in the following ways.

Market Data

Market data allows organizations to prepare for specific variances that may affect their finances. While much of this rests on the actual market shifts, you can determine much by past performance.

For instance, market shifts follow specific trends, and these trends are what help shape treasury and finance decisions for the future.

Cash Forecasting

You’ll need to know how to plan cash outflows, and with cash forecasting, you can apply trends to anything from rental contract increases to supplier prices. Automated cash management platforms utilize predictive analysis technology to mine historical bank data, which can help shape future budgets.

For instance, according to Trading Economics, the high inflation rate of 9.1% in June 2022 was partly predicted based on global trends following the pandemic.

Cash Collections

Cash collecting no longer needs to be an area of concern nor a significant risk for you. However, market trends don’t always predict major financial events like natural disasters, pandemics, or wars.

To plan more effectively, you need access to deeper insights into your cash flow.

With a cash management platform with predictive analysis capabilities, you can reduce risk by incorporating known factors and patterns according to past behavior to determine possible future cash inflows.