A New Era of Digital Finance for Treasury Teams

To get ahead (and stay ahead) treasury teams need to innovate and adopt advanced systems and leading practices. Resilience is no longer optional.

Donald Hoye, SVP, Treasury Sales Group Manager, Capital One

April 7, 2022

4 Min Read
digital outline of a cloud with financial symbols surrounding it
SergiyTimashov via Adobe Stock

Hybrid and remote work are becoming commonplace as organizations of every size and type adjust to the pandemic era and implement more resilient ways of working. According to PWC, less than one in five executives say they want to return to the office as it was pre-pandemic.

Before the global pandemic, many treasury teams knew they needed to shift from paper to digital, but adoption was challenging, and this shift often fell in the nice-to-have category. Treasury teams often used spreadsheets to manage cash flow forecasting. They relied on printed checks stuffed and mailed onsite and sent via the mail for their accounts payable. All of this took place while much of the world -- especially consumers -- shifted to digital payments.

Like other aspects of doing business, the pandemic forced many treasury teams to re-think the efficiency of these manual processes. They sought remote-friendly approaches to doing their jobs, enabling them to innovate, reassess their risks, and ensure IT infrastructure is prioritizing the shift to this digital first mindset.

This has resulted in more organizations implementing cloud-native tools and automation processes to keep their business going. Research has found CFOs and treasurers are focusing more on technology improvements and digital innovation compared to in 2019, with a primary focus on gaining efficiency and generating more impactful insights. Departments continue to focus on data analytics, process automation and visualization tools to drive digital transformations and demonstrate the value of treasury technology investments in supporting a broad range of activities. While this trend is expected to continue, it will take time for this sector to fully utilize cloud computing in all its forms.

Overcoming Transformation Hurdles

One of the most significant barriers to achieving the full potential of digital transformation is the mix of aging and siloed systems. These environments lack the integration that treasury organizations require for timely visibility into cash, investment, and debt portfolios. They also hinder cross-department collaboration for improved performance.

Organizations that have put a cloud-based financial management system in place can attest that despite up-front challenges, implementation helps them to simplify systems. It can drive huge efficiencies throughout the business, improve performance and even help with risk management.

For treasury teams this could mean optimizing or streamlining treasury/cash operations, particularly in payments processing and collection or making cash management, banking, and payment practices more efficient and economical.

From a people perspective, digital transformation can also help overcome the impact of the "Great Resignation" happening across the country. Traditionally, roles in treasury management always involved menial and mundane tasks like reconciling spreadsheets, logging payments, and forecasting financials.

The good news is the shift to digital helps to free up peoples' time, in turn boosting morale and retention numbers in this competitive climate. Companies also report that adopting new technologies helps with recruiting new team members, as many simply won’t accept a position on a team that relies on manual processes.

Take a Phased Implementation Approach

While the possibilities and benefits of cloud-based tools are endless, enacting widespread change is rarely easy.

Implementation should take place in a phased approach to spread out the cost and risk. Start by testing. Then roll it out in one area before pushing out the new processes more broadly. This approach will give you a better chance of getting it right the first time. Also, you will likely avoid stopping and starting on a much bigger scale.

It’s vital to remember that these solutions aren’t one-size-fits-all. Instead, treasury teams should think of the process as being much like piecing together a jigsaw puzzle. For complex situations, that may mean working with several partners to build, implement, personalize, and scale the solution that’s best for your treasury team and organization.

Equally important is proper training. When rolling out training for these systems, think of it as a balancing act. Use that time to ensure longtime employees are familiar with the new processes. But also look upon this time as an opportunity to showcase innovation to the next wave of employees.

To get ahead (and stay ahead) treasury teams need to innovate and adopt advanced systems and leading practices. Resilience is no longer optional. Every organization must start with specific, measurable goals. Then work with trusted advisors so it can take a multipronged approach that starts small and is readily scalable to the entire organization. Transformation is a long journey, but it comes with big rewards.

About the Author(s)

Donald Hoye

SVP, Treasury Sales Group Manager, Capital One

Donny Hoye leads the Specialized Industries team for Capital One's Treasury Management Consultant division. His group has been solving complex cash management and fintech problems in Healthcare, Financial institutions, Technology, Media, and Telecom. Donny is an experienced financial technology enthusiast with a long track record of finding innovative solutions to help solve deep rooted issues. Prior to Capital One he worked in digital media analytics, and in cash management at a money center bank.

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