Impacts of Pandemic on digitization and treasury work organization (part 2)

Impacts of Pandemic on digitization and treasury work organization

(part 2)

1.??What have treasurers’ digital requirements meant for banks and technology providers?

For banks, this has required the most innovative and creative ones to develop co-creation and collaboration to develop in partnership with their customers tailor-made solutions, capable of being later extended to any type of customer. PSD2 and the interfaces offered in the form of API's have changed the situation and treasurers are becoming more "proactive" to help this change and simplify their daily life. For banks this has required more agility, creativity, working with customers and investing in fintech's to improve their offerings. New payment methods have also forced banks to innovate faster. However, for IT vendors, this has not changed their approach but has helped them to sell more easily under the circumstances and pressing needs. However, there is a new trend to integrate other solutions in a horizontal way to complete their offers (e.g., TAULIA acquired by SAP, BELLIN by COUPA, etc...). The solutions existed but the crisis has made it easier to sell them perhaps.

2.??How did ‘digital culture’ in treasury change during the pandemic - and how has this continued/ evolved as we’ve moved in to a new ‘business as usual’?

I'm not sure that the digital culture has really changed in general (unfortunately I would say). The need has become more pressing and urgent. If you look at other sectors like hedge funds or family offices, their digital culture has remained sadly unchanged. Awareness of the need to digitize or completely overhaul their IT architecture and processes has changed for the treasurer. Some have become aware of the need to recruit differently and better. We need to diversify the profiles to improve performance and reach a more suitable digital level. This is a challenge that is not easy for the treasurer, who is by nature, very conservative. It seems to me that the most courageous CFOs are tackling the challenge of revisiting their whole finance organization. But few have developed a true digital culture. You don't transform yourself all at once, even after such a crisis. However, the CFO, but also the treasurer, should change their digital mindset and culture to be the actors of this change, the catalysts, the supporters of digital change and the promoters of "we can do better" by automating more and centralizing more.

3.??We talk about data-driven treasuries - treasury has always relied on data to automate processes and make better decisions, but what does this mean today in a post-pandemic world? How are treasury functions adapting, e.g., skill sets, technology, organizational models, relationships with other parts of the business?

Modern treasuries should adapt to be more resilient, better equipped with systems and skilled human resources. Change is happening slowly and gradually. But treasury, which has been found to be unattractive to recruit, may also find it difficult to recruit other profiles. The battle is not yet won, even if attitudes are gradually changing. To be able to make proper use of the large amount of financial data available, there is a need to (1) standardize the formats more. It is also necessary (2) to adopt an ETL (Extract Transform Load) or to review one's tool for a more complete and integrated system such as SAP4hana, for example. This is the problem with the classic “best-of-breeds” approach. Finally, (3) the data must be extracted for processing. Here we see that AI and machine learning seem to give good results, for example, for cash-flow forecasts, for fraud detection, etc.?If the information is not readily available in a good format for automate export in a format other than XL, it will have to be extracted and transformed semi-manually, and this will make the result more imprecise, less accomplished, and less reliable. Robots may help. Although they remain a less robust or even temporary solution. Companies that want to go further often choose to implement a single integrated system, even if it is a huge job. But let's not forget that many treasurers are not there yet and that they think first to make work automatically and digitally what should already be. Everyone has their own priorities depending on their technological and organizational maturity.

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Responses from Fran?ois Masquelier, Chair of ATEL, Luxembourg – July 2022?