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Technology and innovation: redefining the rules of treasury

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Foreword

Seizing the digital advantage

Technology is changing the way we live, the way we communicate, and the way we do business. In fact, technological innovation is changing the world as we know it and at an extremely rapid pace. Year-on-year growth in the 12 months from January 2014 saw the world population increase by 1.6%, yet over the same period, the number of active internet users soared by 21%, whilst social media accounts accessed by mobile devices increased by 23%1.

For companies in all sectors, the impact of this increasingly digital operating environment is both significant and exciting. And it’s not just about embracing mobile payments and collections, or further automating day-to-day treasury tasks – the impact runs much deeper. Take trade, for instance; the very nature of supply chains is changing as a result of technology and innovation.

As an example, 3D printing is on the cusp of becoming a disruptive and potentially transformative technology, notably in the manufacturing space. Historically, supply chains have revolved around logistics – often moving goods half way round the world – and warehousing. Today, manufacturers can use 3D printers wherever they choose, rather than being tied to low-cost manufacturing locations in the emerging markets.

This could change the global supply chain quite dramatically and forward-thinking businesses are already reviewing their supply chains with a view to re-shoring. With manufacturers able to print certain components on demand, inventory levels and warehousing requirements should also be able to be reduced. Given these cost efficiency opportunities, developments such as 3D printing could also significantly alter corporates’ working capital and supply chain finance (SCF) requirements.

Elsewhere, the buyer-seller relationship is steadily evolving, with cloud technology providing new collaborative opportunities. These range from creating and managing extensive networks of supplier relationships more effectively via a shared cloud portal, to sharing data as a means to improve processes such as stock control, inventory management, forecasting and replenishment – and secure pricing and working capital benefits.

So, with digital innovation and evolution comes significant opportunity. But there are also associated operational, reputational and financial risks which corporates must plan for too – whether that be cybersecurity or the risk of losing competitive advantage by continuing to use outdated technology.

Barclays recognises this and is at the forefront of the ongoing journey of innovation and development. This supplement provides an overview of some of the latest trends and innovations in the treasury space, and outlines how we can work with companies to make the most of the digital opportunities available, whilst managing related risks along the journey. We look forward to the exciting times ahead!