How Analytics can Influence Treasury Management

Banking CIO Outlook | Tuesday, October 13, 2020

Advanced Analytics solutions enable the firms to keep business finances on track with increased control over the cash flow. 

FREMONT, CA: A bank’s treasury is part of its wholesale banking business that seeks to address corporate customers’ investment as well as risk coverage requirements. A bank’s treasury can be considered a part of its investment banking business and other business aspects such as acquisitions and mergers, syndicated loans, project finance, and global transactional banking. Technology is the key to treasury management as it enables the banks to access real-time data on financial markets. An advanced analytics solution can offer a significant advantage in this light. Analytics solutions can assist the financial institutions to estimate the price of various products for sale as well as the associated risks.     

 Compliance is another aspect where financial institutions are eyeing to apply innovative ways of managing risk and improving performance. Conventionally, firms used to invest heavily in process improvement and data organization to address the increased regulatory requirements. However, firms are now eyeing new ways of managing risk and performance. Currently, adv

anced analytics solutions are being used for improved judgment in identification, optimization, and projection. 

A modern analytics solution provides a competitive edge to the financial institutions. Bank executives understand that utilizing analytics and other technologies are crucial to keeping the organization nimble and profitable. The main consideration has to be the way in which such technologies and analytics solutions must be implemented in order to derive useful insights for business development. With the massive amounts of customers’ data being generated within the organization, scalable technology and innovation are required to assimilate, host, and analytically process them. 

There are various banking functionalities where analytics can aid with treasury management activities. Applications such as asset and liability management, cash management, foreign exchange (FX), and hedging of interest rate can benefit significantly from analytics capabilities. In the case of asset and liability management, treasurers can use market value assumptions and bank data for gaining insights into stress testing, fund transfer pricing, and interest rate risk management. 

Analytics solution enables the financial institutions to ensure that the organization successfully manages its financial risks as it is crucial to the long-term sustainability of the business. 

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