PREFACE Treasury departments are becoming more and more strategically oriented, however, operational Treasury management remains one of the core activities. Financial technology (FinTech) is around to support corporate Treasuries to optimize Treasury processes and to increase the value that Treasury can add to the business. Next to the optimization potential, the trend towards digitization brings additional risks that have to be mitigated, for example cybersecurity and new regulatory risks. Digitization also requires more advanced technological and more in-depth compliance skills to be present in the Treasury department. Next to digitization, new financial regulations, increased geopolitical uncertainty and volatility will impact the Treasury function now and tomorrow. But the impact is not only on Treasury, it is on the company as a whole. As companies develop new business models, often driven by technology or new regulations, the Treasury function may need to adapt to facilitate new Treasury demands of these new business models. Very often digital transformation programs are in place within companies, but Treasury is not always involved in such new initiatives or pilots. This seems to be a paradox in the trend of becoming more strategically oriented towards the business. The question for Treasurers is whether they are able to support new business models and/or if the Treasury organisation itself should innovate its processes using new technologies. Overall interesting, but also challenging times to be a Treasurer. When and how to be prepared for what’s next? Adaptive Treasury Treasurers seem to be cautious when adopting innovative financial technology. Recent studies show that Treasurers 2 TREASURY SOLUTIONS 2019 often still adhere to more ‘traditional’, mature and proven IT solutions. These solution providers are all investing and preparing themselves to be ready for digital innovation. Competition however increases, from new FinTech companies and start-ups that can benefit from new technologies without having to deal with legacy systems. These companies also work with more lean and agile processes that facilitate a quick entry to the market, often done in co-creation with corporates. We expect digital Treasury innovation to become more explicit and present in the coming years. Of course there will not be a big bang, but it is not to be ignored. With techniques like Robotic Process Automation (RPA), daily repetitive tasks of a Cash Manager can be optimized. When applying Artificial Intelligence (AI) decision making can be improved by unveiling insights that were previously hidden in (big) data. Examples are the identification of cost drivers and improved forecasts, enabling Treasurers to be much more proactive instead of reactive and to bring down the heavy workload of active forecasting. We believe that Treasurers need to take the ‘Adaptive Treasury’ approach, whereby there is not only awareness, but also a roadmap available for digital innovation. The roadmap should clearly set the ambition level, but it is not a static plan. In the new world, quick feedback loops are required to rapidly prepare for new situations and to be ready to absorb and embed innovation in small realistic steps that are tested, improved if necessary and implemented. The roadmap is impacted by the current maturity level of the Treasury organisation. Also, the role of the Treasury towards the business is a key factor. An inhouse bank offers other opportunities compared to situations where the Treasury department solely acts as a business consultant. Other key factors are the current system landscape and the relevant external relations. Within Orchard Finance, we support companies to define their roadmap and to realize an adaptive Treasury organisation.
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