Optimizing Bank Relationships Challenges the Real-Time Treasury Executive

A strong treasury department sees its banks not just as service providers, but as growth partners.

Against that backdrop, the digital transformation of the banking sector is increasingly reshaping — and enhancing — the operations of traditional treasury teams.

The global banking landscape has seen several changes in recent years. Regulatory reforms, the rise of FinTech and the accelerated digitization of financial services have all redefined how banks operate and interact with their corporate clients.

Traditional banking relationships, once characterized by face-to-face interactions and manual processes, are increasingly being replaced by digital platforms that offer treasurers real-time insights, automation and a broader range of financial products.

This shift has implications for the entire enterprise function.

An important part of treasury management has always been maintaining the optimal number of banking relationships. However, the definition of “optimal” is changing. In the past, having too many banking relationships could lead to inefficiencies, higher costs and complexity in managing multiple accounts and counterparties. Today, the concept of redundancy in banking relationships is being redefined to focus on strategic flexibility and resilience.

From real-time insights to intelligent cash flow forecasting and automated payments and reconciliations, the digitization of the banking landscape provides corporate treasurers — and their organizations — more opportunities to capture growth and mitigate uncertainty.

Read also: Treasury’s Digital Migration Creates Greater Synergies With Finance Function

The Future of Enterprise Treasury Is Redundant — in a Good Way

Redundancy is no longer just about having backup banks in case of a counterparty failure. It’s about creating a network of banking partners that can provide different capabilities and services, which can be tapped into depending on market conditions, regulatory changes or business needs.

This approach allows treasury teams to diversify their risk, access a broader range of financial products, and ensure that they can continue to operate smoothly even if one banking partner faces difficulties.

Where treasurers once relied on a few banking partners for a limited set of services, they now have access to a wider array of banks, FinTech providers and digital financial products. This expanded ecosystem allows for greater flexibility and customization in how treasury functions manage liquidity, hedge risks and optimize working capital.

For instance, partnering with banks that specialize in different areas, such as trade finance, foreign exchange or digital payments, can help treasury teams optimize their operations and tap into growth opportunities.

“Many treasurers are thinking, ‘Well, how can I extract that last ounce of juice from my financial ecosystem?’” Ambrish Bansal, global head of Liquidity and Cash Concentration Products for the Citi Treasury and Trade Solutions business, told PYMNTS this month.

“I see the role of treasury becoming more central to [the enterprise’s] business strategy, to the growth strategy, to the expansion strategy — and quite frankly, to the sustainability strategy,” Bansal added. “The treasury team plays a pivotal role.”

See also: Unlocking the Critical Role of Treasurers in Corporate Decision-Making

From real-time payments and innovative settlement solutions to artificial intelligence-driven cash forecasting and supply chain financing platforms, treasurers now have access to tools that can enhance their ability to manage cash flows, mitigate risks and support business growth.

Treasurers today must be more agile in decision-making, Claudia Villasis-Wallraff, head of data driven treasury at Deutsche Bank, told PYMNTS in June.

“Companies need to adopt new technology,” she said. “And with this, I not only mean adopting API connectivity, but also cloud functions and artificial intelligence.”

“Shareholders and the C-level are going to start asking more and requesting more from their treasury teams,” she added.

Looking ahead, the ability to create operational cash flow forecasting without manual intervention will be a game changer for treasury teams, she said. This automation can streamline treasury operations, allowing treasurers to focus on more strategic tasks.

One of the most impactful innovations across the corporate back office has been the rise of real-time treasury management systems. These platforms integrate with multiple banking partners and financial products, providing treasurers with real-time visibility into their cash positions across accounts, currencies and regions. By using real-time data, treasurers can make more informed decisions, optimize liquidity management, and work to reduce the cost of borrowing.

With this knowledge at their fingertips, forward-thinking treasurers will be expected to act as strategic advisors to their organizations, using their insights into the financial markets and their understanding of the company’s financial needs to drive growth and operational efficiency.

This view is supported by the latest PYMNTS Intelligence, which found that 77% of treasurers said at least one department in their organization would benefit from closer collaboration with them.

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