What will be the emerging fintech’s in treasury in 2024?

With the emergence and omnipresence of tech start-up companies in the financial sector, and more specifically in treasury, it's fair to ask which ones we'll be counting on in the months to come. It seems to us that certain FinTech’s, through their technology, their products, and their positioning, look like future challengers to the more traditional IT vendors who produce TMS. Without in any way claiming to know them all, I've tried to list them in the Tech Map and wanted to share with you those that seem to me the most promising and unavoidable. At the very least, I guarantee you'll hear about them, if you haven't already. ?

Dynamic Treasury Management

Taking an interest in these FinTech’s (some of which we've identified, and others we're sure to see) is not a pointless exercise if we are to make progress along the road to "dynamic treasury management". Who would argue that the treasurer is not the nerve center of the entire finance function? It's vital, yet often overlooked for lack of vision, proactivity, and positioning. Fintech's give us a fantastic opportunity to reposition ourselves and make ourselves "indispensable". It all comes down to a mindset and a willingness to challenge oneself. If you've identified the weak points, the missing internal controls, the semi-automated processes, and the reports with slow, non-immediate production, then you can start looking to optimize your management. If large IT vendors buy FinTech’s, this proves their shortcomings; if they set up platforms or App stores with their partners, it's to better serve their customers. If you've admitted and accepted imperfections and want to remedy them, then the following will undoubtedly be of interest to you.

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Emerging financial tech providers in 2024

It seems to us that certain names are emerging (and once again, this list is non-comprehensive, as there are so many others). When it comes to digital signature powers, a sort of Loch Ness monster, I see DELEGA emerging and enabling these powers to be digitized to facilitate the work of the treasurer and his banker. It will be the perfect complement to eBAM or BAM solutions. KYC remains an eyesore for everyone, and anything that makes it more automatic and therefore more secure is welcome. I would recommend following I-HUB, which offer a great KYC solution, as well as CONFORMITEE. When it comes to FX management, there's no doubt that KANTOX is the way to mechanize the process of identifying the underlying risk and automating hedging in real time, to protect trading margins in a hyper-competitive world. It also enables dynamic hedging management and limits the impact of swap points. In terms of hyper-automation, I like FENNECH, which transcends the use of "smart contracts" to "customize" a series of processes that are often quite manual or poorly served, such as the management of bank guarantees, KYC documents, the use of real virtual accounts (not virtual IBANs) to reduce banking costs, and the extraction-transformation and loading of data to transcend its use and tailor financial reports. As far as Asset Management is concerned, I think that platforms will continue to emerge for MMF's, but with solutions like Treasury Spring, the deposit and tri-party repos market is finally becoming easy and automated. It enables better management of counterparty risk, which these days remain essential. In terms of cash-flow forecasting, I note that there is a plethora of players, but few who make use of AI. I find AIvidens interesting for its use of artificial intelligence to detect customer risks and predict future problems. I wouldn't want to forget the mainframe integrators, who can also play a vital role in the implementation of more comprehensive, high-performance tools. Those who believe only in SAP4hana, for example, need to choose their integrator carefully if they are to succeed in their ambitious gamble. INTENSUM seems to me to be a leading player in this field. I'd like to mention DEFTHEDGE, which, for the specific and often laborious management of commodities, makes it possible to optimize and integrate this management with cash management at low cost, and to forget about management by XL. I'd like to mention BANKING CIRCLE, which is a neo-bank, if I can call it that, and which seeks to offer alternative solutions for certain corporate clients or funds. I love their innovative, disruptive spirit and UX approach. However, big banks are also investing in FinTech’s and co-creating with their customers. BNP Paribas is one of a handful of proactive global players that have understood customer expectations and want to differentiate themselves. In the field of banking connectivity, we can mention FINOLOGEE and its new rebranded “LINKS”, which thanks to its status as a "Financial Sector Professional" (PSF) can pay and collect on behalf of, removing the infinite burden of the Swift Customer Security Program. Finally, I'd like to mention ALLMYBANK or COBASE, which are increasingly comprehensive solutions for smaller companies (in particular, but not exclusively) or companies without a treasurer. They will also emerge to professionalize cash management for SME's, family offices and funds. In terms of digitalization of RFP's, usually a nightmare for Corporates (and also for their suppliers), TREASURY DELTA offers a fantastic solution, which should also become soon a "must have".

At the risk of sounding partisan, I'll stop here, as the list of high-potential solutions is enormous. My mapping of treasury solutions will give you an idea of the number of solutions on the market. The list is very long, and probably "too" long to mention them all. Please don't mind me mentioning only the ones I think are the most promising.

Innovation requires a state of mind and the desire to do better.

To improve management, the treasurer must first have the right frame of mind. The problem comes from those who don't want to change anything, thinking that everything's running "relatively" smoothly and that's enough. Those who think that change means taking risks won't make much headway either. Unfortunately, curiosity and proactivity are all too often lacking. If a treasurer is happy and content to forecast future cash flows on spreadsheets, good for him. This is not modern cash management. If a treasurer thinks that automating foreign exchange risk management starts when he is told of a risk identified upstream, he/she loses all the benefit of immediate hedging, and if the risk on a weekend, a cut-off time or a lagged hedge doesn't matter to him, then what's the point of changing? FinTech’s are a kind of medicine for the sick. But you must admit it, to heal yourself and do better. Finally, we need to convince the C-level that investing in a fintech solution to improve a process is virtuous, and that having a TMS is not the solution to everything. You can have a functional car that's missing a vital option to maximize its use. Let's think of these fintech's as options for a vehicle that can't do everything well enough. We'll be talking about these and other names in the coming months. So, open your eyes and question yourselves.

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Fran?ois Masquelier, CEO of Simply Treasury – Luxembourg January 2024

Disclaimer: This article was prepared by Fran?ois Masquelier in his personal capacity. The opinion expressed in this article are the author’s own and do not necessarily reflect the view of the European Association of Corporate Treasurers (i.e., EACT).

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