Fintech Insights

What’s driving adoption of digital treasury technology in the cloud?

Steve Wiley, vice president, treasury solutions, FIS

October 26, 2020

The current pandemic has not only exacerbated existing challenges for treasurers around the world; it’s also created new ones. For example, securing liquidity has long been a major priority for many organizations. But treasurers have now also had to navigate a market characterized by FX volatility, supply-chain disruption and escalating cybercrime – all while managing a rapid transition to remote working.

The scale of this challenge is revealed in a new market report from FIS®, Crisis as a Catalyst for Change. We surveyed 336 corporate treasury, payments and receivables professionals around the world to identify the challenges currently facing treasurers in their day-to-day responsibilities, from mitigating FX risk to managing working capital.

But our research also highlights the challenges that have been worsened by COVID-19, including investment and debt management (69 percent), interest rate risk management (65 percent), liquidity and working capital (63 percent), and FX risk management (60 percent).

At the same time, cybersecurity is a major concern, cited by 64 percent of treasury professionals. With the risk of fraud and cybercrime soaring in recent months, it’s more critical than ever that companies have robust measures to protect their treasury processes from cyberattacks.

Beyond these issues, treasury teams have also had to rapidly switch to work-from-home models. This has meant adapting to new ways of working and communicating – often while also attempting to balance childcare and home learning responsibilities. For a significant portion of treasurers, this has been a great success: 31 percent of the survey’s treasury respondents say their treasury departments can perform most or all of their treasury operations offsite. But for many others, the transition has proved problematic – and 11 percent of respondents say that less than a quarter of their treasury functions can be carried out remotely.

As the crisis continues, many organizations expect remote working conditions to continue for some time. It’s therefore essential that treasury professionals have access to the tools they need to carry out all of their activities away from the office, and that they are equipped to support their businesses through this crisis and beyond.

In this environment, treasury professionals are increasingly seeing the value of treasury software. Indeed, 92 percent of professionals plan to implement cloud or software as a service (SaaS) solutions, or they’ve already done so. This should come as no surprise: cloud solutions offer a wide range of functionality and enable treasury teams to carry out their processes away from the office without the infrastructure requirements of an on-premise solution.

Cloud solutions can also integrate seamlessly with ERP and other systems and can significantly reduce the total cost of ownership for treasury technology. What’s more, they ensure that treasury teams are always using the latest version of the software – meaning there’s no need for the disruption involved in upgrading a system. If your provider has a hyper focus on cybersecurity, you can also reduce the risk of cyberattacks.

Given the myriad challenges faced by treasury teams, the value of cloud solutions has never been clearer – and treasurers who embrace new deployment models now will be better placed to work faster and more efficiently in this challenging environment.