15-09-2022 | Cobase | treasuryXL | LinkedIn |

Treasury teams have had to adjust rapidly to remote working conditions as a result of measures introduced to combat the spread of Covid. To facilitate these new working conditions, treasurers have accelerated their digital transformation efforts through the use of machine learning and artificial intelligence, APIs and cloud technology, and process automation.

Skills such as system integration, business development, data analytics and programming are increasingly valuable, while skills that can be automated are declining in importance.

Treasury teams may not require coding skills, but to maintain relevance they must become a centre of excellence, demonstrate expertise in how new systems work, and integrate with other systems and processes. Treasurers also need to be more proactive in terms of setting their organisation’s strategy and plans for digital transformation.

A simple implementation process that can be completed in days rather than months is seen as vital to the success of digitisation projects, alongside systems that can be implemented and then expand as the business grows.

If treasurers embrace change and build the skills needed to actively participate in digital transformation, they can make the treasury department indispensable and demonstrate why they deserve a seat at the table when digital and technology strategies are being decided.

In terms of specific technologies, the release of application protocol interfaces or APIs that enable connectivity between corporate accounting software, corporate middleware and bank portals has the potential to yield a variety of benefits for corporates, including the availability of balance and transaction information in (near) real-time to enable more accurate and timely decision making and further optimise cash and credit lines.

By allowing the transfer of information specific to the needs of the customer, APIs ensure that only the required data is transferred – meaning limited interface capacity is not wasted on the movement of irrelevant information. In addition, payments can be executed in real-time and connectivity to new banking partners can be achieved more quickly, especially for corporates who work via partners that maintain connections with a wide set of banks.

When it comes to this future connectivity, corporates also need to consider whether their provider will be able to move to the open banking APIs once the banks make them available and will be able to provide APIs to their ERP environment. Determining whether providers can facilitate such a move involves checking on their ability to handle external APIs (from banks, for instance) and whether they have the right licences and capabilities to connect via APIs to these banks’ and corporates’ systems once they are ready.

The potential of blockchain technology to enable banks to design new instruments and new ecosystems to support the great need of securing and financing trade operations – notably for SMEs –  while reducing the constraints and costs of traditional instruments such as letters of credit is also intriguing.

The 7 habits of highly effective treasurers

Why are some treasury teams more adept at managing the financial challenges faced by their enterprises than others? We decided to identify some of the factors that contribute to intelligent treasury management and operational excellence and created an e-book which we would like to share with you. If you follow the habits outlined in this e-book, you will be well on the way to better cash flow and working capital management.

01-09-2022 | Cobase | treasuryXL | LinkedIn |

Before sending a payment to a bank, a check on beneficiary account changes compared to previous payments made to the same beneficiary/vendor can point to invoice fraud. Checking changes in amounts compared to a median amount of past payments – and payment frequency – can also be beneficial.

Internal fraud is usually either committed once with a high value, or regularly for smaller volumes. If treasurers know the usual process they can determine if something is out of the ordinary.

Malicious activity is difficult to detect in a cumbersome and scattered ERP and bank environment. Therefore, harmonised practices increase transparency and visibility, while uniform processes help to track cash outflows.

Eliminating manual handling of payment data removes many opportunities for fraud and also adds to the transparency, quality and speed of payments.

To prevent false invoicing, a limited number of users should have the ability to create new payees, settlement instructions, and cash transfers.

The treasurers who are at the highest risk from fraudulent activity are those with decentralised operating structures, higher transaction volumes, and fragmented/outdated technologies.

Over the last few years, corporates that have accelerated their move to the cloud have benefitted from the massive investment cloud providers have made to secure their platforms. Having systems and processes running on the cloud allows additional security measures to be taken that are very difficult to implement or are not available for deployment on site.

Corporates should establish a social media use policy to ensure fraudsters are not made aware when treasury staff are out of the office. Employees should not use their company email address to register on any social media website for personal use and any social media posting by an employee should be consistent with company policies and reviewed through a central function.

If you rely on a bank connectivity partner for all your bank connections you also need to be sure that they work in a secure and reliable way.

Sanctions have become a high profile topic following the Russian invasion of Ukraine and companies need to embrace the regulatory changes put in place to protect against international money laundering and sanction breaking.

One important tool which will assist with sanctions checking is the introduction of the ISO 20022 file format for payment messages. The richer data facilitated by the new file format will improve cross-checking, increase transparency, and reduce false positives.

Treasurers should put in place a system of fraud detection based on multiple lines of defence including automatic sanction screening as well as black-list verification. Solely relying on banks’ sanction screening is not necessarily sufficient.

Corporates also need to consider that while analysis of both the remitter and beneficiary provides a more detailed basis for screening this may slow the transaction process down, negatively impacting the user experience. It is therefore vital to use tools that flag misconduct or other issues while minimising operational impacts.

In the final blog in this series we will look at how digital transformation impacts skills requirements, the benefits to treasury in terms of becoming more strategically important, how APIs are enabling more accurate and timely decision-making, and key issues around future connectivity.

The 7 habits of highly effective treasurers

Why are some treasury teams more adept at managing the financial challenges faced by their enterprises than others? We decided to identify some of the factors that contribute to intelligent treasury management and operational excellence and created an e-book which we would like to share with you. If you follow the habits outlined in this e-book, you will be well on the way to better cash flow and working capital management.