Treasurers can reduce tedious tasks by implementing digitized solutions that automate routine processes. This allows increased focus on more strategic aspects such as cash flow optimization and risk analysis. Information should be available when it is needed and obtaining it should not be resource or time intensive (with no extra work – or phone calls to the bank – required).
Thankfully, improved technology allows for the automation of treasury workflows. In this article, we’ll review the top five advantages of digitizing your treasury operations and how to select a modern banking provider that eliminate these tedious steps.
Top five advantages of fully digitized experiences
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Ability to operate proactively vs reactively – and to optimize your working capital
Digitization provides real-time visibility into critical transaction information such as account balances and payment statuses. This increase in real-time visibility enables treasurers to understand where they stand and their greatest priorities for the business.
It can also help treasurers shift from operating reactively with their operations to taking a proactive stance, allowing for easier optimization of working capital.
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Substantial cost savings
While digitizing your operations may be costly in the beginning, it can yield substantial savings long-term, e.g., transitioning from checks in favor of ACH. The 2023 AFP Payments Cost Benchmarking survey highlighted the median cost for ACH transfers to be between 26 cents and 50 cents. This is substantially less than the cost of using paper checks, which range from an issuing cost of $2.01 to $4.00 and process and deposit costs of anywhere from $1.01-$2.00[1].
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Decrease likelihood of user error
Reducing manual tasks can free up your team to focus on activities that can positively impact the business and improve the overall user experience. For example, the ability to automate the account opening process can reduce a long list of manual tasks and the risk of user error. It can also help strengthen the existing control environment.
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A better banking experience for vendors and customers
A fast response time is an important attribute for an optimal customer experience. Investigations around issues like fraud (that can take anywhere from one to 60 days to resolve) to reaching debit caps (which can take anywhere from 30 minutes to six hours to resolve) can cause significant lag time and add friction to transactions and overall liquidity. Increased digitization can cut down these times significantly and facilitate frictionless transactions.
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Never need to call your bank’s customer service department again
Having to call the bank has been the de facto process for corporate treasury teams for everything from searching for a payment’s location to resolution updates. By eliminating this step, treasurers can expedite their end-to-end payments journey and experience more agency in the overall process, improving their day-to-day experiences by facilitating fewer pain points and frustrations.
Checklist of what to ask your Cash Management bank to determine if they’re a modern provider for your treasury operations
Here is a list of questions that can help you determine whether your banking institution is the right fit for your operational needs.
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Do they put the client first?
Does their platform place a focus on the client or client needs? Do they place a premium on client feedback and use that as a main principle for building the product? Or are they mainly focused on trying to sell as many products as possible? A main indicator of how much they value clients is by reviewing their overall user journey. It should ideally be simple, transparent, and intuitive. If you notice that it appears outdated and manual or, on the flip side, sleek with no substance, it may be time to consider another solution.
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Do they prioritize automation?
Keeping automation at the forefront of the platform is key for improving everything from Straight Through Processing (STP) to the overall client experience. Does your provider believe automation is necessary from an operational point of view and dedicated to incorporating it throughout the user journey? This can be valuable not only for your experience, but also for reducing risk. Anytime a human element is introduced into the process, the likelihood of mistakes occurring increases, such as entering the wrong account number into a payment instruction, accidentally canceling a payment, or releasing a future validated payment.
Automation can help reduce this risk for the bank and the client at the same time. It provides a secure environment from an operational lens which can also improve the client experience and encourage the client to continue transacting with the bank.
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Do they offer metrics that actually matter?
If you look at the industry, everybody has a shiny new dashboard or metric that they're trying to sell. But are they providing tangible value? Instead of being enticed by slick marketing tactics, look deeper at the level and quality of the data that the metrics provide. Examples of helpful transaction data could include details like:
- Number of wires processed
- Number of wires settled STP
- Number of wires that didn’t settle STP
- What you need to do to change it
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Do they place an emphasis on agile finance?
Are agility and execution speed top of mind for them? Sample indicators of this are cloud-native processes with microservices that can identify and leverage APIs. This can encourage faster problem solving, a critical feature that some banks aren’t able to offer owing to the complexities of their legacy infrastructure. The right data and real-time analytics can foster a stronger business relationship and encourage a best-in-class client experience, ensuring that wires are securely delivered from point A to point B within seconds.
New technologies are ushering in the next evolution of banking digitization and client experience. By teaming up with the right banking provider, you’ll have the opportunity to transform your treasury operations, eliminate time-wasting tasks, and introduce a better way for your Cash Management needs.
[1] 2022 AFP Payments Cost Benchmarking Survey (afponline.org)
