For more than 30 years, the financial services industry has been a front-runner when it comes to technology. From automation and electronic user devices such as ATMs to online banking and electronic payments, the sector has stayed ahead of the digital curve, benefitting both consumers and corporates alike. As a result, the world of business banking has become much more streamlined and efficient, putting control firmly in the hands of the corporate treasurer.
Two key factors have influenced this shift, namely the development of the Internet and a dramatic reduction in the cost of technology. Since the widespread adoption of the World Wide Web back in the 1990s, the cost, speed and efficiency of global communication has witnessed an astronomical improvement, and we continue to see new developments every day. The simple email of the initial digital age was only the first step and companies now communicate through a myriad of channels, from computer-to-computer Application Program Interfaces (APIs) to video conferencing and online meetings, in real time and in a more cost efficient manner.
Now, in today's more advanced second digital age, mobile technologies and the development of data science have introduced unprecedented levels of connectivity between personal devices and banking applications, systems and platforms, changing society profoundly and consequently the companies that power the economy.
The combination of these new technologies has had a significant impact on company infrastructure, most notably through fast-emerging connected solutions such as cloud computing. In today's modern world, the mainframe virtualisation of the 1970s has been replaced by powerful shared server infrastructures that revolutionise back office and IT functionality, allowing companies to share hardware and software in order to achieve economies of scale. There are three fundamental service models that help drive this today:
Today a vast percentage of all software solutions are developed in the cloud, changing the face of the financial services industry for good by providing a host of benefits and solutions to companies of all sizes1.
When it comes to the corporate treasury department, the onset of digital and mobile technology has many key benefits. In its most basic form, documents are now easily transferrable so there is no need for physical hard copies that need to be carried around, copied or faxed.
Today, smartphones and tablets offer much the same functionality and accessibility as the average office PC, making mobile technology extremely convenient and extremely connected to the workplace. This is turn reduces the typical constraints implied by the office working environment, allowing corporate treasurers and finance executives to complete transactions on the move from anywhere at any time. This frees up time to focus on innovation and improving efficiencies elsewhere in the department.
And once treasury executives actually reach the office, these new technological advancements continue to make the function more effective and efficient. The majority of devices and systems are now connected, enabling the finance team to produce more accurate accounting reports, improve internal transparency, access financing solutions and mitigate risk. And the fact that data can now be cut into smaller, more digestible pieces and undergo in-depth analysis is making the corporate world increasingly knowledgeable and intelligent about their businesses.
Finally, the connectivity between corporate and banking systems has also reshaped the cash management landscape. Not only can the finance department now source cost savings across company expenditure online and utilise virtual corporate cards, they can also negotiate deals, issue electronic invoices, make transfers, accept cashless payments and mitigate the risks associated with currency volatility in real time. Companies can also refinance their account receivables seamlessly, improving liquidity management and freeing up working capital in the process, thereby improving organisational profitability and customer service standards.
Rightly, as a result of this greater corporate dependency on digital technology, justifiable concerns are being raised about cyber security, especially with regards to connected devices and the number of points of entry. However, the financial services industry has been working to overcome these challenges for some time now and security has always been a primary objective for the world's leading institutions. Both corporations and banks benefit strongly from cooperation in this area and increasingly the alignment of their interests forms an effective defence against cyber-attacks.
As the world moves towards an increasingly digital age, the added convenience and interconnectivity between devices, systems and platforms is empowering the finance function to a level of sophistication never seen before. In recent years, the treasury has become a control centre where accurate decisions and actions are taken in real time, reducing the risk of errors and delay, and bringing all the intelligence necessary for the right decisions to be made. As such, it is essential that corporate treasurers choose a banking partner that provides the tools and connectivity that will enable them to fully leverage the developments of the digital revolution.
1"Cloud vs. On-Premise Deployment, 2008-2014", http://www.softwareadvice.com/buyerview/deployment-preference-report-2014/