Advancing the Treasury function with technology

  • date

    May 25, 2023

  • Author name

    Denis O’Brien

  • category N/A
  • time to read

    3 minutes

Image Article
The Way Forward

Treasury departments are under pressure and must adapt to rapid technological advancement. Managing multiple liquidity pools, streamlining numerous payment types and maximising value are some of the treasury division’s pressure points. With the rise of APIs and the inevitable shift to a digital-first approach, treasurers need to embrace change. This attitude has been further accelerated by the Covid pandemic and remote working, forcing institutions to reprogramme their business processes and workstreams.

If recent history has taught us anything, businesses must prepare for unforeseen disruption and the ability to manage cash flow and reserves. In a volatile economic landscape, access to real- time data and accurate forecasting is the lifeblood of a business. 

Increasingly, treasury departments manage dispersed liquidity pools across multiple jurisdictions and currencies. Yet some treasury functions are becoming more centralised. There is a delicate balance between a consolidated department and a widely distributed cash pool. Get it wrong; profit streams can quickly erode due to forex rate swings. This is particularly prevalent in emerging market economies, where currency swings can be as high as 50%.

However, technology is fighting back, and the horizon is not all doom and gloom. With the impending change within the payment ecosystem (adopting the ISO2022 standard), banks and service suppliers will be able to assist corporates in optimising their data capabilities and payment processes. Furthermore, there are APIs, open banking capability and tools to catalyse growth and change.

So, how do treasury departments evolve to cater to a fast-changing world with the future in mind? The changeover from legacy systems and manual processes to a digital-led solution does not happen overnight. Whatever technology one selects must fit into the requirements of the business units and the company. Ultimately, it is about striving for greater efficiency, automation, transparency and augmenting your cash position and decision-making. If you can achieve this, cost savings kick in, whilst automation unshackles staff to have more time to work on strategic tasks.

One such example is the rise of virtual accounts and their inherent benefits. Virtual accounts are a set of sub-accounts linked to a single ledger account, reducing the requirement for multiple physical bank accounts. They are also multi-industry. Businesses in FMCG, retail, legal, shipping, finance, hospitality, transport or healthcare sector often administer thousands of accounts daily. They need to reconcile accounts, open and close client fund positions and track payments.

By adopting Virtual Account technology, corporates benefit from greater visibility and instant control, translating to quicker reconciliation times, faster customer account management and a streamlined account process. Virtual accounts can also manage single or multiple entity structures and track, report, and settle inter-company loan positions. 

At Ceviant, we believe virtual accounts are a game changer for treasurers. Our clients can create and delete them directly from within the Ceviant platform, relieving them from branch visits or contacting an account officer. Consider pairing virtual accounts with instant payment capability and ERP (enterprise resource planning) integration, and one can start to imagine the uplift in productivity instantly. When you overlay a consolidated view of your cash position into an insightful interface, treasurers are empowered in their decision-making process.

Ceviant helps businesses protect and grow liquidity.