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The beautiful prism: how cloud is taking treasury to the next level

Treasury is moving to the cloud, allowing new levels of automation, analysis, and business integration. As an early adopter, Pearson’s James Kelly offers tips for his peers considering the move.

Most treasurers don’t have the luxury of jettisoning their legacy systems overnight, so finding creative ways to push forward innovation is vital. One key step is moving to the cloud. SaaS solutions for ERPs, TMSs, FX risk management and a number of other key treasury functions are fast becoming must-haves. Another significant milestone is the adoption of automation. Powerful, cloud-based tech can streamline workflows, creating efficient, accessible, and responsive digital treasury operations.

The use of next generation technology is increasing, along with higher levels of automation for everyday transaction types. System adoption for storing data is also accelerating, from banking systems to treasury management systems. As cloud adoption becomes widespread and proven, integration has become relatively low cost and low maintenance.

One company that recently made the move to the cloud is Pearson, the world’s leading learning company. According to James Kelly, SVP Treasury, Risk Management & Insurance at Pearson, the majority of treasuries now have excellent access to real-time market data via software but there is also a lot more automation that could be adopted.

For example, notes Kelly, machine reading doesn’t currently feature heavily in treasury applications. But a look at the legal profession – where there has been significant and successful use of machine reading – shows its potential. In treasury, there are interesting opportunities for intelligent filing and categorization, and a natural expansion from automated workflow processes to automation of smaller, ad hoc tasks. Chatbots are increasingly popular for dealing with regular requests, such as policies, currencies or sign-off. All of this creates a more responsive treasury and a better user experience, while taking some of the pressure off operational teams.

Pearson’s digital journey

Pearson has an extensive technology stack with the City Financials Treasury and Risk Management system from ION Treasury at its core. Built with a large number of automation features, there are models and templates for almost every transaction type. With all the accounting and transaction flows automated, Pearson can drive forward data and process quality with minimal intervention, aside from approval and checking. The team also uses a SWIFT Bureau via Bottomline, Cashforce for cash flow analysis and forecasting, Bloomberg for market data and transaction execution, and a variety of different reporting systems.

Kelly notes that cloud technology brings vital structure to Pearson’s treasury function. “With so many different currency groups, pools and territories at Pearson, aggregation tools make life a lot easier,” he says. Combining the accessibility and scale of cloud technology with an automated decision-making platform, Pearson can automate many complex transaction types that were previously done manually.

“We have 600 bank accounts to manage and 300 that are on our systems. This means there are lots of different permutations to manage,” says Kelly. “Different currency groups, different pools, different territories. So, we look at how we can make life easier to do the hard stuff. And the way to do that is to have really good aggregation tools and good ways of looking at the data.”
There are several key considerations where adopting technology to take treasury to the next level. “The most important step is to listen – anyone in treasury will know where the pain points are,” says Kelly. “Consider your priorities, start small and build from there, focusing on ‘the art of the possible’. A lot of treasury management systems have great tools but understanding them is vital. Sit down and talk to your tech vendors about your vision for digital. Finally, talk to others using the same tech as you. Learn from them and you’ll achieve a relatively easy implementation.”

Digital transformation brings the potential for optimized decision-making to your fingertips. Patrick Cannon, EVP, Reval and Treasura Product Lines at ION Treasury, summarizes the huge advantages of tech adoption and cloud software: “Data and automation are key. Accessing large amounts of data and being able to use it effectively enables treasury to move your business forward and support your policy requirements with ease. And above all of that, a cloud solution drives efficiency and collaboration across your teams, so you can maximize the focus where you want it to be.”

Moving to the cloud is transformative – and there are exciting possibilities ahead for treasury functions and solutions. Robotic Process Automation (RPA) and similar technologies have moved from simply replicating previously manual processes to providing finance staff with individual assistants and integrating machine learning to supply smart analytics, as well as simple automation. There’s lots of talk around which tasks can be handled by robots, and AI algorithms. Going further time series modelling and more BI tools are being included. “The beauty of automation is that you can look at everything through so many different prisms,” says Kelly.