How Banks and Fintechs are Meeting Treasury Needs
The world of corporate treasury has undergone a significant transformation. As businesses face increasingly complex financial challenges, banks and financial technology companies are stepping up to provide innovative solutions which streamline operations, enhance visibility, and improve decision-making for treasury departments.
Traditionally, corporate treasurers focused primarily on cash management and liquidity. However, their responsibilities have expanded considerably in recent years. Today, treasurers are expected to play a more strategic role, contributing to business planning and risk management while serving as valuable resources to CFOs and other C-suite executives.
Victoria Blake, chief product officer of treasury management platform GTreasury, says: “Treasury is the unsung hero responsible for making sure the business has enough money - cash - to run the business operations as needed and required.
“It’s very responsive to the agile and changing strategies of the business. It’s sitting on the top of the purse and making sure the liquidity that’s needed is where it’s needed, when it’s needed.”
This evolution has created new demands for technology and services.
Changing needs
To meet these changing needs, banks are reimagining their treasury services offerings. Many are moving beyond traditional transaction execution to provide more comprehensive, multifunctional platforms which address a wider range of treasury activities.
One key trend is the integration of advanced liquidity management tools into corporate global transaction banking (GTB) portals. These tools often include treasury management systems, cash forecasting capabilities, and supply chain finance solutions.
By embedding these features directly into their platforms, banks are positioning themselves closer to the core decision-making processes of their corporate clients.
Cutting-edge solutions
Recognising that they may not have all the necessary technological capabilities in-house, many banks are forming strategic partnerships with fintech companies. These collaborations allow banks to offer cutting-edge solutions while maintaining their established relationships with corporate clients.
As Craig Jeffery, managing partner of consultancy Strategic Treasurer, told Deutsche Bank: “Cooperation and collaboration are not merely an option; they are the way forward. Some banks are innovating directly, but there are far more start-ups and fintechs coming up with new solutions that need to be integrated.”
Banks gain access to advanced technologies and agile development processes, while fintechs benefit from the banks' established client bases and regulatory expertise.
Says Blake: “Fintechs have disrupted treasury operations through tooling - putting in the technology has allowed greater efficiency and greater accuracy. It’s also allowed a move towards standardised best practices, such as standardised file formats.”
Hurdles and challenges
While the new wave of treasury solutions offers numerous benefits, it also presents challenges for corporate finance leaders. One significant issue is budget constraints. A study by Coalition Greenwich found that only about a third of corporate treasurers have an independent technology budget. The majority share resources with other departments or rely on ad hoc funding requests, which can hinder their ability to implement new technologies effectively.
Integration with existing systems is another potential hurdle. Ensuring seamless connectivity between new solutions and legacy systems is crucial for realising the full benefits of these technologies.
Looking ahead, we can expect to see further innovation in areas such as artificial intelligence, predictive analytics and blockchain technology applied to treasury operations.
For CFOs and finance directors, staying informed about these developments and actively engaging with banking partners and fintech providers will be crucial.
For Victoria Blake, the real value of fintech solutions for corporate treasurers is freeing them up to be more strategic.
Says Blake: “This technology gives you the freedom to think about what I am really trying to do. Yes, it’s boring stuff about file formats and workflows and bulk actions but what that translates to is a single treasurer’s pride in their quality of life, it’s about empowering these folks. It’s good.”
4 ways technology is meeting treasury needs
Open banking, APIs and advanced analytics tools are transforming how corporate treasures interact with their banks, especially in Europe.
Real-time visibility
The collaboration between banks and fintechs is yielding significant benefits for corporate treasury departments. One major advantage is improved real-time visibility into liquidity positions. Advanced analytics tools can provide treasurers with comprehensive overviews of cash flows, investment plans, and repayment schedules in real-time.
Enhanced forecasting
Enhanced forecasting capabilities are another key benefit. AI-powered tools can analyse historical data and market trends to produce more accurate cash flow predictions, enabling treasurers to make more informed decisions about investments and financing.
Standardised best practice
If you have 20 different banks and they all need different instructions as to how they are receiving file instructions, standardised file formatting takes out all the manual work involved in reconciling data.
Automating routine tasks
Automation is also playing a crucial role in improving treasury efficiency. By automating routine tasks such as reconciliations and report generation, treasury staff can focus on more strategic activities. This shift aligns with the evolving role of treasury departments as key contributors to business strategy.
Open banking and APIs
Europe has so far been ahead of America when it comes to opening up bank data to third parties, so called “open banking”. The use of application programming interfaces (APIs) between fintechs and banks have revolutionised instant payments in Europe, compared to America, where some banks still use cheques. That is changing in the US though.
Q&A with Gareth Wilson, Head of UK Banking & Capital Markets, Capgemini
FinChief: Why is treasury becoming increasingly important?
Wilson: A recent CapGemini report of 600 C-suite executives found that they were most focused on how they managed cash flow and liquidity. The treasury function is increasingly important. And I marvel at the speed of change at which treasury is evolving, especially as banks adapt to corporate treasurer needs.
FinChief: What does that mean when it comes to a treasurer’s relationship with their bank?
Wilson: Treasurers aren’t just handling cash in the short term, they’re balancing the cash across the whole business, and being able to rely on your bank is crucial. Resilience is a word we use increasingly regularly. I view treasury as a bank within a bank in terms of managing assets, it’s clear that the role of treasury is only amplifying.
FinChief: How has open banking and APIs changed how treasurers interact with banks?
Wilson: Open banking and APIs have exponentially increased the level of data and information that is available to the treasury function. Like the Chinese ideogram, this is both a challenge and an opportunity. We talk about data risk but we never talk about data opportunity. If you have more data that you can interrogate on a deeper level, that helps your financial forecasting, putting you in a better position going forward.
FinChief: How is technology going to evolve when it comes to treasury?
Wilson: The question is, how can you use technology to let the treasury function become more agile and more accurate in terms of planning and going forward? Technological advancement, leveraging data, analytics, generative AI, will only accelerate the function of treasurer.
To read the full story in the magazine click HERE
Explore the latest edition of FinTech Magazine and be part of the conversation at our global conference series, FinTech LIVE.
Discover all our upcoming events and secure your tickets today.
FinTech Magazine is a BizClik brand
