Digital Transformation of Treasury is based on a series of in-depth interviews conducted in May/June 2020 with senior treasury executives from around the world. That research is supplemented with data from a survey of 130 senior corporate treasurers conducted in August 2020.

Survey respondents were drawn from four regions (Europe, the Middle East and Africa, North America, Asia Pacific and Latin America) and a broad range of sectors, including Industrials (25%), Information Technology (13%), Financials (12%), Consumer Discretionary (11%), Healthcare (8%), Energy (7%), Materials (7%), Consumer Staples (6%), Real Estate (5%), Telecommunications (3%) and Utilities (3%).

Executive Summary

The first chapter of the paper explores how treasurers are using data to become informers, rather than inheritors of business strategy, while the second chapter evaluates the impact the pandemic has had on the digital transformation of treasury. Chapter three digs deeper into the question of data, and how through new technologies such as application programming interfaces (APIs) and machine learning (ML), it can be used to super-charge traditional treasury disciplines like cash forecasting and risk management.

Chapter four recognises that while treasurers have faced challenges around legacy issues such as ‘wet signatures’ and integration of treasury systems with enterprise resource planning systems, the research shows that progress is being made. Finally, the paper explores how virtual accounts and in-house banks are rationalising account structures, while the emergence of fintechs is also broadening the services on offer to corporates.

Key findings:

  • The crisis has highlighted treasury’s strategic importance, particularly its roles in liquidity and risk management. More than half (56%) are involved in their companies’ strategic shifts or changes in business model from the outset.
  • Superior visibility of cash has helped companies gain invaluable flexibility over raising capital in stressed conditions. So it’s unsurprising that treasurers regard data accuracy and availability as one of their two most important challenges. Nearly 60% cite it, ahead of traditional treasury tasks such as optimising working capital and cross-currency management.
  • Almost every interviewee describes how the pandemic accelerated their digital journey, even as they managed increases in market, counterparty and supply chain risk. This is echoed by survey respondents, with 56% encouraged to accelerate their digital transformation by the pandemic.
  • Greater availability of data and superior analysis tools are seen as a way to super-charge performance in traditional treasury disciplines like cash forecasting and risk management of currency, interest rate and other exposures. 40% of companies are exploring initiatives to enhance their data capabilities, while a further one-third have already invested significantly in these. As a result, the ability to query and analyse data is likely to become a key skillset for treasurers at all levels.
  • The crisis has provided impetus to the adoption of new technologies such as APIs, robotic process automation (RPA) and machine learning (ML)/artificial intelligence (AI): for example, almost 80% of companies have either implemented APIs already or are looking to use them in the future and treasurers are strikingly positive on the potential of ML and AI; 66% expect these technologies to transform treasury practice in the coming years.

J.P. Morgan is a trusted partner of corporate treasuries globally as they navigate this new digital landscape. Read about how we helped our client Autoneum to build a real-time treasury system with APIs

To learn more, please contact your J.P. Morgan representative.

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