Fintech Insights

The rise of digital treasury

Steve Wiley | VP, Treasury Solutions , FIS

October 24, 2020

The COVID-19 crisis has brought major challenges for corporate treasurers, from shoring up liquidity to navigating volatile FX markets. But it has also provided an unprecedented impetus for the adoption of digital technology, according to FIS’ new market report, Crisis as a Catalyst for Change , which surveyed 336 treasury, payments and receivables professionals.

Unsurprisingly, the report identified COVID-19 and related uncertainty as the primary challenge for treasury professionals. However, it also highlighted the breadth of treasurers’ other challenges and priorities in the current environment, including economic uncertainty, cybersecurity risk and the need for global liquidity optimization.

Against this backdrop, the adoption of digital technology is a top priority for treasury teams. Two-thirds of treasury professionals are planning to increase their investment in digital technology in the coming 12 months, with 62% citing COVID-19 as a driver. Meanwhile, with cybercrime levels rising, 53% identified security and controls as prompting greater investment in digital technology.

Other reasons to invest in treasury software include replacing legacy technology, as mentioned by 51% of treasury professionals. This is particularly critical in the current market; as well as preventing treasurers from taking advantage of the newest features and functionalities, outdated systems that lack sufficient security and controls can also open companies up to the risk of cybercrime and fraud.

Finally, treasurers are also looking beyond the current crisis, with 49% mentioning business growth as a driver for investment.

Of course, digital treasury comes in many different forms. As treasury professionals seek to increase their investment in this area, many are turning their attention to advanced technologies that can provide real-time insights, streamline bank connectivity and optimize the cash forecasting process.

Where specific technologies are concerned, 61% of the survey’s participants are looking to adopt artificial intelligence (AI) and advanced cybersecurity protection, while 55% are focusing on AI with predictive analytics. But it’s not only about AI: treasurers are also seeking to tap into a wide range of digital initiatives, including real-time treasury, banking APIs, cloud and SaaS solutions, and SWIFT gpi.

When harnessed effectively, these technologies can help treasurers optimize the full range of treasury activities and access the insights needed to support better business decisions.

However, from the breadth of topics identified as areas of interest by treasurers, it’s clear that there is no one-size-fits-all where digital technology is concerned: Not all technologies will be a good fit for every company. As with any implementation, the first step should be to identify the pain points that need to be addressed and then build a business case demonstrating how these can be overcome using digital technology.