Getting Treasurers To Dump The Swivel Chair For Tech

When it comes to data, beware the swivel chair. But embrace integration.

That’s a metaphor, of sorts, and a caution for treasury management professionals as they navigate their swivel chairs, swiveling between spreadsheets on their desks, computer screens on desktops and even apps on their phones and tablets. Simply put, CFOs are juggling multiple founts of information, coming from internal and external sources, in real time.

But navigating through all these data points can be a challenge, where speed and efficiency are paramount and the only constant in business is change. And change is hard, always — made a little easier by integration and, done well, a 360-degree view of a company and its environs.

In an interview with PYMNTS, Ross Garrett, VP of Marketing at Cloud Elements, said “many businesses are demanding that all of the products and services they use are integrated together so they can get a holistic view across the business … we are moving away from siloed products and services to fully integrated products and services.”

That expectation has been driven, in part, by various market segments. Whether it’s in the sales experience that comes from omnichannel or in the world of supply chain or even human capital management, there’s a need for integration comprehensive enough so executives don’t have to switch context between applications.

“The world of swivel chair management from one product to another has gone away, or at least it is starting to go away,” he told PYMNTS.

In many cases, Garrett said, Cloud Elements’ customers tell the firm they simply lose business, or prospective customers go elsewhere, unless they provide out-of-the-box, integrated solutions that customers now expect.

Nowadays, professionals are familiar with collaboration tools such as Slack, to use just one example posited by Garrett. “Slack is all about communication, but it has tight integration into lots of things,” he said, such as being able to synchronize tasks and data between Slack and Salesforce or with social media or other collaboration tools. “Slack has made a user experience that is easy … to integrate other products and services into their platform” with one-click integration sans specialist knowledge.

Talking about treasury, innovation and evolution, Garrett stated that “there has been far too much manual processing between the domains of payments processing, or accounts receivable, and the back-office systems used by organizations.”

“Not only is it manual and costly, it is also error-prone, and it means businesses are not able to react in real time to events,” he added. Consider the fact that CFOs must wait for a monthly reconciliation of data, or the fact that information is presented in a batch format. “That’s a real challenge, because you do not have the visibility and oversight that you need across receivable operations,” Garrett explained.

For the CFO, and for treasury management in general, the role, he said, has become far broader, and the CFO has responsibilities that range across the business.

They need to be able to report on the status of the business and, of course, have access to the data that will make reporting holistic and regular.

In an example, he noted that if a payment is typically five days late from a certain customer, there is no need, then, to proactively come to that customer on day two or three, because there is the knowledge that a late payment can be expected. Conversely, if an account is usually paid within three days of the due date but is now 15 or 30 days late, that would be reason enough for a follow-up. Reports are backward-looking. But getting the minutiae of the operations requires being backward- and forward-looking.

Data cited by Cloud Elements reveal that the majority — more than 90 percent — of large banks believe integrated treasury management is important to future growth. At the same time, however, even though 42 percent said they wanted to implement such solutions, only 1 percent had done so. Why the disconnect?

Said Garrett, among the surprises from Cloud Elements’ research was the continued reliance on what he termed were “offline mechanisms,” ranging from paper checks to other traditional payments rails. “That surprises me,” he said, “because there is so much opportunity to make business more efficient.”

Finding a solution provider who can provide integration services, he said, requires different skill sets across a changing technological landscape, especially between a bank and a merchant customer, said Garrett.

The technology and legacy systems that are in place at those banks may no longer be sufficient. “Integration has been changing,” said Garrett, likening the process to “one of those areas that continues to evolve … across a wide range of functions and products.” Thus, the onus must be to serve business users rather than technical users.

This technology, he continued, needs to “scale up for customer-facing use cases. For many organizations, integration has been focused on internal IT problems, and, when presented with new product ideas or the need for better customer-facing integration, the answer has been a resolute ‘no.’ ‘No, that’s not secure’; or, ‘No, there’s no easy way to integrate these systems.’” Now those same IT professionals must think differently about integration, partner with product teams and seek out solutions (such as those from Cloud Elements) that make integration suck less!

One thing is key: Don’t settle. There’s a cost of inaction, to the tune of $1.2 billion, tied to the entrenched processes of using siloed receivables and payment processing systems. The long-reaching effect is that inefficient integrated systems can cost as much as $630 million in decreased customer adoption of electronic payment options.

“Traditional banking providers have enjoyed a slower pace of disintermediation over the past couple of years,” said Garrett. But with massive investments from venture capital in the FinTech ecosystem and newfound inclusiveness on the part of regulators, it’s clear these new digital products will not only compete with, but in fact shape the future of the banking industry.

Thus, the scales have tipped “more toward doing something versus nothing, and luckily this newfound need can be met with advances in cloud adoption, awareness of cloud security and the capabilities of cloud-based integration. Amid that backdrop, time is, of course, a big factor. When it comes to integrated treasury solutions, Garrett concluded, what was “true two years ago is no longer true today.”