Cutting-Edge Treasurer Part 1: Treasury Technology Trends

Treasury departments are always looking ahead to plan how to add value and drive success for companies. Whether it’s financial planning or assessing future risk, treasurer’s hold an important, strategic role so companies can look forward to a successful future.  

That’s why it’s essential for treasurers to understand global technology trends and ensure that business processes are meeting changing needs in the treasury field.  

In this 4-part Treasury Series, we’ll discuss what it means to be a Cutting-Edge Treasurer and how effective understanding and leveraging of global technology trends can give your treasury department a competitive edge.  

Below, we’ll provide an overview of three essential pieces to the Treasury puzzle, exploring emerging treasury technology like Artificial Intelligence (AI), Robotic Process Automation (RPA), and Blockchain, payment transformations currently shifting Treasury processes, and how an increasing market for cloud-based treasury systems impacts treasury departments. We’ll dive into these topics in more detail in the rest of our Cutting-Edge Treasurer series.  

Emerging Technologies: AI, RPA, and Blockchain 

By 2025, 70% of all IT functions will be automated via APIs and AI. Besides the enhanced efficiency that Artificial Intelligence can bring for business processes and user interface, AI technology also aids in defending inevitable cybercrime faced by organizations around the world. 92% of companies report that payment fraud costs their companies half a percent of Total Revenue. Although the presence of cybercrime and potential revenue loss are daunting, companies are looking to AI technology to mitigate ever-growing cybercrime risks. 

Treasurers should also look to leverage Robotic Process Automation (RPA), an emerging technology used to reduce costs, enhance productivity, scalability and transformation of processes. RPA is a piece of software that mimics human actions to automate a distinct business process, using AI to advance human-level decision making capabilities.  

The benefits of RPA provide 24/7 productivity and 100% accuracy, which makes it no surprise why treasurers are increasingly shifting to leverage this emerging tech. A recent global survey by RIA Gmbh showed active use of RPA at 48% of firms, with 40% planning to implement soon.  

Another important emerging technology to consider involves Blockchain. A blockchain is a decentralized, public digital ledger that is duplicated and distributed across a network. Blockchain technology eliminates the need for a middleman, creating a secure solution for service providers and customers to connect. This decentralized source allows customers and service providers to transact securely and directly with each other, increasing visibility, speed, and traceability of transactions.  

The benefits of Blockchain are currently being leveraged around the world, but by 2027, 10% of worldwide GDP will be stored using Blockchain. Blockchain payments are happening now, which means treasury departments must have Distributed Ledger Technology (DLT) to support its payments. We’ll dive more into these emerging technologies in Part 2 of our Cutting-Edge Treasurer series. 

Payments Transformation 

Not only is understanding emerging AI, RPA, and Blockchain technology a key component to becoming a Cutting-Edge Treasurer, but also being at the forefront of payment transformation is a vital step to optimizing treasury operations. Virtual card payments, ISO 20222 payment formats, and Real Time Payments (RTP) are transforming the payments landscape for treasury departments. 

If your organization hasn’t transitioned to ISO 20022, now is the time. Central banks are adopting the ISO 20022 standard by 2023, which enables banks to channel instant payments across borders and through domestic systems for all currencies between banks, payment providers, card schemes, RTGS and local clearing housings. By 2023, ISO 20022 will represent 79% of the market volume for High Value Payments (HVP) and will be 87% of the dollar value. Organizations who fail to transition could risk being excluded from international payment systems. Learn more about ISO 20022 and its implications in our blog post, “Electronic Payments: The ISO 20022 Standard.”  

Additional payment transformation opportunities including the launch of the US “FedNow Service” and Virtual Card payments are emerging as trends in the payments industry. We’ll explore these topics in more detail in part 3 of our series.  

Migration to Cloud 

Finally, treasury departments must be aware of the ever-growing shifts to the Cloud. Today, more and more treasury systems are being implemented in the cloud, either as Software as a Service (SaaS) or as cloud solutions on private client databases. Cloud based treasury and risk management applications continue to outpace on-premise and other solutions, and growing market demand has resulted in the expansion of Treasury Management System (TMS) vendors to accommodate global organizations that seek to connect and standardize treasury processes. 

By 2025, 80% of all enterprise workloads will move to the Cloud, and 90% of enterprises will use a SSO with MFA (single identity platform + multi factor authentication), which bridges on-premise applications and the cloud. If your treasury department hasn’t migrated to Cloud, now is the time to consider. Cloud migration can allow your treasury department to strategically compete with competitors who may have already migrated and seen its benefits.   

Understanding the trends that have shifted the treasury landscape and leveraging them in your treasury operations is essential. A failure to do so could result in your treasury operations to be outpaced by competitors. In the next segment of our 4-part Cutting Edge Treasurer series, we’ll dive deeper into what the emerging treasury trends mean for your organization, and how your organization can begin to leverage trends in treasury management that will optimize treasury functions.   

Check out our Treasury and Finance blog to learn more treasury updates, and reach out to [email protected] to schedule a time to discuss your organization’s unique treasury needs

  • Ms. Ericson serves as Elire's Marketing Associate, supporting Elire’s digital marketing efforts. Summer collaborates with the Elire Marketing Team to develop engaging and educational content that delivers value to the lifecycle of Elire partners and their applications.

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