Those responses, argue Amit Kahana, Senior VP of Credit and Cash Management at Pleo, the business spending and cash management platform, and David McHenry, Head of Treasury & Trade Solutions at HSBC Innovation Banking UK, reveal that many businesses are not maximising the benefits of their treasury function or treasury’s role across cash flow, risk management and strategic planning in a gap that is causing uncomfortable and preventable ripples across the business.
“Today’s treasurers face a rapidly evolving and complex landscape, driven in part by innovation in the banking sector and advancing technology. From mitigating security and counterparty risk to enhancing operational efficiency, the treasury function is in the midst of a major transition,” says McHenry.
He argues that although the treasury function must evolve, evolution is less about buying fancy new tools and more about building a culture where innovation becomes part of your team’s DNA. A cultural treasury transformation in this way transforms treasury into an active force, not a passive function, that shapes how a business makes smarter decisions about liquidity, risk and growth.
Start by solving problems
A successful treasury transformation starts with the problems, not the solutions. To avoid getting starry-eyed about new technology, the first step treasury should take is a hard look at where the treasury function actually struggles, McHenry and Kahana advise.
That means being able to pin-point the time-intensive manual processes that are occupying the team; understand visibility blind spots and the decisions they are struggling to make because they lack the right contextual data. “A shiny new tool that doesn’t solve a genuine pain point isn’t innovation – it’s just an expensive distraction with good marketing. If you are to truly innovate, you need tools that can perform wonders with mindsets, not just datasets,” says McHenry.
Collaboration is also key. Historically, treasury teams have tended to operate in their own bubble – something that made sense back when the role was mostly transactional. But times have changed. Evolution means “transforming from being reactive cash managers into strategic, proactive business managers that drive better liquidity and risk management, business automation, cost efficiency and investment decisions,” explains McHenry.
Moreover, that kind of transformation doesn’t happen in isolation. Finance leaders need to actively pull treasury into the bigger strategic conversations happening across the business. For example, when a sales team win a new deal, treasury should be there talking through working capital implications. If the company is planning an expansion, treasury’s perspective on cash positioning and currency risk should be part of the conversation from day one.
Collaboration creates faster more useful feedback loops too. When treasury rolls out a new forecasting model or adjusts how it handles counterparty risk, the teams touched by those changes can also share what’s working and what needs tweaking. “This advanced level of collaboration is a crucial step towards unlocking transformative treasury. Because innovation without feedback is just throwing ideas at a wall and hoping something sticks,” says Kahana.
But in a Catch-22, although treasury requires innovation to evolve, innovation also introduces new risks. That’s why it’s crucial to make risk management a core part of how treasury innovates, they continue. “This means doing your homework before implementing new systems – building with safety nets and stress-testing what could happen if things go wrong,” says Kahana. “Most importantly, it means never losing sight of the fundamental purpose of the treasury function: to protect the business. If an innovation compromises security or creates even more friction, then it’s not the right move.”
What gets measured gets managed
The duo also argues that establishing clear metrics for success remains one of the most important parts of innovation – and can deliver huge benefits to the treasury function. But they conclude with a reminder to always quantify the problem treasury is trying to solve. If manual reconciliation is the issue, calculate the hours spent and error rates. If poor cash visibility is holding treasury back, document decision delays and missed opportunities.
“These numbers help you secure the resources you need and prove whether your solution delivered on its promise. Did automation cut reconciliation time by 60%? Has better forecasting improved cash utilisation by 15%? These measurements don’t just validate past decisions. They build momentum for whatever improvement comes next and are crucial in getting investment from the business (monetary and otherwise),” concludes McHenry.
