In early February, Fides CEO Andreas Lutz participated in a Treasury Leaders Summit podcast, sharing his thoughts on industry challenges, trends, and predictions for the future of treasury and finance. While much has changed in these few short months, there is still much that remains relevant.

Biggest challenges for finance in 2020 and beyond

Even in February, the world and market were already uncertain, between Brexit, Trump, trade wars and global warming. Lutz said that staying relevant in a changing world is probably the biggest challenge overall, as the expectations for treasury today is very different than it was 10 or 20 years ago, and it’s changing more every day.

“As technology grows more sophisticated, the entire finance team has to change more to a strategic mindset,” he said. “Keeping up with all the changes is a full-time job already, because the pace of change is so rapid and there are so many moving parts.”

Legal and regulatory requirements also can be onerous for corporates. To bank in multiple regions or countries takes a significant investment in both time and resources. Most companies choose to outsource these functions to experts like Fides, so they can devote their time to their own business responsibilities.

Even with the corporate-to-bank landscape being changed by PSD2, open banking, and future regulations and technology innovators, Lutz predicts that multi-bank connectivity will remain complex — and perhaps become even more so due to the lack of global standards. Simplifying this complexity will remain a challenge for treasury.

“Despite the promise of SaaS solutions, blockchain, AI/machine learning, and APIs, the fintech market is far from maturity yet,” he explained.

Lutz said that in organizations working with more than a few banks, up to half of a treasury analyst’s time can easily be spent just on bank statement reconciliation — even with a TMS or ERP system in place. Yet without processes streamlined through automation, there’s still a significant reporting lag time. This lag increases the likelihood of inaccurate cash positioning as well as the cost of refinancing. It also means that it will take the organization longer to detect or mitigate potential fraud.

Looking to the future: strategy is key

When asked to make predictions for the future, Lutz reiterated the need for strategy to take a leading role.

“I strongly believe that the treasury function will continue to become more strategic,” he said.  “As the market continues to change, and technology continues to automate, treasury professionals will be expected to find more ways to add business value. They’ll work more closely with other departments, including the CEO’s office and IT.”

He also said that technology will also be a driver for change, with treasury staff determining the business requirements and best solutions for their organization. This will be easier for those who take the time and initiative to gain a more thorough understanding of technical requirements.

New opportunities for treasury staff

Lutz broke his predictions down into three areas where corporate treasury staff can grow. Successful treasurers, he said, will adapt and take on a new and evolving set of responsibilities and skills.

  • Act as a strategic advisor to the CFO and CEO — which requires full visibility into cash positioning, cash management skills, and communication skills.
  • Become a compliance guru — the regulatory landscape is going to continue to change, and will impact all corporations regardless of where they are based and where they do business. Becoming a trusted advisor in financial compliance, which can often overlap with other areas of compliance, such as data privacy laws, can’t be automated easily.
  • Help to transform the perception of treasury. Many people think of financial staff as being number-crunchers, slow-paced and slow to adopt change. But today’s world requires real-time responsiveness (now more than ever).

What’s in the pipeline for Fides?

The company’s primary goal continues to be helping clients be more efficient, more effective, more innovative and more successful, Lutz explained. This includes continuously looking at ways to innovate and expand its ecosystem.

In 2019, Fides won the “Best Use of Artificial Intelligence in Treasury Management” award for a joint offering with Cashforce, and announced a partnership with GTreasury.

For 2020, Lutz said the focus will be on embedded financial services, changing the way clients interact with Fides and among themselves. This will include a soon-to-be-announced partnership with a digital marketplace for money market products.

“The recent rollout of the new and improved Fides back-end multi-banking platform gives us the ability to deliver even more financial services to our clients in addition to our core multi-banking capabilities, and we’ve got some exciting developments in the pipeline, including a new offering for mid-market companies,” he expanded.

You can listen to the full 15-minute podcast here.