Corporate treasurers have said they're interested in a slew of cutting-edge FinTech solutions that experts believe will disrupt financial business management. Yet, a new report from the Association for Financial Professionals (AFP) warned of only minuscule adoption of these tools so far, a trend that analysts described as "troubling."
In its 2018 AFP Technology Survey, underwritten by corporate treasury management firm BELLIN, the AFP surveyed 708 corporate finance executives about their thoughts on adoption of technologies like artificial intelligence (AI) and blockchain. These professionals widely agreed that positive disruption is on the horizon as a result of FinTech.
There is a strong correlation between adoption of these technologies and recognition of the tools' positive impact on efficiency. For example, AFP looked at adoption rates for a range of technologies and found data analytics to have the most widespread adoption rate today, though only 16 percent of survey respondents said they have implemented data analytics extensively (and an additional 37 percent said they have to some extent).
That compares to just 5 percent of treasurers that have Internet of Things (IoT) extensively deployed. Substantial implementation rates were minimal for robotics process automation (RPA), machine learning (ML), blockchain, AI and cryptocurrencies, at just 3 percent or less, the survey found.
It is perhaps unsurprising, then, that the majority of respondents agree data analytics has a positive impact on efficiency, the greatest percentage out of any of the technologies analyzed. Yet, other tools with high expectations for boosting efficiency — including RPA (37 percent), ML (32 percent) and AI (32 percent) — show some of the lowest adoption levels in the survey.
"The gap between enthusiasm for emerging technologies and implementation is very troubling," said AFP President and CEO Jim Kaitz in a statement announcing the research. "These technologies are disrupting every organization, especially the finance function. If treasury and finance do not embrace these emerging technologies and implement them to help make their organizations more successful, they risk being left behind by innovators inside and outside their organizations."
According to the AFP, there may be a disconnect between what corporate treasurers expect in terms of positive impact from these technologies and what they actually get. When assessing how these professionals anticipated positive effects like greater accuracy, faster decision-making, cost reduction and streamlined operations, the survey found professionals expected these positive impacts prior to implementation more than they experienced post-implementation.
For instance, 45 percent said they expected greater accuracy when adopting these tools, yet only 32 percent experienced this positive effect when they adopted emerging technologies.
Furthermore, significant percentages of companies in the midst of adopting these tools are experiencing challenges, including a lack of adequate skills and technological resources. Nearly one-third cited the high cost of tech implementation as a top roadblock, as well as the steep learning curve and struggle to accurately assess return on investment (ROI).
All of these roadblocks amount to 15 percent of senior management having said they are unwilling to adopt these technologies, while 39 percent said they are only "somewhat" willing to endure the challenges of technology adoption. That's despite the majority of treasury and finance professionals who said they are prepared to implement these tools. However, when organizations do not provide adequate training, or a culture that embraces technological change, these finance professionals are less prepared to embrace these tools, the AFP said.
According to BELLIN CEO and Founder Martin Bellin, companies should not let the challenges of technology adoption overwhelm them.
"Embracing new technology can be daunting, but it is the only way forward," he said in another statement. "The world of treasury and finance has a unique opportunity to not just keep pace with new trends, but to be a driving force behind them."