EuroFinance

At the 2023 EuroFinance International Treasury Management, treasury leaders from the drink and brewing giant, Anheuser-Busch InBev, the  conversational commerce (convergence of messaging and payments) company, CM.com, and the German online retailer, Zalando, discussed the interplay between corporate treasury and technology.

Technological influx and its ramifications

In today’s dynamic financial landscape, the tidal wave of technological influx is reshaping the traditional norms, bringing both transformative possibilities and novel challenges. This surge isn’t merely about the introduction of new tools or platforms, but rather about a profound alteration in how treasuries operate, interact, and deliver value. 

Dave van der Zwan, Head of treasury at CM.com, provided an in-depth perspective on this subject. At its heart, technological evolution is characterised by the sweeping influence of real-time data. This is a marked departure from the earlier legacy systems which operated on batch processes, delayed feedback loops, and manual interventions. Today’s real-time data frameworks allow treasuries to make instantaneous decisions, backed by up-to-the-minute insights, which not only enhances efficiency but also reduces risks associated with lagging information.

Further magnifying this transformation is the emergence of blockchain technology and AI-driven systems. Blockchain, with its decentralised and tamper-proof ledger systems, promises to inject unparalleled transparency and security into transactional processes. No longer do treasuries need to grapple with issues of trust or intermediary delays; blockchain offers a direct, verifiable, and immutable record of all transactions. Meanwhile, AI-driven systems bring the advantage of predictive analytics, automating routine tasks, and offering insights derived from complex data sets that would be impossible for humans to analyse in real-time. 

However, as van der Zwan was quick to emphasise, this technological tide isn’t about replacing the human element. “While the tools of the trade might change, the significance of skilled professionals remains undiminished… In fact, their roles are set to evolve.” van der Zwan told delegates at the conference. “Where once a professional might have been required to manually process data or validate transactions, in the future, their expertise might be redirected towards strategy, interpretation of AI insights, or overseeing the seamless integration of new technologies.” he further elucidated.

AI in Treasury: A cognitive revolution

AI’s integration into treasury functions marks a significant cognitive leap in data processing and decision-making capabilities. Tinatin Biganashvili, team lead for ERP core solutions, at Zalando, revealed the depth of AI’s impact. She explains, “AI is a software that mimics the way humans think, tackling complex tasks like analysing, thinking, reasoning.” This capability is a major departure from traditional methods, which often rely on manual interventions and delayed feedback loops.

Zalando’s early adoption of AI for critical tasks such as fraud detection and algorithmic pricing demonstrates the technology’s potential. AI’s ability to learn from data and identify patterns makes it an invaluable tool for detecting anomalies that could indicate fraudulent activity. This proactivity in risk management is vital for treasury departments, where quick identification of irregularities can prevent significant financial losses.

The efficiency of AI in Zalando’s operations extends to areas like invoice identification and transaction monitoring. As Biganashvili notes, “When an invoice comes in, the system recognizes what type of invoice it is, checks the data, and proposes where it has to be posted.” This automation of repetitive tasks not only speeds up processes but also reduces the potential for human error.

Moreover, AI’s role in transaction monitoring, especially for compliance purposes, is a game-changer. Biganashvili explains, “AI helps us close some of the cases without additional human interaction,” especially in the context of anti-money laundering requirements. This demonstrates AI’s ability to make preliminary decisions, thereby streamlining compliance processes.

Harnessing fintech for tangible solutions

Within the corporate treasury, fintech is a transformative force, redefining traditional banking practices by addressing modern demands. Anheuser-Busch InBev is at the forefront of harnessing fintech’s potential, as demonstrated by their collaboration with innovative partners to meet sustainability goals. Noah Faase, speaking from Global Treasury at the company, underscores one such commitment: the direct engagement and empowerment of farmers they work with. A key sustainability aim for Anheuser-Busch InBev is ensuring that these farmers are skilled, connected, and financially empowered.

Enter a fintech whose approach to Anheuser-Busch InBev was underpinned by a deep understanding of the company’s sustainability targets. With a specialisation in providing blockchain solutions, this fintech offered a mobile-based system to financially empower smallholder farmers in East Africa. Faase highlights the unique challenges of the region, where transactions are overwhelmingly cash-based. The arrival of barley trucks in these regions often meant farmers would leave with substantial cash amounts, posing significant safety concerns. The fintech’s solution allows farmers to receive credit directly on their phones, ensuring they can convert it into cash at a time and place of their choosing, adding an essential layer of security to their transactions.

Fintech’s versatility is evident in its ability to adapt to specific regional and cultural nuances, making it a powerful tool. It not only ensures transactional safety and convenience but also paves the way for collaborations between giants like Anheuser-Busch InBev and innovative start-ups. The mutual growth and shared visions cultivated through such partnerships have driven the company to launch a sustainability accelerator.

The crucial role of due diligence in tech adoption

However, as Anheuser-Busch InBev expands its fintech partnerships, Faase underscores the importance of due diligence. It’s essential to evaluate the technology’s synergy with existing systems, establish trust in the fintech entity, and ensure its alignment with the company’s overarching objectives. This careful balance is vital: innovation, while pivotal, should align seamlessly with security, compliance, and the broader company aspirations.

Yet, the challenges in due diligence don’t end there. With many tech solutions, especially newer entrants in the market, there may not be a lengthy track record to evaluate. Here, organisations have to adopt a more agile approach—perhaps starting with pilot programs or test cases in controlled environments to ascertain the tech’s real-world efficacy. This “start small and scale” approach allows organisations to mitigate risks while also learning and adapting in real-time.

Furthermore, due diligence also has a forward-looking component. With technology landscapes continuously shifting, it’s vital for businesses to assess not just the current relevance but also the future adaptability of a solution. Questions arise: How will this technology evolve over time? Is there a roadmap for updates or upgrades? How will it respond to the future challenges or shifts in the market?

Embracing the future: The road ahead

Wrapping up the panel’s insights, the resounding message was clear: change, while inevitable, presents a landscape teeming with opportunities. The digital tools of today, be it AI, blockchain, or real-time analytics, hold the potential to elevate the stature of treasuries. Instead of being relegated to mere transactional roles, there’s an opportunity to metamorphose into strategic business entities that drive tangible value.

As Faase aptly summed it up, the onus is on treasuries to remain agile, adapt, and evolve. The tools are available, and the landscape is ripe with possibilities. However, navigating this terrain requires a continuous commitment to learning and an unwavering willingness to adapt.

In essence, as the digital tide rises, it brings with it challenges and opportunities. For treasuries willing to adapt, the future promises a horizon filled with possibilities, efficiencies, and growth.