Back-Office Treasury Management Trends to Watch

It’s no secret that technology is pushing, pulling, and morphing the payments landscape. While this is obvious on the front end, it’s happening in back-office treasury management as well. As we move into Q4, now is the time to evaluate where technology may help to streamline treasury management – and to identify payments trends that could impact the future. 

PaymentsJournal published an article that explored the strategic role of treasury, including priorities and challenges. The publication spoke with Jon Paquette, VP of Solutions at TIS, and Steve Murphy, Director of Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group. We’ve summarized the key takeaways below.

What’s Next For Treasury

According to Murphy, treasury has undergone some significant changes since the Great Recession of 2008-2009. In the wake of the pandemic, digitization is a key focus for treasury departments. Paquette pointed out that a recent TIS survey reported that 80% of respondents expect increased responsibilities. 

While the survey covered multiple departments across FP&A, treasury, and accounts payable, treasury responded most favorably in expecting more responsibilities next year. Half of the respondents (50%) reported expecting professional development opportunities to increase and three-quarters (75%) said they planned to upgrade technology in their department. 

The Role of Tech in Back-Office Treasury Management

While the majority of respondents reported expected technology upgrades, small/midsize and enterprise organizations reported varied answers on the types of tech and how and why it would be used. According to Paquette, smaller companies are more focused on process automation and cash forecasting in treasury. In fact, most organizations seem to be hopeful about the role of AI. 

Enterprise organizations, on the other hand, are strongly focused on data. More specifically, they want to garner better insights from data and leverage data for pattern recognition and machine learning to strengthen fraud detection. 

Many trends reported were to be expected; 75% of respondents reported they plan to use bank APIs this year. Yet other results were more novel; nearly half reported interest in leveraging real-time payments. And 15% reported interest in cryptocurrencies. On the other hand, interest in things like account validation services – a seemingly important benefit – was lower at around 5%. 

Less Manual, More Real-Time

Overall, risk mitigation ruled the roost in terms of what respondents hoped to achieve with technology. Organizations report wanting to eliminate manual payments while also revamping training programs. Paquette pointed out that AI will be integral to driving those efforts this year. 

For small/midsize companies, cash management was the top skill upgrade reported, with 41% of respondents indicating this was the most important. Corporates have a strong desire to move into the real-time realm, which unpredictability that occurred during the pandemic may have bolstered. 

While most have high hopes for what can technology can achieve in both the short and long term, organizations still need to nail down certain things due to the volatility caused by the pandemic. To start, organizations must determine if they are set up to take advantage of emerging technology for back-office treasury management. 

Are you looking to revamp treasury and learn how technology can help you streamline operations? Contact us today for a free consultation. Our team of payments experts has worked with organizations big and small to create seamless experiences on the front and back ends.