Navigating Treasury Technology in 2024

Navigating trends in treasury technology requires a keen understanding of the evolving landscape. With a focus on automation and cash forecasting, treasurers prioritise efficiency and strategic insights.

FREMONT, CA: Global treasury departments are going through a major metamorphosis driven by technological advancements. The digital revolution is changing traditional banking and transaction systems by providing faster and more secure ways to transfer value. This is evidenced by the rise of blockchain, cryptocurrencies, and the integration of AI and ML. Treasury management will handle cash in the future and must also be flexible to operate in a dynamic and complex environment.

Emerging Trends in Treasury Technology

Consolidation and Innovation in the Treasury Technology Market

Significant M&A activity has resulted in notable consolidation in the treasury tech market. Even with this consolidation, new players are still entering the market aimed at mid-size segments. This gives practitioners more options but also makes valuation and decision-making more difficult.

Regarding innovation, emerging technologies like APIs, Robotics & RPA, Visual Analytics, ML & AI, Big Data, and Blockchain are gaining traction in the treasury space. API adoption is the strongest use case, with 86 per cent considering or already implementing it. While RPA and Visualisation/Analytics are popular across finance functions, about 20 per cent are exploring ML/AI, and blockchain's full potential in treasury remains untapped due to limited current applications.

Priorities on Treasurers' Technology Wish List: Automation and Cash Forecasting

For the coming year, treasurers are establishing specific goals, focusing on increased treasury automation (61 per cent) and the ongoing importance of cash forecasting (55 per cent). Notably, cash visibility is receiving more attention than ever—nearly twice as much as it did the previous year. Treasurers anticipate receiving technology from providers that support these priorities as they look for seamless integrations between ERPs, treasury systems, and banks. In addition, practitioners are searching for more centralised solutions and improved reporting options, especially in interactive reporting, with the goal of having a single solution or a single sign-on for several systems.

Surging Adoption: Payments Leading the Way

While automation has advanced significantly in many areas of treasury operations, risk management has not kept up, being less automated than other processes such as payments. There is a noticeable difference in the interface between general ledgers and treasury management systems: roughly 30 per cent of the former report no automation, while 20 per cent report full automation. With TMS software, fewer than 35 per cent of treasury departments have achieved complete automation. Despite the advancements in treasury platforms, presenting data in formats accessible to non-treasury audiences remains primarily manual, often relying on tools like Excel or occasionally more specialized reporting solutions like Power BI.

SAP, FIS, and Kyriba Dominate the Treasury Systems Arena

Coupa and FIS stand out as leaders in the current landscape of treasury technology usage, closely followed by Nomentia, Kyriba, Fides, and ION. Interestingly, more than 40 per cent of treasurers use more than one treasury technology solution, demonstrating the need for unified systems. In contrast, SAP Treasury leads the field of respondents in Deloitte's 2022 Global Treasury Survey, with Kyriba, FIS, and ION following depending on the modules.

Based on our independent research, SAP remains a prominent player in line with larger trends. More than 30 per cent of respondents to a survey of more than 100 members of the Treasury group on LinkedIn said SAP was their main source of treasury software, followed by Kyriba with over 25 per cent and FIS with less than 20 per cent.

The Complex Journey to Treasury Technology Purchase

Treasurers have distinct priorities, but implementing new technology presents difficulties. The process becomes more complicated in larger organisations when multiple stakeholders must be consulted. Research indicates that half of the treasurers plan to spend between $50,000 and $250,000 in the upcoming year, with budgets for treasury technology remaining relatively static.

However, despite these advancements, the journey toward purchasing treasury technology poses significant challenges, necessitating a careful and strategic approach in this evolving landscape.