The rise in B2B FinTech has complicated the picture of treasury management, forcing it to rethink its position in the enterprise. The more payment, cash management, cash flow forecasting, ERP and other digital platforms integrated, the more difficult it can be for a company to envision its own financial health across all of this data.
But that technology has also handed treasury new tools to become even more effective at giving clarity to an enterprise’s position in its market. The more data at a treasurer’s fingertips, the more accurate she or he is able to pinpoint a company’s cash position — and go further.
OpenLink Chief Technology Officer Rich Grossi told PYMNTS recently that modern treasury management demands added functionality like risk and trade management — especially for international conglomerates. OpenLink recently announced that it has combined these three offerings into a new cloud-based product, with cloud technology also being a technology Grossi said is one of several critical tools a corporate treasurer needs.
“What we’re seeing in the marketplace is clients that are looking — well, they’re looking to do a lot of things,” he said. “They’re looking to reduce internal management of infrastructure, they’re looking to centralize the support of their operations, they’re looking to better manage their costs and they’re looking for new technologies to manage operations.”
The energy and commodity trading spaces are two key targets for OpenLink, and the nature of these sectors — multinational, with complex financial processes — also means a treasury, risk and trade management platform needs to keep up. Risk, in particular, is susceptible to fast-moving market fluctuations. In the energy sector, companies need to be on their toes and have real-time visibility into market data in order to make decisions and understand their financial positions on a global scale.
“Within energy, commodities and logistics, some risk profiles could be financial in nature, some could be market risk, some could be credit and counter party risk,” Grossi explained. Cloud-based data management means getting a stronger hold on factors outside the enterprise — like the changing price of oil and what those price fluctuations mean for a company.
Companies don’t always have a tight grip on that, though, the executive said.
“What we find is a lot of clients out there have multiple systems to perform these capabilities,” he said, in reference to financial, trading and risk management systems. “And they have different systems across geographies.” There is no shortage of technology for companies in these areas today, but linking them together is a massive challenge, added Grossi, and can stifle visibility.
When a business goes international, that visibility worsens.
“Often we see large conglomerates, and even smaller ones, have separate treasury departments, and they don’t have insight into the overall positions of what their portfolio looks like, what their cash positions are,” he said.
It can harm a company’s ability to make the right decisions and stay safe at the same time — especially when it comes to transacting. So while companies that have multiple financial and risk management systems in place across multiple treasury departments in multiple global jurisdictions across the globe, technologies like the cloud and data management can bring it all together.
“There is constant communication between us and our clients around technology in the treasury space, and a lot of it deals with how they transact, how they manage communication and payments and cash,” Grossi explained. “In the treasury space, you also have security concerns, you need to make sure that communication of, say, a payment is as secure as it can possibly be. You get into some interesting conversations.”
He pointed to emerging technologies like blockchain that are also disrupting the way treasury management officials can conduct business in a secure fashion and on a global scale.
“It’s somewhat of an emerging technology and takes a different approach to managing security and communication in the transport of a payment and other types of data,” he said. “I think within the treasury space, the other big technological discussion is all around what to do with data — it’s more of a Big Data conversation.” Cloud, too, he said, enables a scalable and customizable way to offer a holistic tool for businesses.
All of that data has come from the innovative technologies conglomerates are adopting in troves. And all of that data, from risk management to accounts payable platforms, have created silos. Treasury management, Grossi said, is now capable of adopting technology to break down those barriers across enterprise systems and across the globe.
Source: http://www.pymnts.com – Payments
Treasury Finds Itself At Home In FinTech