April 19, 2019
Zanders and FIS have taken the pulse of the corporate treasury market in the Benelux region about their plans around new and rapidly changing technology, which offers stronger functionality and opportunities for treasurers. Many treasurers are underutilizing existing technology despite new solutions being introduced. Based on the results, we conclude that corporate treasurers expect that new technologies such as artificial intelligence (AI) and APIs will improve the lack of support from the current systems on cash flow forecasting and risk quantification. Cybersecurity is also seen as an important driver to move away from on-premise installations of their systems.
Spreadsheets still widely used to support treasury
Treasury management solutions are the core technology tool used by treasury to manage the treasury function, although spreadsheets are still very popular, especially for cash flow forecasting. Spreadsheets are the primary tool and only 16 percent of the respondents use their treasury management solution for this purpose. Corporates indicated that the treasury management solution works very well for cash positioning and in-house bank functionality. Diverse opinions about the treasury management solution functionality appear in the areas of hedge accounting, foreign exchange exposure management, interest rate risk management, netting, and the workflows and controls.
Half of the subsidiaries of the respondents have access to the treasury management solution, either via uploading or entering data directly in the solution or by having view rights. In 20 percent of the occasions, the subsidiaries send the data to the treasury team and the team uploads it in the treasury management solution.
Cybersecurity is a key element in technical deployment
We see that already 70 percent of the respondents have their treasury management solution hosted at a third party or use a cloud-based solution (single or multi-tenant) and 30 percent have their treasury management solution on-premise. Cybersecurity and ease of deployment are seen as the most important aspects of software as a service (SaaS) solutions, followed by staying constantly up to date and costs. On the other hand, cybersecurity, reversibility and data protection are the main concerns about SaaS solutions.
Efficiency, better controls and improved security by new technological developments
According to the respondents, advanced cybersecurity protection and AI or predictive analytics will have the biggest impact on the future of the treasury system landscape in the coming one to three years. API technology and robotic process automation will also likely influence the functional requirements. However, the expectations are somewhat reserved around blockchain technology, with only 18 percent of the people expecting an effect in the coming years. Respondents expect that treasury will benefit from the new technology developments in the areas of better data accuracy, improved straight-through processing, improved controls and better functional capabilities.
Should treasury have a role in bank communication and processing payments?
Electronic banking systems are widely used for treasury, commercial, salary and tax payments. Host-to-host and SWIFT Service Bureaus are used by one-third of the corporates. The majority of the respondents mentioned that treasury should have a role, to a greater or lesser extent, in controlling and managing bank communications and payment processing of the company. The security around payment processing and processing payments on a global base is rated as primary challenges of payments processing. Seventy percent of the respondents have been a target of payment fraud, of which 80 percent was phishing. They reviewed internal controls and security to prevent future fraud.
Overall, treasury departments have an opportunity to modernize their treasury operations by leveraging the latest treasury technology.