Transforming Treasury with Artificial Intelligence

Treasury focuses on things that add value to the business, like working capital strategy, funding and liquidity strategies, more robust foreign exchange, and interest rate risk management strategies. AI can help with trading oversight by making it easier to monitor market volatility.

AI technologies promote and reinforce treasury as a strategic partner within the organization by enabling them to focus on the strategic and analytical activities that add real value to the business.

Evolution of Treasury and Treasury Software Systems

As companies realize the benefits driven by Artificial Intelligence in various domains, AI has become an essential technology for leading-edge enterprises around the world.

AI drives transformation across treasury in the following ways:

• Offers a quicker and efficient way to mine and analyze data
• Help identify trends and patterns
• Provides valuable and reliable insights for CFOs to make informed decisions
• Assists in effectively managing working capital
• Assists in FX risk management through proactive hedging

With more organizations recognizing the potential of data to drive business development and growth, expectations of finance are shifting. Teams are beginning to focus on activities like scenario planning and predictive analytics rather than simply reporting the numbers.

Spreadsheet-based Cash Forecasting Challenges.

The treasury department has the following challenges when forecasting cash flows with spreadsheets:

• Entirely manual and time-consuming.
• Prone to mistakes.
• Difficult to collect and combine the correct datasets.
• Necessitates a great deal of input and frequent human modifications.
• Low visibility into individual entities to detect variance.

How Artificial Intelligence helps Corporate Treasury

The majority of the issues associated with cash forecasting using spreadsheets are addressed by AI, such as:

• Increased accuracy: Cash forecasting accuracy is improved through a feedback loop model and frequent variance analysis. Accurate data boosts confidence in borrowing, investing, and M&A decisions, among other things.

• A broader scope of data: Drill-down capabilities into entity-level data improve granular visibility. Furthermore, teams can easily access data at any time without having to search through multiple spreadsheets and portals.

• Improved scenario analysis: Incorporating customer-specific variables and the ability to capture trends and patterns allows treasurers to capture ‘what-if’ scenarios. This allows them to devise strategies proactively and avoid potential financial issues.

• Cost and time savings: AI technologies can help in saving time and costs, streamlining routine processes, and releasing teams from administrative tasks to focus on higher-value activities that enhance their contribution across the organization.

• Greater ROI: AI provides increased ROI in the short term as well as long term with:
  • Decreased interest expense
  • Increased investment income
  • Freeing up resource bandwidth

Schedule a demo with us to learn how AI is transforming treasury and the process of cash management and cash forecasting.