Corporate treasurers are falling behind on the technology adoption front while their colleagues in the business units are bounding ahead with innovative technologies, according to a survey by consultancy Treasury Alliance Group. This has left treasury organizations mostly adopting tech in small steps.
Treasury Alliance took a different approach to a survey it recently conducted for Treasury Intelligence Solutions. Rather than seeking as many responses as possible on a set number of questions, it conducted depth interviews and email follow ups with 50 global corporates, banks, and other treasury-related organizations. Echoing discussions in NeuGroup meetings, the survey found that companies’ businesses are driving the adoption of new technology such as artificial intelligence (AI) and blockchain, and treasury departments are only taking incremental steps.
“Treasuries are doing what they’ve always done, and there’s no fear of missing out,” said Daniel Blumen, partner at Treasury Alliance.
Unsurprisingly, the survey found participating treasury departments in corporates with between $5 billion and $20 billion in sales still rely heavily on Excel spread sheets. What did surprise Mr. Blumen, however, was that several of them had no plans to implement “workflow wrappers,” which enable multiple treasury executives to work on an Excel spreadsheet in the cloud, enabling time stamps and greater auditability.
“Folks are not taking advantage of this cloud opportunity,” Mr. Blumen said in an interview.
Change will be gradual. In a report about the survey titled “Clearing the Fog: The State of Treasury and Payments Technology,” Treasury Alliance notes that the current treasury “ecosystem,” i.e., banks, SWIFT, spreadsheets and treasury management systems (TMSs), is unlikely to be disrupted significantly anytime soon by emerging technology. Meanwhile, the report says, TMS solutions have consolidated and are differentiated today by their sponsors’ marketing and financial viability.
One finding treasurers may be unpleased to hear is that generational outlook makes a difference on the tech front. The survey report quotes one “frustrated fintech innovator” who “observed that treasurers of large companies are older and challenged in the use of basic technology tools.”
Treasury complaints. The report notes several complaints corporate treasury participants mentioned in the survey will have implications for banks and technology firms. One is that the data to support good treasury decisions and actions remains difficult to gather, with cash and investment balances residing in multiple systems. There also needs to be centers of information that can be accessed in consistent ways. Treasuries are also struggling with how to maintain accurate and compliant data on customers and vendors, and whether to rely on third-party vendors or develop an in-house solution.
The survey found that many treasuries recognize TMS as necessary, but—as NeuGroup members often note at meetings—they find TMS vendors’ sales tactics to be overly aggressive, support poor, costs high, and functionality inadequate among many other criticisms. One respondent, the survey notes, said he addressed these issues with a robust selection process that ensured alignment between the vendor product and services and the company’s requirements. Others supplement the process with careful negotiation that involves their procurement partners who have greater experience with software acquisition.
Regulation was another pain point. The survey report notes the global requirement to “know their customers,” but multiple regulatory and bank interpretations make that challenging, and many corporates rely on local staff or third-party providers that don’t have a clear understanding of the corporate organization the task can require.
“The result is lengthy delays in opening bank accounts or otherwise conducting business,” the report says.