The Promise of Real-Time Treasury Management

Emerging technologies like APIs, robotics, AI and visualization are setting the stage for faster, smarter decision-making

For many businesses, simply making a payment is anything but simple. Processing a single payment can involve multiple accounting systems, repetitive data entry, multiple levels of approvals and limited access to data. Because of this, it is nearly impossible for a company to take an in-the-moment snapshot of its cash flow.

As the industry moves toward real-time treasury management, this fragmented and duplicative process would ultimately become obsolete. In its place, we’ll see the rise of a connected network of systems, automated cross-system processes and artificial intelligence and analytics that capture the value of data no matter where it is entered. Treasury managers will have the real-time insight and information to steer their organizations toward smarter and faster decisions. 


Going From Ad Hoc to Real Time


Today, the typical treasury management system relies on a mixture of ad hoc processes and basic automation. Treasury professionals still manually log on to bank portals and perform cash flow analysis using spreadsheets. And they are limited to rigid automated processes such as prior-day reconciliation and end-of-day cash sweeps. With real-time treasury management, they will have access to anytime bank reporting and true electronic bank account management.

The fundamental building block for these changes is a technology called an application programming interface, or API. Perhaps the best way to think of an API is as a prebuilt, plug-and-play software program that connects one system to another. 

APIs are everywhere in our daily lives. They serve as connectors between multiple apps on our smartphones—for instance, APIs can enable us to find directions (provided by one app) to a highly-rated restaurant (whose rating comes from another app). Because these two apps can “talk” to each other via the API, the experience can become more seamless.  

APIs in treasury management aren’t widely used yet, but as they gain traction, the impact could be dramatic. An API from a bank that connects to an enterprise resource planning (ERP) system or treasury management system (TMS) will allow the real-time flow of information in both directions. In this case, you would always know your current balance. And you would be able to initiate a withdrawal within your TMS.


Add Robotics, Machine Learning and Visualization


The real-time data flow that APIs make possible sets the stage for changes that could utterly transform treasury management. They involve three other technologies:

  • Robotic process automation: Once systems are connected via APIs, treasury managers can take automation to a much higher level. For instance, creating an automated workflow across internal and external systems could contain all the cascading steps necessary to approve, pay and reconcile payments.
  • Machine learning: Machine learning is a form of artificial intelligence (AI). Having been taught to identify significant patterns in your data, a machine learning program can make predictions about new information. When applied to treasury management, machine learning can help you identify fraud or gain a clearer picture of your cash flow by predicting the payments and receivables behavior of customers.  

  • Visualization: An unintended consequence of connecting systems using APIs is that treasury managers run the risk of being overwhelmed by data. Visualization tools—dashboards are a common example—aggregate relevant data behind the scenes to help you make sense of it. These tools perform the calculations needed to present you the big-picture information you can use to make better decisions. With a good visualization tool, you can easily drill down beneath top-line conclusions to find causes and exceptions.


Decide What You Want From Real-Time Treasury Management


When you combine these technologies, it becomes easier to not only streamline and automate treasury management but also elevate the role of treasury management within the organization. The ability to view and analyze all available data in real-time would enable treasury managers to make faster, better decisions. It also enables you to plan more accurately for the future, whether the issue is managing risk more effectively, fine-tuning cash flow, or making borrowing or investing decisions.

The promise of real-time treasury management will unfold over the coming decade. To prepare, you can identify the obstacles you would most like to remove from your processes and the information you would most like to have to make better decisions. Having this wish list handy will guide you on your path to real-time treasury management. 


For Informational Purposes Only

These materials are for informational purposes only. These materials do not represent any opinion, guidance or recommendation, whether formal or informal, of Capital One, National Association, or any of its officers, directors, employees, advisors, attorneys, consultants, affiliates or subsidiaries (collectively, “Capital One”). Without limiting the generality of the foregoing, these materials do not represent legal advice or guidance by or from Capital One. In no event may the recipient of these materials rely on these materials for any purpose whatsoever. Nothing contained in these materials shall give rise to, or be construed to give rise to, any obligations or liability whatsoever on the part of Capital One. Nothing contained in these materials shall alter or modify, or be deemed to alter or modify, applicable law (including, but not limited to, the limitations under applicable law of Capital One's obligations and/or liability in applicable matters). The recipient of these materials should consult the recipient’s own counsel to understand the recipient’s obligations and liability in applicable matters.

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