Even in February, the world and market were already uncertain, between Brexit, Trump, trade wars and global warming. Lutz said that staying relevant in a changing world is probably the biggest challenge overall, as the expectations for treasury today is very different than it was 10 or 20 years ago, and it’s changing more every day.
“As technology grows more sophisticated, the entire finance team has to change more to a strategic mindset,” he said. “Keeping up with all the changes is a full-time job already, because the pace of change is so rapid and there are so many moving parts.”
Legal and regulatory requirements also can be onerous for corporates. To bank in multiple regions or countries takes a significant investment in both time and resources. Most companies choose to outsource these functions to experts like Fides, so they can devote their time to their own business responsibilities.
Even with the corporate-to-bank landscape being changed by PSD2, open banking, and future regulations and technology innovators, Lutz predicts that multi-bank connectivity will remain complex — and perhaps become even more so due to the lack of global standards. Simplifying this complexity will remain a challenge for treasury.
“Despite the promise of SaaS solutions, blockchain, AI/machine learning, and APIs, the fintech market is far from maturity yet,” he explained.
Lutz said that in organizations working with more than a few banks, up to half of a treasury analyst’s time can easily be spent just on bank statement reconciliation — even with a TMS or ERP system in place. Yet without processes streamlined through automation, there’s still a significant reporting lag time. This lag increases the likelihood of inaccurate cash positioning as well as the cost of refinancing. It also means that it will take the organization longer to detect or mitigate potential fraud.