Boosting the Bots: The Next Step Towards Treasury Digitisation
By François Masquelier, Head of Corporate Finance and Treasury, RTL Group, and Honorary Chairman, European Association of Corporate Treasurers
Where should the digital transformation of a treasury department begin? That’s the issue currently occupying many treasurers’ minds. How can we use robots as part of the treasury process in order to gain in terms of efficiency, resources and security? This article aims to set out a gradual and logical approach to retro-fitting and further digitising an organisation. After all, the world is changing so swiftly that increased agility within a more flexible and finely tuned structure is an absolute must.
The path to digitisation
If they haven’t already done so, treasurers need to firmly commit to the ‘digitisation’ of their daily activities. The treasurer’s role is to make their organisation more resistant and more resilient, but that doesn’t just involve having a more efficient treasury management system (TMS). That will help, but it won’t suffice on its own. The treasury department’s IT architecture needs to be redefined as a whole, but that’s a long and complex road strewn with hazards, and often, there is no clear destination.
There’s no miracle cure or plan applicable to everyone, but unless action is taken now, greater operational efficiency will remain out of reach. Once existing systems have been optimised (e.g. TMS, Payment Factory and the other IT satellites and additional applications), the next stage is to install an Extract Transform Load (ETL) system in order to connect and consolidate data and add the missing layer of reporting required. This is the ideal way of bridging gaps in terms of reporting and functionality.
This phase can best be described as ‘IT consolidation’, designed to rectify any absences and deficiencies, especially in terms of financial reports. Such a customisation enables the development of dashboards and a full array of key performance indicators. This preliminary customisation stage of system consolidation and optimisation of processes and reports simply can’t be skipped. Once this layer is in place, the next step will be the deployment of robots in order to automate a series of processes.
Fig 1 - The Drivers of Change
Unblocking resources and power through robots
The overarching objective is to unlock the (potential) power of introducing robots into treasury processes by automating certain repetitive, tedious or laborious processes that present systematic characteristics, even if this involves opening and searching for information in multiple IT systems. In essence, a robot is just software that will perform macros in the same way as a spreadsheet file, but on a multi-system basis, and enables the execution of an action or a successive and repetitive set of actions, possibly with calculations. Robotics process automation (RPA) can be achieved using low-cost and efficient products such as Blue Prism, Automation Anywhere, Ui Path. It’s also possible to use systems like IBM’s Watson which will leverage artificial intelligence (AI) to carry out these functions. So if robots in treasury were ever merely a myth or pipe dream, that’s no longer the case today.
Is the finance department fit for purpose?
Entire finance departments are going to have to change and adapt. In this unavoidable evolution of finance as a whole, treasurers need to be proactive regarding their own adaptation and bring themselves up to digital speed. Sitting back passively while being subjected to a profound transformation would be tantamount to madness, as the figure 2 diagram illustrates.
Fig 2 - Finance Transformation Roadmap
This digital transformation is structured around the transformation of the entire finance department. CFOs are currently grappling with multiple challenges and evolving goals, such as cost reduction, more rapid production of financial information, simplification of financial processes and reduction of red tape. They have to play the role of integrator, better understanding the expectations of contacts and subsidiaries, and enhancing risk management by deploying more effective predictive tools. All this is set against the background of tumultuous economic, regulatory and political environments, and an increasing number of fraud attempts.
The root-and-branch structure of finance departments is due a complete overhaul. CFOs are going to have to deliver greater agility, be more connected and more focused in terms of data. They will also have to integrate new technical skills, make better use of the data at their disposal and improve the decision-making process via predictive analysis, irrespective of the technical resources deployed.