Christian Lucarelli, Vice President Asia Pacific, Nintex, says automation was already a key trend coming into 2023 but its adoption and use is accelerating.
Rising global inflation, interest rate increases and economic uncertainty have brought finance – and specifically treasury – functions into sharper focus. All eyes are now trained on the levers available to these teams to operate efficiently, reduce risk and navigate these tricky market conditions.
Some clear trends in this space are emerging.
Teams want to have more refined control over these levers. They also increasingly want backend processes to be as automated as possible, and for that automation to be simple enough for teams to specify, design and switch on.
Automation was already a technology of interest to treasury and finance teams, but this has increased in recent times, according to Deloitte. It is now seen as an enabler to address key challenges facing treasuries, including ‘liquidity management, financial risk, Business Continuity and operating model priorities.’
In another study by PwC, process automation is positioned as a key tool to ‘drive Digital Transformations and demonstrate the value of treasury technology investments in supporting a broad range of activities’ covering ‘payments, collections and reconciliation.’
The same PwC study notes outline three corporate visions for treasury: ‘To be able to perform daily treasury functions on autopilot’, to have a ‘connected ecosystem supporting real-time financial decision making’ and to have a ‘set of complementary niche solutions’ including process automation. Realistically, all three require a focus on automation in order to succeed.
With the need and desire for automation clearly evident, the real question is how treasury and finance departments are going about building out these capabilities.
What’s becoming evident is that in the current volatile environment, treasurers with the flexibility to quickly create automation tools for short-term or even one-off deployment have a clear advantage over those who rely on their often over-stretched IT departments or vendors to do this work.
It is within this context that the emergence of low-code (and even no-code) tools is reshaping the ‘art of the possible’ for treasury and finance teams.
Low-code tools are designed to enable non-IT professionals to develop the automation software they want, using pre-configured and pre-tested elements such as modules, logic, templates and connectors – which can be reused many times over.
There are a number of advantages to the low-code self-build approach, including that it leverages the technical skill and knowledge of the treasury team to build and deliver treasury-specific apps. When other functions are brought into the development process, low-code projects can leverage their technical skills and knowledge, too.
If enough people have knowledge of the low-code approach, and can secure management support, ideal automation solutions, process optimizations and efficiencies can be created much faster. Treasurers and other corporate professionals can then begin actively supporting their organizations’ Digital Transformation with the exact tools they need.
While IT may still retain final control and oversight of any live system, inter- and intra-departmental development of simple process automation tools frees up specialized developers in IT to work on more complex tasks.
It is worth exploring some of the treasury-specific use cases for automation that are helping teams to meet their key challenges in 2023 and that can be addressed with a low-code platform.
An EACT survey published last year found cash flow forecasting is a top-three issue for 68% of treasurers, with rising global inflation and interest rate increases contributing to the problems. Low-code applications can enable treasurers to automate daily cash reconciliation, bank balance reporting and other parts of the cash management process. Not only can treasurers remove repetitive time-consuming work but they can also access real-time dashboard information to help make timely decisions.
Treasuries are also currently highly sensitive to the exposure of their balance sheets to rapid changes in interest rates, currency fluctuations and commodity and supply chain risks as global financial conditions continue to decline. There is a low-code opportunity here to leverage more strategic and systematic options for currency hedging and take advantage of favorable hedging opportunities. Areas where low-code tools can yield the most benefit here include automating FX processes such as aggregating requests, initiating pricing requests and executing trade strategies based on favorable pre-designed parameters.
An additional area of focus is that treasurers often rely on time-consuming manual processes for business-critical tasks. For example, the collection and analysis of data for critical tasks, such as FX management, risk planning and merging ESG (environmental, social and corporate governance) reporting data.
Low-code-developed process management tools can be used to optimize these workflows, with treasurers able to choose from where data is automatically integrated in real-time. One possible outcome is automating management reporting – including automated data gathering, compilation and input into standardized reporting templates – which can be implemented incrementally across organizations to yield substantial efficiency gains.
