e-Forex-Nov-23

SPECIAL REPORT
Corporate treasury automation: How technology is solving pressing needs
“We are convinced that the FX portal used by clients will
begin to morph into a “Whole of Treasury” decision support
framework with multi-product execution capabilities.”
Niels van Daatselaar
for you to start doing stuff, first the
small wins and then increasing the
bets,” he says. He points to Nordea’s
integration abilities as an example of
reliability.
“Even if our guiding principle is to
use modern technical standards,
we acknowledge the fact that the
old legacy technologies are still
ubiquitous,” he says. “For example,
the most critical requirement for
any solution is that it is easy to
integrate into an Excel spreadsheet
that is still the backbone of all the
corporates.”
“Even if the solutions would skip
Excel altogether, the first step is to
make sure the customer can try out
the new solution without abandoning
the good old Excel spreadsheet. And
of course, there are plenty of other
old standards that are almost equally
relevant for quite some time, like
XML, FTP, etc.”
THE IMPACT OF NEW
TECHNOLOGY
AI, DLT, blockchain. Technology
is evolving rapidly, and FX has
already witnessed the entry of
these examples of advanced tech in
different applications. Blockchain and
DLT solutions are increasing in the
cross-border payment and settlement
niches, while AI is leaving a mark in
analytics and algo-based execution.
van Daatselaar believes AI will soon
spread to treasury management.
“Artificial intelligence will have a
tremendous impact on the way
Treasuries operate in the future,”
he says. “The ability of this
technology to identify drivers of
successful outcomes and amplify the
redistribution of learnings across the
Corporate Treasury community cannot
be understated.”
He also notes the human impact
of this development. “Professionals
used to take months or years to earn
their stripes working within junior
roles, building up a knowledge base
that justified a promotion or transfer.
Shortly, this career development
model will turn on its head.”
Stark echoes van Daatselaar’s views
on AI. “APIs and AI will have a greater
impact on treasury digitisation than
blockchain and DLT, as the biggest
opportunity for treasury teams is to
leverage data to make more efficient
and intelligent FX risk decisions,” he
says.
Does this mean blockchain won’t
have any impact? “Blockchain
will support greater transparency
for trading and settlement of FX
transactions,” Stark responds, “yet
the greater benefit for treasury teams
will be to make more data-driven
decisions around how to protect cash
flow and earnings - a responsibility
which artificial intelligence is perfectly
suited for.”
When asked about the impact
blockchain and DLT will have on
treasuries, van Daatselaar notes his
excitement about CBDCs and their
impact on settlements.
“CDBCs will power the broader
adoption of Blockchain across banking
infrastructure,” he says, “tokenization
will democratise access to unlisted
assets, and debt collateral will be
eventually managed across borders
without the need to participate in
traditional FX trades.”
“We can expect the concept of STP
to evolve from today’s automated file
updates,” he continues, “to an atomic
settlement of cross-border capital
flows visible in real-time on a bank’s
digital front end.”
FOCUS ON THE BASICS FIRST
While he’s excited about new tech
development, Honkanen cautions
that firms must get the basics right
first. “I think 99% of the discussion
about new technologies has no
relevance for treasuries,” he says.
“You should focus on automating the
boring daily stuff with pretty boring
technological solutions. If you don’t do
that and start small, there will not be
any new big technology that will save
you and take you to a new level. The
most successful treasuries are those who
focus on getting things done, not the
ones who ignore relevant problems.”
No matter where a firm’s corporate
treasury workflow lies, technology
can introduce more efficiency. A firm’s
technological focus depends on its
current position, something Honkanen,
Stark, and van Daatselaar believe
treasurers should rigourously examine.
Ultimately, the results of that
examination determine whether
advanced tech can solve their pressing
issues.
64 NOVEMBER 2023 e-FOREX