Whether we are considering technology that will improve our payments systems, optimise cash forecasting or looking at treasury management system (TMS) add-ons to manage FX trading, the potential is impressive. The reality, however, is that take-up of fintech and other treasury technology offerings remains rather low. And that’s down to the challenges that many treasury teams face.
The practicalities are all around us, and the pressures of the past 18 months have been well rehearsed. We have heard that the pandemic has accelerated technology adoption across the board. That may be so in organisations where the case for adoption has already been made and won. But in smaller organisations – ones where treasurers are outlining cost-benefit cases from scratch – the hurdles are significant. Well-integrated TMSs are common among large multinationals. Smaller companies are less well resourced and it may be harder to persuade boards on the value proposition of new technology.
Whatever their size, many organisations face another significant and rather troubling barrier – around technology skill and awareness. In fact, the level of technology skills within treasury functions can be worryingly low.
Throughout my career, I have always found my technology skills to be invaluable. In two early roles, I automated my day-to-day tasks, generating routine reports for clients, using relatively basic functionality. However, I see a lot of students and young professionals who lack both skill and confidence around technology. Developing those individuals to a point where they could automate routine tasks, become competent with Visual Basic for Applications and understand the fundamentals of treasury technology is often a long journey.
This is a significant issue, because technology implementations often require a champion – a technology enthusiast who will introduce new ideas within their organisation and drive change. Whether they are recruited specifically as a treasury technology specialist (and again that’s likely to be a reality only for the largest companies) or because they have an affinity and liking for technology, tech implementations are unlikely to succeed without such a person.
Their skills and enthusiasm will be required on a number of fronts:
Once a project gets off the ground, the technology champion will almost certainly be expected to take the lead as things progress towards the implementation stage. They will subsequently play a role training colleagues, promoting the system and generally driving its integration into the treasury and finance operation.
If there is no one in the team who is systems-minded, that is where the challenge comes in. Those treasury teams may struggle to implement anything new.
In the longer term, treasurers will need to think more about technology implementations and any skills gaps within the team. For smaller teams, the recruitment policy will necessarily be quite broad, with group treasurers and heads of treasury looking for treasury, financial knowledge and accounting skills. For the future, though, as a profession, we will need to be much more rigorous and look to fulfil not just the treasury aspects of a role, but the technology aspects as well.
Fintechs, treasury technology providers and banks in combination offer treasurers a considerable amount of promise on the technology front. If we want to see that potential realised and those technologies implemented, we will need a greater willingness to up our game on this front.
Anu Mensah is head of treasury at housing association L&Q
