Treasury Digitization - Market Perspectives

6 Treasury and Trade Solutions Figure 3: Expected Impact of Digitization on Treasury Functions within 3–5 Years Material Impact Cash Management Payments Cash Forecasting and Planning Settlement and Accounting Treasury Controls and Reconciliation Cash Management: Collections Cash Operations and Liquidity Management Financial Risk Management Short-term Borrowing and Financing: Intercompany Corporate Finance and Capital Markets Counterparty Risk Management Short-term Borrowing and Financing: Third-party 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Investing Moderate Impact Negligible/No Impact Number of Respondents: 85+ The expectations of material impact to functions such as cash management and forecasting could be on account of the disruptive influences of instant payment schemes and growing adoption of APIs. However, these areas may also be considered a digitization priority as they are closely connected with the enterprise growth strategy and cost efficiency objectives. Automation of Manual Repetitive Processes RPA technology can be used to emulate repetitive human actions via existing user interfaces, improving productivity, driving down costs and facilitating scalability. Treasury and finance staff can be redeployed from data input, collection and consolidation tasks to focus on value-added activities such as the interpretation of data to inform decisions. Figure 4 shows that there are several use cases of RPA being evaluated or pursued by survey respondents. The most prevalent use case of RPA is payment processing, where robots (or digital assistants) can be used to augment human capacity through the automation of manual activities such as logging-in to systems, reading invoice images, performing validations and posting, thereby enabling human focus on the more complex value add tasks. Another common use case of RPA is facilitating cash visibility, to automate the retrieval of statements from bank portals and aggregate these to arrive at a cash position. This is particularly relevant to organizations that lack treasury management systems, or where treasury and banking systems are not fully integrated. There are clear benefits to be derived from process automation. However, before implementing RPA, it is essential for treasury and finance teams to have a detailed understanding of the processes to be automated and identify the potential for exception-handling in processes that involve human reasoning. Where processes are poorly designed, automation can magnify problems and operational efficiency benefits are likely to be limited or non-existent. It is also important to have a clear strategy that reflects treasury’s present needs and potential use cases across different functional areas when selecting RPA solution providers. Adoption of Interfaces to Accelerate Core Processes APIs enable treasury teams to access banking information and activity either in real-time or on demand through their preferred applications or software. APIs are becoming increasingly relevant as payment systems transition to a real- time 24/7 environment, necessitating more timely banking information, dynamic cash forecasting and greater agility in transaction execution. In particular, the rapid growth of instant payment schemes, particularly across Asia Pacific and Europe, is driving growth in the use of API technology. Usage on Citi’s API connectivity platform has grown more than 780% in the last year, totaling 386 million API calls in 2019.