Trésorier/Treasurer magazine - N°94 - Juil/Août/Sept 2016 - (Page 52)

A WIND OF TECHNOLOGY CHANGES IN THE TREASURY MANAGEMENT WORLD Since the 2008 financial crisis, treasurers have faced challenging times. This crisis has reinforced the need for close monitoring of the financial markets, optimization of cash flow and risk management. Meanwhile, treasury management has become more automated through the use of new means, digitalisation and further integration of corporate financial systems which decreases the number of manual activities and makes the process more LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE - N°94 - JUL / AUG / SEP 2016 efficient and more secure. But what are these main arising technology changes that impact treasury management 52 and to what extend do they impact this function? Main changes in the treasury management landscape have been achieved through the digitalization of the market. Digitalization has already influenced treasury management with the setup of new standards such as the Single Euro Payment Agreement 1 ("SEPA"), and means such as Bank Payment Obligations 2 ("BPO"), which combine rapid processing with robust risk mitigation in cash collection, improve trading relations and ease solving difficulties with payment terms. Further technology changes have been developed and impact further treasury management: * New transaction services models offer companies their own transactions platform, which is cost efficient and faster than the previous solutions; * Cross-bank bidding platforms stimulate bank rates competition in transaction security services; * Companies have now the possibility to strengthen the centralization of their cash pooling management by creating virtual subsidiary accounts with their own funds (which are notional allocations from the parent account), their own account numbers and administrators. Virtual accounts reduce account fees and maximize interest return as firms can scale down the number of full accounts they operate, but virtual accounts also ease cash pooling process as the funds are already part of the parent account. All these changes brought a new dynamic in the treasury management as they impacted payment terms and process, working capital, cash pooling management and treasury. Technology and system automation do not only redesign treasury management but also the treasurer's role, which is shifting it towards more strategic functions. Indeed treasurers are relieved from manual and basic tasks in order to focus on new tasks such as the improvement of cash forecasting, review of hedge policies, monitoring and implementation of new technologies and processes. Some studies tend to prove that Treasury Management Systems (TMS) have undeniably increased the treasury team's performance to analyse data, as well as to save costs and time. A study realized in collaboration with the British Association of Corporate Treasurers reveals that in 2015 almost 50% 3 of the companies with less than £500 million revenue (SMEs4 ) were using spreadsheet for treasury management, against 10 % for the large Technology and system automation do not only redesign treasury management but also the treasurer's role, which is shifting it towards more strategic functions. companies (revenue over £10 bn). This is due to the fact that SMEs are lacking time and resources (employees and financial) to implement a TMS and/or that treasury management is not complex enough to require the use of a dedicated system. TMS have the advantage of increasing speed over the process, reducing the risk of error in data, having manageable accesses and documented procedures, while spreadsheets are limited on these aspects but are more flexible, easy and cost efficient to use and to monitor. Technology changes and digitalization are positively impacting companies but unequally, as for the smaller ones TMS complexity, cost of implementation, use and monitoring do not overweight resulting benefits.

Table of Contents for the Digital Edition of Trésorier/Treasurer magazine - N°94 - Juil/Août/Sept 2016

Table of contents
INTERVIEW Philippe Gelis - Kantox - Fintech and the future of banks
Lost in transformation
Everything has a price – a transfer price
Treasury Survey - an unprecedented picture of treasury activities in Luxembourg
The impact of negative rates on Treasury and Risks Management Systems
Towards reporting harmonisation?
Understanding the Treasury impact of BEPS
Impacts of Single Resolution Mechanism and Bail-in for European Banks
Supply chain? Not concerned?
Collateral management and the Corporate Treasury function.
Efficiently Managing Cross-Border Payments in Turbulent Times
How Mid-Market Companies Can Efficiently Manage Enterprise-wide FX Risk as they Grow
Investing surplus cash in repos
A wind of technology changes in the treasury management world
Invoicing can be fun….?
Comment améliorer la performance des fonds de pension européens

Trésorier/Treasurer magazine - N°94 - Juil/Août/Sept 2016