Building Treasury’s Digital Culture – Harnessing Next Generation Technologies
Published on August 14, 2019
Rohit Talwar
Rohit Talwar – Futurist Speaker
By Rohit Talwar
How might technology innovation impact the future of the treasury function?
Corporate treasury is a classic example of core business functions that will be reinvented in the coming years. Perhaps the biggest challenges are those of raising the function’s technological literacy and evolving genuinely digital mindsets. As the digital disruption typhoon sweeps across the business landscape, surviving the storm requires senior treasurers to raise the understanding of themselves and their teams of what emerging technologies enable in terms of functionality and new ways of thinking and doing business.
Opportunities are arising through new FinTech solutions for treasury functions to bypass banks and other providers—but understanding and realizing the opportunities requires deep digital literacy. Technology advances enable radically different concepts underpinned by dramatically different ways of looking at treasury activity, hence digital culture needs to encompass both the emerging technology and the associated mindsets.
At its heart, a digital mindset means seeing everything as data rather than physical objects represented by data—and hence something that can be analyzed and manipulated in ever-more clever and complex ways. For example, automotive industry leaders are starting to see that the biggest value in cars lies in software and the data it generates about every aspect of the car and what the passengers do while travelling.
The car has become a monetizable data generation platform and now offers the potential for constantly updateable revenue streams rather than a single fixed purchase. With the rise of Tesla’s autonomous vehicles and similar digitally minded manufacturers such as Local Motors, who crowdsources their 3D printed car designs, a car is no longer just a means of transportation—it becomes a physical embodiment of digital products and services.
Successful digitally literate business leaders in treasury will need to embrace disruptive technologies such as artificial intelligence (AI), blockchain, cloud computing, hyperconnectivity, and process automation. These technologies enable the creation of tools that can help increase efficiency and effectiveness, and create more value for internal customers and others who treasury connects with.
As financial services firms and central banks start adopting blockchain and digital/crypto currencies, the pace of change in the marketplace will only accelerate. China is exploring the technology with the intent of transforming its entire finance sector while others are looking at blockchain as a platform for frictionless sale and distribution of equities, currencies, bonds, and other assets.
The secure and irrevocable nature of blockchain transactions coupled with the reduction in transaction fees makes it an attractive proposition for executing direct peer-to-peer transactions between counterparties without the need for intermediaries such as banks. Artificial intelligence also offers the potential for smarter analysis and automation of many routine tasks.
Positive digital treasury cultures will explore ways of enhancing the role of people in the organization through AI rather than simply automating the work. Finding deeper, meaningful ways to connect to employees and encourage their best work, and providing worthwhile experiences for both employees and internal customers—i.e. building relationships—will be the true hallmarks of the digitally enlightened organization.
- What does treasury leadership need to unlearn in order to enable the emergence of a digital culture?
- What opportunities are there on offer from banks and other vendors to conduct safe, low cost trials of next-generation treasury technology?
- What modeling is your organization doing of the financial impact of moving to blockchain and cryptocurrencies for key processes in treasury and finance?