e-Forex-Nov-23

SPECIAL REPORT
Treasury automation has consistently
been a hot topic since the COVID-19
pandemic hit. Institutions embraced
a wave of electronification in several
areas, and treasury processes were
no exception. However, corporate
treasurers soon ran into a ceiling.
While automating internal processes
was straightforward, overall cash
management efficiency depended
on other departments in their
organisations embracing automation.
For instance, while firms can automate
cash projection, the process depends
on collection efficiency, a largely
manual task.
With volatility increasing worldwide,
treasurers need automation more than
ever, something Bob Stark, Global
Head of Strategy at Kyriba, notes.
“Corporate treasurers are focused
on reducing the impact of currency
volatility on their balance sheets,
income statements, and cash flow,”
he says.
“With FX volatility remaining
stubbornly high, treasury teams
must maximise the impact of natural
hedging while reducing the cost
of derivative hedging programs to
meet increased resilience to currency
markets and improve the effectiveness
of their FX program.”
These factors have pushed the
automation wave further, with service
providers rising to fill corporate
treasury needs.
HOW AUTOMATION HELPS
Matti Honkanen, Head of Next Gen FX
at Nordea, says that time is a constant
stumbling block for treasurers.
“According to our survey of corporate
treasurers, there is a big mismatch
between where the treasurers use
time and where they would like to. As
a rule, treasurers would like to play a
more strategic role.”
“That is not possible if they don’t free
up time from the time-consuming stuff
that they are primarily responsible for
and that is possible to automate with
the e-FX technology,” he continues.
“Another driver (of automation) is
the need to do liquidity and risk
management more frequently and
accurately, which is very tough with
a manual process. There are plenty of
technological solutions that can help
with this.”
When asked what drives
electronification in treasury processes
right now, Niels van Daatselaar, Cofounder
and CEO of TreasurUp, points
to the banks. “The reality is that
banks are the primary investors in the
technology required to increase the
levels of digitization or automation
available to corporations to deploy
within their operating environment,”
he says. “Where there is the scale to
justify it, Corporate Treasurers are more
inclined to invest in straight-through
processing of workflows between
their TMS or ERP platforms and the
transaction solutions delivered by the
banks.”
Like Honkanen, he explains that
treasurers have plenty of options to
choose from. There is no doubt that
automation delivers benefits. But, in
which areas does it specifically help
treasurers?
Stark says, “Streamlining extraction
and structuring of exposure data
from the ERP, integrating online trade
portals with the treasury management
system, and automating the
designation, valuation and accounting
for hedges. Automation not only
improves productivity but also delivers
accuracy in an area where compliance
is paramount.”
van Daatselaar dives deeper into the
data-driven advantages. “Storing
more contextual data around the cash
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