Unleash your treasury’s full potential by harnessing the power of data-driven insights

Published: Sep 2018

Data has the power to transform the role of the modern treasury by providing actionable insights that not only allow treasurers to better manage their own functions, policies and teams; but also facilitate a more strategic engagement within their organisations, bringing teams together and helping companies succeed. Experts from Citi explain how you can get started.

Peter Cunningham

Consumer & Healthcare Sales Head for EMEA, Treasury and Trade Solutions, Citi

Magdalena Mielcarz

Channel & Enterprise Services Head for EMEA, Treasury and Trade Solutions, Citi

“I never guess. It is a capital mistake to theorise before one has data,” said Sir Arthur Conan Doyle’s fictional detective Sherlock Holmes. It’s hard to argue the validity of this comment. Yet in business, most decision-making happens without the support of data – or at least complete data. In fact, research from PwC shows that two-thirds of companies say their own companies’ decision-making is only somewhat or rarely data-driven. This leaves businesses making important decisions largely on gut feeling and intuition.

This isn’t always a problem. Gut feeling and intuition are the foundation of many successful businesses. Take Apple, for example. Steve Jobs often made decisions without first consulting fact-based data. By luck or judgement, many of his decisions were successful.

It doesn’t always work this way, however. Ignoring the facts can lead to mistakes and less than optimal outcomes. Indeed, there are many examples of businesses failing due to executives disregarding facts.

Either way, failure to use data is costing businesses money. IBM suggests that poor data costs US businesses and government US$3.1trn a year. Meanwhile, Forrester Research says a Fortune 1000 company can achieve US$65m in additional net income with a 10% increase in data accessibility.

It is about more than money, however. In a globalised and competitive marketplace, margin pressure is increasing. One bad decision can have catastrophic costs. So it’s risky to depend on instinct alone.

The good news: today businesses don’t have to rely on instinct. The gradual digitisation of companies and the arrival of new technology is allowing them to use data like never before. By doing so, businesses can arm themselves with the facts and make informed decisions to ensure long-term commercial success.

Agents of change

While data is impacting all aspects of the organisation, it’s particularly important for the treasury. This is because treasury teams are no longer just a custodian of the company’s cash; they are strategic partners and agents of change. This new role requires treasurers to pinpoint problems across the organisation, quantify the value of solving these, and then use these insights to become a centre of innovation within the organisation.

The only way to do this is by harnessing and analysing data. Peter Cunningham, Consumer & Healthcare Sales Head for EMEA in Citi’s Treasury and Trade Solutions, says that treasury sits at the heart of all commercial flows within an organisation. “All these flows carry data,” he explains. “And by using this data, treasury can build a unique view of the workings of the enterprise. This puts treasury in a privileged position to innovate and be a catalyst for change.”

Cunningham is not just talking about innovating within the walls of the treasury department. “This data provides insights that impact all areas of the business,” he says. “Armed with these insights, treasury can break down operational silos by helping other departments meet their KPIs. The value this creates for the enterprise is transformational.”

Setting objectives

Of course, treasury cannot conjure insights from data out of thin air. Collating, structuring, interpreting and analysing the data requires work – and can be difficult, given the volume of data companies create. Indeed, the same amount of data is created every two days as was created from the beginning of time up to 2003. Just knowing where to start on a data-driven initiative can seem an impossible challenge.

So, what should treasurers be doing? Magdalena Mielcarz, Channel & Enterprise Services Head for EMEA, Treasury and Trade Solutions at Citi, says treasurers must first define a set of focused objectives and support a ‘fail fast to innovate faster’ philosophy to assess the real world application of these objectives. “Data isn’t a panacea,” she comments. “It’s a tool which is only effective when used correctly. Also, defining objectives enables treasury to focus on a finite data set. This makes the project less daunting and should enable treasury to deliver value faster.”

In fact, the importance of using data to solve a genuine business problem, and not just for data’s sake, cannot be emphasised enough. Research from NewVantage Partners shows that while most companies are attempting to be ‘data-driven’, only 37% of companies are successful in meeting their goals. The key reason: executives lack clarity around the project’s objectives. When this occurs, a business can become overwhelmed by the data and lose track of its goals.

Getting and structuring data

With the objectives defined, treasury must consider how to obtain and structure the data. “All companies will have this data sitting somewhere in the business,” says Cunningham. “The challenge is that often this data is in disparate systems. This makes it challenging for treasury to collate all the data it needs.”

The solution to this is pooling all the data into a single instance of a TMS or ERP. However, Cunningham recognises that this is not an easy exercise, especially in a multinational corporation. It will also only provide half the picture. He therefore suggests that treasurers speak to their banks. “We are custodians of so much data,” says Cunningham. “And it is likely that the data a client needs is within our systems.”

In recognition of this, Cunningham explains that Citi has been working hard to structure its data to make it useful for clients. This work enables the bank to provide insights it couldn’t before. For example, Citi can show a client the dormant or duplicate accounts it has. “This is useful information because these accounts can be closed to save costs and mitigate risk,” he says.

Thanks to its global footprint, Citi can offer insights that couldn’t be found using proprietary data alone. For example, the bank can compare how one client pays a particular supplier vis-à-vis other clients that pay the same supplier. “This helps the client understand how that supplier likes to receive payment and if there are any more cost effective or efficient ways they can be paid,” says Cunningham. “We can use similar data to find out if there are opportunities to extend payment terms or offer supplier financing.”

Citi is also using data to help treasury plan for the future. For example, Cunningham says the bank is working with clients around various Brexit scenarios. “We can show our customers the impact various Brexit scenarios will have on their cash management structure,” he says. “This is invaluable information, especially around something as complex as Brexit.”

Cultural shift

Becoming a data-driven organisation isn’t only an exercise in technology – it also requires a cultural shift. “Business leaders must promote innovation from the top down,” says Mielcarz. “This empowers individuals to use the insights derived from data to drive change. And businesses cannot be slow in doing this. Those that will be most successful will act nimbly and take advantage of opportunities when they arise.”

Treasury itself must also evolve. Most crucially, it must be able to understand and analyse the data it has. “Data science skills will become increasingly important to the treasury,” says Cunningham. “But it is not enough to understand and analyse the data. For treasury to truly to be at the centre of the organisation, it must use the insights it has to break down silos and promote new ways of working. As a result, soft skills will come to the fore and be crucial in the years to come.”


The use of data will also be decisive if treasury is to reach the holy grail of complete straight through processing. And banks like Citi are already building tools that leverage AI and robotics that promote this. “For example, we have built a Payment Outlier Detection Service,” says Mielcarz. “This uses data and AI to analyse the flows through our system. It then compares this to historical client data. If anything doesn’t conform to the routine patterns and behaviours, it triggers a real-time alert. This provides a layer of protection against cyber-fraud. It also removes the need for treasury to eyeball every payment, leaving them to only deal with the exceptions that follow criteria defined by the client.”

These technologies, combined with the emergence of APIs as a new connectivity channel, will change the relationship between banks and corporates. “These technologies will allow us to be more proactive in advising our clients,” says Mielcarz. “For example, when there is news about a client moving into a new market, we can send the treasury team information about that market before they have even asked us for it. This is revolutionary and enhances the value we can provide.”

Data is king

Finally, a caveat. For all the excitement around data, we must remember that data is not infallible. Data will sometimes suggest non-optimal solutions or solutions that may not meet future needs. Only a skilled treasury professional can recognise this.

It is therefore the treasury teams that utilise data to the fullest advantage that will have the real transformational power. “Treasury used to say cash is king,” says Mielcarz. “This is true no more. Cash has abdicated and data is the new king.”

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