Transforming Treasury Management: The Power of AI
The landscape of enterprise treasury management is evolving rapidly with the integration of Artificial Intelligence (AI). Businesses embracing this shift can trade cumbersome manual spreadsheets for streamlined, automated data pipelines, paving the way for enhanced efficiency and accuracy.
The Challenges Faced by Corporate Finance Departments
Corporate finance teams are under increasing pressure to navigate market volatility, adhere to stringent regulatory demands, and meet the challenges posed by digital finance requirements. Ashish Kumar, the head of Infosys Oracle Sales for North America, and CM Grover, CEO of IBS FinTech, recently shed light on the current realities facing corporate treasuries in a discussion that underscored the urgency of modernization.
IBS FinTech, a leader in treasury management solutions, has been in operation for 19 years and ranks among the top five global companies according to an IDC report. Grover highlights a critical point: while many business sectors have adopted AI-powered automation, treasury departments still often rely heavily on manual processes and spreadsheets.
The Manual Spreadsheet Conundrum
Grover pointedly remarked, “IBS FinTech has identified the gap in the CFO’s office where they are managing their most critical information system—treasury management—on Excel.” This reliance on manual spreadsheets can lead to inefficiencies and inaccuracies, particularly when managing cash, liquidity, and risk.
Treasury teams juggle a variety of tasks, such as managing foreign currency risks associated with imports and exports and navigating commodity risks. Companies with cash surpluses also face the challenge of effectively investing these resources to generate returns. Yet, many enterprises find themselves operating with a disconnection from real-time data.
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Addressing Data Bottlenecks with AI
A key challenge for enterprise treasuries lies in their outdated data collection methods. Teams frequently execute trades on platforms like Bloomberg, Reuters, or 360D, only to manually input this data into spreadsheets. Subsequently, they must transfer relevant information to their enterprise resource planning (ERP) systems. This convoluted process is a bottleneck that hinders timely decision-making.
Implementing AI solutions in finance demands the elimination of these challenges. While leaders may perceive AI as a quick fix, successful integration hinges on having digitized and automated data. Grover emphasized that “It is not by talking you can do AI in treasury. You have to create that underlying data set that has to be digitised and automated.”
Creating a Foundation: The Role of Integration
To establish a solid data foundation, businesses need to integrate treasury management systems with existing ERPs. IBS FinTech, for instance, built its backend on Oracle databases from its inception and now seamlessly integrates with Oracle Cloud, NetSuite, and Fusion.
A connected ecosystem is essential. The treasury management system should communicate effectively with the ERP, trading platforms, and banks. This integration empowers executives with accurate, real-time data to manage liquidity, mitigate risks, and ensure compliance across all systems.
As geopolitical and economic factors increasingly fuel global volatility, Grover anticipates that automation and real-time reporting will become crucial for businesses navigating this uncertain landscape.
Building Financial Resilience Through Modernization
For corporate leaders, modernizing treasury management using AI while connecting it to ERP systems can significantly enhance financial resilience. Kumar suggests that enterprise leaders conduct thorough audits of their existing data workflows. If a finance team continues to rely on manual entry between trading platforms and ERP systems, any AI initiatives are likely to falter due to poor data quality.
By ensuring that integrations run smoothly, data can flow in real-time with reduced risk of error, thus creating a robust baseline for deploying future technological advancements.
Embracing Future Opportunities
To learn more about how AI and big data are shaping financial practices, check out the AI & Big Data Expo series taking place in Amsterdam, California, and London. This comprehensive event, part of TechEx, is co-located with several leading technology fairs, including the Cyber Security & Cloud Expo.
Staying informed and proactive about these advancements is essential for enterprises looking to thrive in a rapidly changing financial environment. Integrating AI into treasury management is not just a trend; it’s a critical step toward achieving operational excellence.
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