Technology

Digital treasury

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Moving to a digital treasury should not represent new cost, but instead demonstrate savings or additional value and ideally both. We have all heard a lot recently about robotics, artificial intelligence (AI), APIs, big data, open banking and blockchain, not to mention the emergence of fintech; but what does this all mean for you?

 

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Jan Dirk van Beusekom, Head of Strategic Marketing, BNP Paribas Cash Management
Jan Dirk van Beusekom
Head of Strategic Marketing, BNP Paribas Cash Management

BNP Paribas

 

 

 

In a recent webinar, Jan Dirk van Beusekom, Head of Strategic Marketing at the Cash Management Competence Centre of BNP Paribas Group explained and discussed how treasury should aim to remove complexity, improve transparency and control, and free up resources to ‘do more with less’ as part of a digital treasury agenda.

Van Beusekom set the scene with responses to a question in an EACT survey conducted in March (see chart below) which identifies digitalisation of treasury as the most important trend impacting treasury strategy in the coming years.

“Very often digitalisation and digitisation are terms used to describe the same thing without knowing the difference,” suggested van Beusekom.

Digitisation involves converting non-digital, analogue material to a digital format, for example, keeping digital records of account balances rather than paper-based records. Digitalisation is about transitioning your business to a digital business. This is why digitalisation is sometimes referred to as digital transformation. You achieve this using digital technologies, so digitisation is a part of digitalisation. It is only a part of it, though. This is because digitalisation involves changing or adapting your business model, not just digitising your data, processes and actions.

In response to these results he expressed surprise at the lower rankings of certain elements which enable digital treasury transformation such as data analytics, fintechs, blockchain and crypto-currencies. “My explanation would be that data analytics are already playing their enabling role, fintechs have so far disrupted mainly financial institutions and blockchain and cryptocurrencies are not yet mature enough to have an impact on strategy in the short term” he said. “Blockchain is used for smart contracts, mainly trade finance, but also to create a trusted server for KYC documentation that can be accessed by different branches of the same bank.”

Which trends will most impact your treasury strategy in the coming years?

Which trends will most impact your treasury strategy in the coming years?

Source: BNP Paribas

Digital treasury is the trend most impacting on treasury strategy in the coming years. The role of the CFO and treasurer is changing and is becoming even more forward looking. It is not only operational efficiency that is important, therefore, but also the ability to perform sophisticated analytics to enhance strategic decision-making. Digitalisation has a major role in achieving this by leveraging machine power to carry out tasks with greater speed and volumes of data than humans could do. Improving the cash conversion cycle, accounts receivable, funding and investment and cash flow forecasting all fall under the spotlight as areas of opportunity for a digital transformation.

“Other processes such as KYC, mandate and signature management and compliance and regulations can also be added to that list,” he commented. BNP Paribas worked with one of its clients to tackle KYC via an electronic signature solution called Docusign. They have also recently announced a partnership with Cashforce to offer an integrated cash forecasting and working capital management solution.

“Treasury should aim to remove complexity, improve transparency and control and free up resources to ‘do more with less’ as part of its digital agenda,” concluded van Beusekom.

Did this webinar change your willingness to take your treasury through a digital transformation?

55.1% – YES
44.9% – NO

For further information on BNP Paribas’ Journeys to Treasury, please visit journeystotreasury.com

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