Treasury Hyper-Automation: The Future of Financial Operations
In a hyper-automated treasury, the traditional functions of the treasury – such as payments, cash management and investment operations – are entirely digitised and automated. Financial operations occur in a virtual environment, with all key processes running smoothly and efficiently behind the scenes. This allows businesses to optimise liquidity, reduce costs, and improve overall financial performance.
But is this really new? Many companies have tried to build similar solutions in the past but failed. So, what has changed now that could make Hyper-automation a success? This article will discuss the technology behind Treasury Hyper-automation and its real-world applications.
How does Hyper-automation work?
The answer lies in the technology that is available today. Hyper-automation requires several different technologies to work together seamlessly. These include:
- Robotics: to automate the physical tasks involved in a process
- Machine learning: to learn from data and improve the accuracy of automation
- Natural language processing: to understand human language and communicate with humans
- Intelligent chatbots: to provide a natural way for humans to interact with hyperautomated systems
These technologies are now available and have been proven to work together effectively. This means that Hyper-automation is now a realistic option for businesses that want to improve efficiency and reduce costs.
Treasury Processes Automation (TPA) solutions
According to Atel Treasurer: TPA “should digitalise, sanitise and aggregate internal and external relevant pieces of information, from several sources, to automate tasks that are still very much manual, like reconciliation, cash allocation, payment orchestration, detailed booking, cost control, regulatory and compliance reporting, or cash-flow forecasting, IFRS reports, stress-testing scenario, etc.” Common buzz words used are “hyper-automation”, “intelligent”, and “autonomous”. But what do they actually mean? These terms are used to articulate the next generation of TPA systems. The aim is to abandon legacy systems in pursuit of more modern technologies. This next-gen tech goes beyond basic RPA through the use of Digital Contracts, Machine Learning and AI. Hyper-automation spawns a range of benefits, including real-time data and reporting, and easy deployment and scalability of operations thanks to low-code technologies. One way to implement a TPA system is through an Autonomous Banking Platform.
Virtual Account Management
Fennech delivers an Autonomous Banking Platform (F³) for finance, treasury and payments. Central to F³ is our Virtual Account or V-Account solution.
Virtual Accounts or Virtual Account Management (VAM) enables companies to streamline their payables processes and improve efficiencies by consolidating multiple payment streams into a single virtual account. VAM also provides greater visibility and control over cash flow and can facilitate reconciliation and internal accounting.
When using VAM, companies can make payments to suppliers through a single virtual account rather than maintaining multiple accounts and making separate payments for each supplier. This can streamline the payables process and reduce accounting and administrative costs. In addition, VAM provides greater visibility into cash flow, as all payments are made through a single account. This can help companies better manage their finances and make more informed decisions about treasury. VAM can also facilitate reconciliation between a company’s books and its suppliers’ records. By consolidating all payments into a single account, companies can track expenses and match them to invoices more efficiently. This can save time and improve accuracy when reconciling accounts.
The Fennech Engine
Fennech‘s V-accounts draw on the Advanced Reconciliation Manager and Auto-payment features of the F³ platform. F³ matches payment activity to the underlying entity regardless of which bank account the payments were booked on. Unlike a virtual IBAN or payer ID solution, there is no need to ask counterparties to change how they make payments. The Advanced Reconciliation Manager matches payments on the bank account to receivable positions using a wide range of data points to build the cash position on the V-account. V-accounts can be maintained for legal entities, such as companies, business entities such as product lines, project codes and cost centres or any organisational unit that requires an overview of its cash liquidity. These structures can be maintained in parallel, so one team in finance may get a legal entity view, whilst business management may get a view based on product lines.
Fennech in motion
Fennech is committed to helping companies automate their treasury and payments operations. Our Autonomous Banking Platform can benefit companies by streamlining their payables processes, improving visibility into cash flow, and facilitating reconciliation. Please contact us if you want to learn more about our platform or virtual account management. We would be happy to discuss how we can help you automate your treasury and payments operations.