Innovation in treasury technology is accelerating and driving change in how finance and treasury teams do their work.
Traditionally, businesses relied on spreadsheets to handle their cash flow reporting and forecasting. Accountants and finance professionals would spend hours collecting transaction data from bank portals and aggregating it in a single spreadsheet. The data would become quickly outdated, requiring constant updating, which was inefficient.
Increasingly, companies are considering new advancements in treasury tech to increase efficiency. These tools allow you to automate the aggregation of banking data and other repetitive tasks. For many, this has resulted in dramatic time and cost savings, enabling teams to focus on high-value strategic work.
Some tools are better than others, though. So, what should you consider when evaluating the wave of new treasury tech?
What Is Treasury Tech and Why Is It Important?
Treasury technology refers to applications that make finance teams more efficient and effective. It includes tools that help treasurers manage cash, liquidity, and risk.
Some companies utilize treasury management systems (TMS) to manage cash flow on-premise in a data center. While these systems promise to automate many aspects of cash management, these systems are expensive and complex, requiring over 9+ months on average to implement.
Over the last few decades, there’s been a switch from locally hosted applications to software-as-a-service (SaaS) applications, typically hosted on private clouds. Finally, in the past few years, the newest generation of treasury tech has evolved to run on public cloud platforms like AWS or Google Cloud.
Throughout this evolution, treasury technology has become more powerful, with a higher capacity for obtaining, managing, and analyzing data. At the same time, it has become less expensive to use as companies do not have to purchase and maintain their computing infrastructure.
The Challenge with Traditional Treasury Workflows
Treasury technology helps solve a traditional challenge associated with treasury workflows: time constraints. According to Strategic Treasurer’s 2020 Treasury Perspectives Survey, over a third of corporate treasurer respondents reported that they have responsibilities they are currently unable to perform because of a lack of time. As a result, they are neglecting business-critical functions.
The top functions that survey respondents report neglecting because they lack time are:
- Financial risk management
- Relationship management
- Fraud monitoring
- Cash forecasting
- Compliance and bank account management
What Are the Benefits of Treasury Tech?
Treasury technology, most importantly, simplifies their day-to-day by automating repetitive tasks.
For example, some tools use robotic process automation (RPA) and artificial intelligence (AI) to automate cash management processes. By automating repetitive, low-value daily tasks, these advancements in treasury tech enable their teams to focus on higher-value tasks and other priorities.
Other potential benefits of automation and treasury tech include:
- Fewer errors
- Greater security
- Greater accuracy in forecasting
- Can scale to accommodate growth
- Better fraud detection and prevention
Next-gen treasury tech solutions make these benefits available to companies that may not have been able to access them before. While some of the largest companies may have been able to afford early TMS solutions—or build their own—most companies didn’t have the resources. They have primarily relied on spreadsheets to connect their ERP systems with data from banking portals. Next-gen treasury technology solutions make powerful treasury data management accessible to companies of any size.
What Treasury Tech Tools Exist?
What treasury tech is now available? Here are some of the tools at your treasury team’s fingertips:
- Cloud computing services. Cloud computing gives you access to powerful remote computing. This lets you scale your infrastructure without needing to purchase or maintain equipment.
- Business intelligence tools. BI and analytics tools allow your teams to retrieve and analyze data easily. These tools enable you to draw the critical insights you need to inform your business decisions.
- Security and fraud prevention. Security attacks are increasingly sophisticated and persistent. Some treasury tech tools help you become more resilient to security threats and fraud.
- RPA and AI. RPA and AI tools help you elevate your efficiency, allowing you to automate simple tasks and reduce the need for human labor resources.
These are just some of the tools that can make treasury and finance teams more efficient. Some cash management platforms—like Trovata—roll all these functions into one platform, providing a single solution for cash flow analysis, reporting, and forecasting.
Evaluating Treasury Technology Options
The right treasury tech tool can make your team more efficient and allow you to spend your time on value-added, strategic tasks. How can you evaluate potential tools to see if they’re the right fit? Here are some useful factors to consider:
- Onboarding. The time to implement a new technology tool can range from a few weeks to several months. Look for a tool you can implement and use quickly. Trovata, for example, can be implemented in under 7 weeks compared to 9+ months compared to other competitors.
- Implementation resources. Some tools require a significant investment of time from your development or IT team. Look for tools that require fewer tech resources to implement—ideally, you’ll be able to set up your tech stack without any help from your IT team.
- Your current tech infrastructure. You want to ensure that any new tech will fit with the tools you’re already using. Look for flexible and easy-to-integrate solutions with your existing tech systems.
- Data. Some solutions require you to refresh your banking data manually. That’s not ideal; instead, look for solutions that can update your data in real-time.
- Banking partners. Your financial institutions have their own systems for providing your data, including potentially providing an application programming interface (API). Look for tools that easily connect with your financial institution’s data system.
- Data analytics. Look for treasury technology that comes with the powerful analytics tools you need right out of the box.
- Automation. One of the biggest potential benefits of treasury technology is automating repetitive tasks. Look for tools that offer automation and AI features.
Powerful Treasury Technology is at Your Fingertips
Making the best business decisions requires gathering and using your treasury data effectively. Traditionally, it’s been hard to do that. The tech just wasn’t accessible to most companies.
Fortunately, the technology available to finance and treasury teams have improved significantly over the past few decades. These tools are now more accessible—and powerful—than ever before. Trovata is a leader in this area, providing automated cash flow management and helping you eliminate your manual workflows. Want to learn more about leveling up your treasury management strategy? Check our guide to successful treasury management.