A new treasury technology survey report by TIS and Strategic Treasurer has highlighted the growing importance of new and existing technologies to treasury teams.
The survey, which gauged the views of nearly 250 senior treasury professionals, found that 53% currently use a treasury management system (TMS) or treasury and risk management system (TRMS), with 16% planning to implement a system within two years. Respondents also plan to adopt technology such as bank fee analysis systems (20%), reconciliation platforms (14%) and payment factories (13%).
Technology adoption is being driven by a number of factors. “A lot of treasurers are looking to address rising borrowing costs and maximise interest income,” says Jon Paquette, SVP Solutions Americas at TIS. “For that reason, cash forecasting has been a really strong topic this year.
“The geopolitical environment has also put the spotlight on payment controls. And a third trend is that as many companies migrate to cloud ERP systems, they are looking for plug-and-pay bank connectivity tools to facilitate those migrations.”
We’re seeing a lot of interest in AI and ML... a big catalyst was the arrival of ChatGPT, which made everyone realise the power of generative AI and how that can result in major productivity changes
The survey highlighted the importance companies are placing on artificial intelligence (AI) and machine learning (ML) for both forecasting (74%) and fraud (73%). “We’re seeing a lot of interest in AI and ML for a variety of reasons,” says Paquette. “A big catalyst was the arrival of ChatGPT, which made everyone realise the power of generative AI and how that can result in major productivity changes.”
He notes that generative AI programs are only really effective if the company’s data is consolidated in one place, “so we’re seeing a lot of organisations put in place data-lake strategies that can help them unify data and take advantage of those technologies in the future”. However, some organisations have banned their employees from using such programs because of concerns about inputting confidential information into software that can learn autonomously and lacks clear regulations.
On another note, the survey found that interest in AI/ML is “notably higher” in Europe than in other regions. “Europe is further along in the digitisation game due to factors such as an earlier move to electronic transactions and initiatives like PSD2, which has accelerated the open banking movement in Europe,” comments Paquette. Another factor is that certain fraud detection services used in the US, such as account verification services, don’t exist in Europe.
People don’t want to ‘get on the wrong bus’, they want to make sure that if they’re implementing legacy protocols now, it won’t hinder their ability to move to AI, ML and open banking APIs in the future
When selecting new technology, respondents’ top three priorities were vendor commitment to the product over time, leveraging modern technology and the robustness of the vendor’s future roadmap.
“We’re at an interesting point where a lot of emerging technologies are getting people’s attention, but maybe they aren’t ready for full adoption by those organisations yet,” says Paquette. “At the same time, people don’t want to ‘get on the wrong bus’, they want to make sure that if they’re implementing legacy protocols now, it won’t hinder their ability to move to AI, ML and open banking APIs in the future.”
So, while treasurers recognise that new technologies can be transformative, “they are also taking a pragmatic approach about how quickly they adopt these technologies, and the importance of aligning them with their current business objectives,” Paquette concludes.
Rebecca Brace is a freelance business journalist