From fax machines to cloud solutions, what’s next for cash management technology?

Published: Sep 2021

Cash management technology has an increasingly important role to play as treasurers look for ways to free up time and manage risk more effectively. James Capps and Tricia Turner of BlackRock explain the value they see in technology in today’s market and share their thoughts on how this space could develop in the years ahead.

Cloud technology concept

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We are guided by the conviction that investors need clarity at every point in the investment process in order to make more informed decisions and achieve better outcomes. Cash management technology plays a critical role in helping treasurers manage their cash investments effectively and at scale. It is also an area that is developing rapidly for several reasons, including the growing focus on remote working and the rise of emerging technologies such as blockchain.

“Today is a very complex and dynamic time in the technology space,” says Ja verymes Capps, Managing Director, Head of Cash Technology at BlackRock. “We’re seeing some real growth in APIs1 and integration, as firms are starting to realise the value of bringing multiple technologies together. And using the best-in-breed systems for various functions is really adding value across the [cash management technology] ecosystem.”

For firms like BlackRock, this means embracing the cloud and exploring the capabilities of highly scalable and sustainable systems that can meet clients’ expectations. “And even more critically, we’re seeing a desire for clients to be able to manage their entire portfolio in one location,” Capps adds, highlighting the need for integrated technologies to provide a more seamless user experience.

Solving today’s treasury challenges

For corporate treasurers, the current environment presents significant challenges, says Tricia Turner, Head of Relationship Management for Cachematrix by BlackRock. “I think the two biggest challenges are finding enough time, and managing operational and investment risk effectively,” she notes. “Treasurers have such wide-ranging responsibilities, from financing corporate debt to managing investments.”

Against this backdrop, she sees technology becoming an essential tool for treasury teams to help manage these challenges, with portals like BlackRock’s Cachematrix providing a one-stop shop for the management of the investment, and reporting process.

Streamlining processes to save valuable time is an increasingly important feature of cash management portals. “Portals like ours [seek to] provide clear, efficient, and reliable data that enable treasury teams to make informed investment decisions quickly, rather than working through a multitude of spreadsheets on a daily basis,” says Turner.

In addition, an effective cash management solution can enable the faster sharing of information by loading historical information such as trade confirmations and monthly statements. “Other solutions provided to our clients include straight-through processing via auto-settlement and full integration to treasury management systems of choice, so that more time can be spent on critical tasks – and less time on rekeying data,” Turner explains.

Anticipating the future of cash management technology

How will cash management technology evolve going forward? Alongside the continuation of current trends, such as challenges around managing time and risk, Capps says that higher levels of automation will mean there is less need for manual intervention. “I also think we’ll start to see more focus on things like blockchain to increase trust in some of these transactions – the space cannot be ignored,” he says. “And we should take note of developments in the mobile space as people increasingly look to manage their work from remote locations, and not necessarily in front of a computer.”

Where Cachematrix is concerned, future developments include the forthcoming launch of a new mobile app. “There’s been so much demand from our client base for that – not because people want to do money market fund trades on the beach, but because people want to be able to keep track of their trades and approve them on their mobile, both while working from home and when moving between meeting rooms [in the office],” says Turner. Likewise, she says clients are increasingly looking for features such as notifications to alert them when a trade needs to be approved.

Turner also adds that she believes ESG reporting and monitoring will continue to attract more focus in the coming years. “It’s another key trend that we expect to continue working on with our clients going into the future,” she concludes.

Cash management technology in practice

Melinda Olah, Cash Management Supervisor at Guardian Media Group, says that cash management is a key component of business growth for the UK-headquartered news organisation.

As such, having the right technology in place is an important element of the company’s cash management strategy. This includes using Cachematrix by BlackRock to manage orders for the company’s money market funds.

“When I log into Cachematrix, I see all the details of my money market funds, which is extremely useful because I don’t have to log into each of them to see the balances, movements or interest,” Olah explains. “It’s then straightforward to top up or redeem from the funds as needed.”

Olah also finds the portfolio balance information available on Cachematrix by BlackRock useful for weekly and monthly cash flow forecasting. Also valuable is the ability to generate transaction history reports for each fund, which can then be used to support the balance sheet reconciliation process at the end of the month.

Thanks to James Capps, Tricia Turner and Melinda Olah for sharing their views. Tune in to the accompanying podcast to learn more.

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  1. APIs stands for application programming interfaces.

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