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How can big data help treasury thrive?

Matthew Key

The new era of data-driven insights aids efficient and confident decision-making in important treasury functions, including managing risk, detecting fraud and maximising working capital opportunities.

Matthew Key, Head of Customer Innovation, Financial Services, BT, tells us how.

Tech-driven insights

In a world of rapid change, treasury decision-makers need to act quickly and with confidence. According to Matthew, the era of technology that’s now emerging will help them do just that.

“I see a range of technologies breaking through that enable faster and more insightful information,” he says. These relate to the types of decisions typical for treasury, such as managing risk, detecting fraud and, above all, how to manage working capital for short- and long-term gains.

Innovations in big data, artificial intelligence (AI) and payment technologies are all helping to create a future of data-rich, fast and efficient decision-making for treasury. Even blockchain could play its part.

Matthew Key

How big data helps treasury

Big data is an obvious starting point. It’s not new, but Matthew says, “There have been big step improvements in the ability to analyse big and unstructured data much more quickly than previously, helping treasury track risks, for example.” As usage increases, so too will the speed and level of insight.

“Data around commercial payments helps create a fuller picture.”

Data around commercial payments also helps create a fuller picture and improve decision-making abilities. Embedded controls in virtual card technologies such as Precisionpay, for instance, generate new depths of data on suppliers, payment terms and spend. As well as helping the business eliminate uncontrolled spend and reduce fraud, it gives treasury insight into where the potential risks lie and where payment delays may occur from false claims. It’s then information treasury can leverage to carry out its primary responsibility – that of managing working capital to benefit the business.

By analysing data in different and quicker ways, AI is another emerging tool able to inform corporate treasury functions. “One AI example I’ve seen is anomaly detection around a currency,” says Matthew. “Risk falls under the treasury function, as do currencies, so these tools exist and will only grow over time.”

Presentation is key

How data-rich information is presented to treasurers is also poised for a step change. Visual analytics that simplify complex information flows are improving all the time to present data in almost real time. As an innovation, it can provide new ways for businesses to derive insights and make decisions with confidence. Matthew says insurance – where much of the activity is in looking for anomalies – is one sector waking up to the potential of visual tools. Integrating payments data into a visual dashboard would be a logical step.

Fast-forward to blockchain

The most forward-looking technology for treasury is blockchain. Matthew believes its adoption by treasury could be five years away once the current hype calms down, but the case for how it could benefit is already building. “With a blockchain architecture, there is proof of transactions, which is why it’s been quite popular with some leading banks in international payments, for instance. It’s an instant verification of a transaction into a permanent record, which can be disclosed immediately to other parties, such as a regulator or auditor.

“The most forward-looking technology for treasury is blockchain.”

As a result, it speeds up the process and helps with settlements.” With digital currencies on the horizon, blockchain’s relevance for treasury could also be significant.

Ultimately, if treasury engages with new technologies, its responsibilities in the business will grow. “Treasury has a good view of how the organisation works, and likely risks, because of where it sits. Adopting new tools will make the function more open and will stretch its influence. It goes hand in hand with security functions.”

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