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 20<strong>23</strong> e-FOREX
NOVEMBER 20<strong>23</strong> e-FOREX 65