Has the pandemic transformed treasury forever?

It’s difficult to remember what working life looked like pre-pandemic, but with many restrictions easing soon, it feels like we are closer than ever.

That said, our nine to five working day won’t necessarily return to what it once was. The pandemic has re-shaped the workings of entire industries and while restrictions are easing, firms are adapting to long-term trends born out of the past 18 months.

It’s easy to think that having to adapt to external circumstances will have a negative impact but many firms have used this opportunity to re-think and reset processes, and actually improve how they operate.

And this applies to treasurers too, who continue to make the most of the opportunities and tackle the threats from the pandemic, potentially transforming the treasury function forever.

The digital era has arrived

Treasury digitisation has come of age, with treasurers adopting new technologies and embracing hybrid working models.

However, it’s not been plain sailing and organisations have struggled. A recent survey revealed that one of treasurers’ main concerns is the digital transition.

Throughout the pandemic, organisations had to continue to provide all the essential services that clients expected, meaning they had to ensure they had the right IT infrastructure in place and the skills to use it. This was particularly difficult for SMEs who couldn’t afford the fully-fledged digital approach.

Furthermore, as cash was tight, organisations needed complete visibility over what payments are coming or being made to ensure they were placed to make better decisions and act strategically. 

This level of insight into an organisation’s finances is difficult to achieve for many businesses – different currencies are usually stored in siloed accounts with limited overall visibility.

This highlighted the need for better solutions and enhanced technology which innovative fintechs now provide. It is now possible to have a centralised treasury system, where analytics, cashflow and forecasting are all in one place to facilitate both strategic decision making and better cash flow management.

Efficiency is key

At a time when everyone must accomplish more with less, treasury teams need to find solutions that increase their efficiency through a mix of automation and improved interoperability.

Treasurers need to do more than automate the odd process. Buying your way out of a problem that has hampered corporate treasurers for decades is not the answer – it’s not the number of plugins, add-ons and systems that will bring corporate treasury into the twenty-first century, but the functionality, interoperability, security, and ease of use of a treasury management system.

Put simply, enabling treasurers to perform all their key functions without having to switch between different platforms and technology providers is crucial.

And so, in a bid to end the days of plugins tangles and convoluted processes, treasurers continue to seek vendors who can offer multiple services from one simple platform to save time and money and make their life that bit easier.

Growing cyber threat

While the pandemic and digitisation has bought some benefits, it also created a whole host of new risks.

Even in the years before the pandemic, SMEs were increasingly the target of cyber-attacks, mainly because of their often-weak technological defences. This report suggests that small businesses are the target of over 40% of cyber-attacks, with an average loss per attack of more than $188,000.

Digital processes have expanded the cyber footprint of firms, leaving them susceptible to attack from malicious attackers. This particularly affects SMEs who don’t have the resources to adequately defend themselves.

With heightened security risks, companies must be able to identify cybersecurity threats as part of their business continuity plans. There are several simple things businesses can do to protect themselves. 

A clear starting point is simply setting out a clear cybersecurity policy and ensuring everyone in the business is aware of protocols and best practices. This would also involve establishing clear rules on how devices are used, how teams share documents, and so on.

Tailored and controlled access can be another effective way of improving cybersecurity. By making this as granular as possible, senior managers can control the features their team members can access. If unauthorised access were to occur, it would make it easier for the security team to identify and address the source without the risk of system-wide contagion.

Light at the end of the tunnel

While some organisations were just trying to survive the pandemic, some used it as a time of reflection and improvement. The last 18 months have provided a chance to stop and rethink whether established processes are still fit for purpose in the digital and post-pandemic era.

There will be many lasting trends from the unprecedented restrictions and economic recession we have experienced. And I think the improvements we have made in digitising processes, improving efficiency, and strengthening cyber defences are commendable and, importantly, will change treasury forever.