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8 trends impacting tomorrow’s treasury

Your money today may look differently tomorrow.
By Bank of America
Published Last updated This article is more than 2 years old.

The evolution of technology continues to play a pivotal role in the creation of a continuously changing digital world—be it in the consumer space with self-driving cars or in the corporate space with distributed ledgers and artificial intelligence. 

This evolution presents a set of very dynamic problems and opportunities for the finance function. Considering the ongoing impacts of globalization, rapid technology evolution, and the rise of disruptive business models, the treasury function will need to adapt and evolve.

To help you stay ahead, we have identified eight overarching trends that are driving opportunity, making business easier, and enabling a more intelligent treasury.

1. Innovation

Innovation is forcing companies to evaluate how they provide services and explore new business models and opportunities for global growth without borders.

Innovation is forcing companies to evaluate how they provide services and explore new business models and opportunities for global growth without borders. Modern consumer pressures create opportunities for treasury: potential new partnerships, extended networks, or the provision of new services. This could also mean using new methods, such as distributed ledger technologies to make accounting continuously auditable, for example.

2. Dynamic business models

In the digital world, new business models are continually emerging, often disrupting traditional business models for dynamic ones. Treasury has to adapt and continuously integrate, build, and redefine its core services to according to the evolving needs of these dynamic business models.

3. Best of breed

Treasurers have developed skills in system integration due to the increasing pace and cost of change. As a result, treasury can now choose best-of-breed solutions for specific areas such as FX trading platforms, risk management, and cash flow forecasting building on a maturing data landscape.

4. Strategic insights

It is possible to use automation, such as machine learning, to generate insights faster and augment capabilities to create business intelligence.

Treasury generate huge quantities of data, but that hasn’t always guaranteed insights. Cash flow forecasting and visibility of cash have been challenges for many years, but a maturing reference data landscape and best-of-breed solutions can enable treasury to evolve from operational management to strategic insights.

5. Intelligent automation

It’s possible to use automations such as robotic process automation and machine learning to generate insights faster and augment capabilities to create business intelligence more efficiently. Implementing advanced intelligence with dynamic frameworks is an evolutionary process moving from lean process optimization to intelligent automation.

6. Real-time processing

Increasingly, businesses are demanding real-time transactional capabilities across all aspects of their supply and delivery value chains.

Business models are dynamic, because of consumer pressures around digital commerce. Regulators have recognized the need for value now, and real-time payment systems are emerging on a global basis. For treasury, this means a move from batch processing to real-time processing—continuously clearing and settling, every day, everywhere.

7. Centralization

The challenge in a treasury function is correlating its drivers—control, compliance, risk management, cost efficiency, and capital optimization—with the need to operate 24/7/365, globally. With a strong governance framework and use of centralized structures that concentrate knowledge, processes, and operations, the treasury function can increase oversight and control globally in real time. 

8. Realigning risk

Technology is clearly an enabler for much of the transformation identified within these trends, but it includes risks with cyber security, fraud, continuity, capacity, and applicability. Cyber fraud means risk management will be an area for continual investment for treasury. Fundamentally, treasurers must realign their risk perspectives and discipline to the digital world.

The path to a more intelligent treasury

For today’s treasurer and their team, embracing these trends and understanding their causes, impacts, and potential solutions will be critical to the next evolution in the treasury function.

Not all of these trends will be relevant to every organization, nor will they replace the intellectual capital of people, but in advocating and explaining them, we stand with you on the path to a more intelligent treasury.

Take a deeper dive into how these trends impact treasury and your business. Read the full white paper.

GTS Advisory: Our Global Transaction Services (GTS) Advisory team consists of former corporate treasurers and practitioners, combining decades of treasury experience. With ten members located across the globe, we offer advisory services to our most valued clients to help them meet their strategic goals.

GTS Advisory insights can include subjects such as working capital optimization, M&A, operating models, risk management, capital strategy and innovation. Support is often hands-on and on-site, and our advisors frequently help clients build strategic treasury roadmaps, inform a capital or hedging strategies, or prepare change management business cases. We deploy the team as necessary to help address short-term challenges, as well as to realize long-term treasury objectives.

“Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation.  Lending, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC.  Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and Members of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA.

This article was produced by Bank of America and not the Quartz editorial staff.

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