Insight & Analysis

Disruptive influences: the power behind real treasury innovation (part one)

Published: Jul 2019

Disruptive technology is the order of the day for treasurers. At this year’s annual ACT conference, Paul Higdon, Chief Product Officer at ION Treasury, homed in on the prime candidates in the race to disrupt and be disrupted.

A few decades ago, the idea that we could be continually connected to people and information in almost any location would have been a near-sci-fi dream. It’s now a fact and, for better or worse, over the next decade, the curve of progress in this direction will steepen dramatically.

As that curve continues its upward trend, treasurers will need to step up a gear or two if advantage is to be taken of the disruptive technologies that are arising out of the digital revolution.

Processing power and the data explosion

At the heart of this new age phenomenon is the immense leap forward made in computer processing power, notes Paul Higdon, Chief Product Officer at ION Treasury. As each new supercomputer is launched, it’s only a matter of time before it is consigned to the history books.

The pioneering 244Mhz Cray-2 has been superseded several times over. With the doubling of processing power every couple of years (according to Moore’s Law), even the pocket-sized iPhone X has ten times the clock-speed of Cray-2 (and for a fraction of the cost).

Today’s supercomputing winner is Summit, which taps the power of deep-learning algorithms, processing at a rate of a billion billion operations per second (that’s an ‘exaflop’ in supercomputing circles).

“There is no need to worry about performing processor-intensive calculations anymore,” says Higdon. “In treasury, we should readily embrace ideas such as Value-at-Risk and advanced analytics; they can now run in almost real-time, allowing us to focus on delivering insight that we can act upon instantly.”

Another key part of the digital story is increased internet access. Just 20 years ago, around 0.4% of the world had access to the internet. By April 2019, 56.1% of the world’s population had internet access, and 81% of the developed world. “A lot of work has been done in the past couple of years to facilitate how businesses can use the internet,” notes Higdon.

This creates an additional vital strand: the data explosion. With the hosting of software applications shifting largely to cloud and increasing adoption rates of APIs enabling ever more applications to communicate across the internet, the volume of data being generated and exchanged is on an exponential upward curve.

The amount created just last year was enough to fill 660 billion Blue-ray discs or 330 million of the world’s current largest storage devices. Amidst this torrent, the challenge for treasurers is to figure out which data is relevant, and how it can be turned into actionable information.

“There is no way we, as humans, will be able to process the amount of raw data that will be flowing into treasury,” comments Higdon. “We need to focus on data and cognitive sciences, and the building of teams within our treasuries that are equipped to tell us how to view, make sense of, and act upon this data.”

Power of APIs

Many treasuries have moved beyond manual keying and processing towards straight through processing, where file-based integration allows for scheduled exchanges of data in pre-defined formats. We are now moving to a new era of connectivity that leverages APIs, notes Higdon.

APIs are the means by which one software application talks directly to another. Every app on a smart phone uses APIs to exchange data. Their individual power lies in the ability of third-party applications to connect through them.

Citymapper is a navigational tool that uses APIs to connect to multiple third-party sources of data, published online by the likes of taxi, train and bus companies, restaurants and places of entertainment. By aggregating and presenting multiple sources of related data in one place, Citymapper adds value for its users. “We need to start thinking about treasury in the same way, to enhance our performance and improve our decision-making,” says Higdon.

The open banking initiative has been a driver for API adoption in the financial space. Many banks have delivered their first iteration of APIs, allowing real-time access to bank balances. With cash visibility consistently the number one challenge for treasurers, this is good news. “Only when APIs are available for all banks will we truly see a solution for real-time cash visibility on a global basis,” states Higdon.

Being able to see group-wide cash positions at the click of a button has treasury appeal. Combining it with real-time transaction feeds and automated reconciliations to give real-time alerts creates the potential for cash management to become a real-time exception management process rather than a batch-processed affair.

Banks have also been working on payment-related APIs, with a number of institutions allowing API-enabled payment initiation. SWIFT’s gpi enhances this space considerably, offering real-time tracking of payment status right through to the beneficiary. When gpi for corporates rolls out fully, treasurers will have full oversight of cash flows, with all the positive effects this will have on areas such as working capital management.

Market data APIs have been published too. Traditional methods of collecting market data for revaluation require specific codes to be mapped for specific points, and files to be downloaded from the provider before being uploaded into the ERP. API connectivity removes all reliance on batch processing because rates are available on-demand.

But these are all effectively point solutions. The next step, says Higdon, is for the Fintech community, and even the banks, to build Citymapper-type platforms for treasurers. By leveraging APIs and becoming more creative with their applications, finding new ways of adding value to the connected information for treasurers is now the goal, he says.


The power of mobile is clear. Although the first iPhone only arrived in 2008, and the iPad just a couple of years later, work-related mobile devices, even wearable technology, are now the norm. The trend for mobile, and the desire to transact in this format, shows no signs of slowing down, says Higdon. “The only certainty is that we don’t know what devices we will be using in the next decade or two.”

This presents an interesting conundrum for businesses. “It is key for treasury, as people move towards consuming more business applications on these devices, to look for applications that can adapt themselves not only to work well on devices that we have today, but also be built in a way that they can run effectively on devices that haven’t even been conceived yet.”

This is a task to which vendors, banks and businesses will need to pay heed as all are driven ever harder by the digital wants and needs of customers. The recent emergence of Libra, Facebook’s blockchain-based payment rails and global digital coinage, is proof that this space keeps pushing the boundaries.

User experience

A pressing matter for technology providers, especially for (but not limited to) mobile devices, is the user interface (UI) and user-experience (UX). It is essential that for any new technology, the user is able to intuitively work with it. “Radical changes have been made in the last ten years, with many applications used in our private lives leading the way,” notes Higdon.

UI/UX can make-or-break and application, yet it need not, he says. Today, user-centric design modelling seeks to understand end-user needs and goals. This is augmented by ‘responsive design’ approaches, enabling single applications to run optimally on multiple devices (phone, tablet or desktop).

From this stems the idea of ‘mobile-first’ design, as opposed to ‘desktop-first’ design. The former designs and builds from the ground up, incorporating an understanding of user-needs. In testing, UI/UX are incrementally improved, often in line with increases in software real-estate that allow more to be done with the application. Typically, agile development is deployed, creating rapid iterations based on short feedback cycles (sometimes just a couple of weeks) that are re-run until objectives are fully met.

Its opposite, desktop-first design, attempts to shoe-horn the original desktop look, feel and functionality into a mobile space. “The results are typically inferior when taking a desktop-first design approach for mobile,” comments Higdon. “But mobile-first is expensive because it involves end-user interaction and takes time to re-think how users will interact with the software now and in the future.”

The advent of powerful systems, and easier means of connectivity has seen a data explosion that is being managed through powerful sifting tools and presented to users, how and when they want. Being permanently connected is both a benefit and curse and so professionals will need to manage their interactions with technology so much more judiciously. Automation is increasingly used to take up the strain but the true innovation in this space is only just starting.

Next week, we look artificial intelligence in treasury.

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