Top Trends to Watch for in Treasury Management

Banking CIO Outlook | Wednesday, December 01, 2021

Fremont, CA: Changes in legal, societal, and competitive expectations have impacted how treasury departments execute banking operations. The upheaval isn't just a fleeting fad: this year will bring a new set of problems for treasury management services and solutions. Let's see top technological trends that will create the largest opportunities for treasury leaders.

      Investing in Regulation-as-a-Service technologies

Treasury departments are turning to Regulation-as-a-Service (RaaS) technologies to lessen the strain while maintaining strict compliance records. These services standardize reporting, automate document processing, and use artificial intelligence technology to discover trends and create reusable blocks and templates. Investing in this new technology frees up precious resources while also reducing time-consuming paperwork.

     Banking-as-a-Service platform plays by treasury management.

Shifting customer tastes and spending patterns are compelling banks to reconsider their stale legacy business models. Banking-as-a-Service (BaaS) has emerged as a key approach for tech-savvy banks to overcome the growth constraints of their old business model. The BaaS movement necessitates more than just a desire for innovation; it forces treasury services to reevaluate how they engage with the competitive landscape.

Treasury management departments may turn rivalry into collaboration by adopting a BaaS mindset: customized 'neobanks' can exploit a financial institution's payment capabilities to provide their clients a unique experience. Ridesharing firms have bank licenses to offer car loans or savings accounts to their fleet of drivers. Businesses can also use a bank's robust Know-Your-Client check system to verify customer IDs at a low cost. Investing in the technology required to provide these new collaboration opportunities is critical to extending a bank's worth far into the future.

      Heavy emphasis on environmental and social governance

Social responsibility is no more a behind-the-scenes activity; societal trends have lifted the veil, shedding light on a company's ethical activities. Environmental, social, and corporate governance (ESG) has emerged as a robust set of guiding principles for determining an investment opportunity's long-term viability. The ESG valuation gets influenced by factors like a company's carbon footprint, supply chain standards, board diversity, and even the recyclability of product packaging.

Investors are putting pressure on treasury departments to align with ESG-friendly companies. Tech developers seize the opportunity, searching for novel methods to compile data from many sources into a one-stop-shop ESG dossier. When determining the feasibility of an investment, these marketplaces are increasingly becoming a must-have resource for treasury management teams.

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