A Journey Towards an Intelligent Treasury

Without technology, the world of treasury would be very different. It would be a lot more labor-intensive, that is certain. But what else is modern technology doing for today’s treasurer – and more importantly, what will it be doing tomorrow?

Softlogic Life strongly believes that technology delivers operational efficiencies which enable treasurers to add value to other functions. It does so in part by providing analysis and reporting capabilities with the kind of depth, speed and accuracy that simple spreadsheets will never quite achieve. It is an inevitable fact that organizations need to understand. The Treasury Department must be given the right tools for the job if they are to fulfil the expectations of their increasingly strategic roles with the kind of efficiency and effectiveness that can benefit all.

Sharing his thoughts with BMD, Dayan Ranasinghe, Head of Treasury at Softlogic Life, a young and dynamic leader with sound investment views, points out that technology will be a massive enabler where smart innovations will pave a new reality for Treasury leaders to leverage improved levels of insights and efficiency to drive business growth.

Dayan speaks with experience in areas such as auditing, leasing, hired purchasing as well as treasury, research, factoring as well as marketing gained from roles prior to joining Softlogic Life in 2007. He has joined Softlogic Life as a Financial Analyst and rapidly revamped the existing investment processes to create a diversified portfolio, which, combined with active management, resulted in profitable and sustainable returns. 

He was subsequently promoted as Head of Treasury in 2012 and seconded to Softlogic Capital PLC to overlook the Financial Cluster’s Treasury and Investment Function while heading projects with Development Financial Institutions, which included FMO and DEG, Guarant Co and TCX . Therefore, he is able to provide a more rounded outlook on what’s best for the future of treasury as it was obvious that he had a sound knowledge of the overall industry versus just his areas of expertise. 

“We live in an age of disruption. Today, modern technological innovations are bringing unprecedented changes to our personal and professional lives. Through the use of technology, companies are weaving themselves into the very fabric of how people live. With the wide adoption of data analytics—backed by artificial intelligence (AI) and machine learning, along with technology as a real-time enabler of information, a new wave of business automation (The Intelligent Enterprise)is slowly but surely stealing the limelight: 

For many years, treasury departments, which occupy a central role in the finances of an organisation, have focused on analysing, forecasting and managing the liquidity of a company. Today, it is increasingly becoming a more strategic, forward-looking business function that needs to provide insights for organisations to thrive in volatile market conditions. 

From increasing risk and stiffening regulations to rapidly shifting economic and geopolitical activities, treasury functions have no option but to embrace constant change. With the rise of the intelligent enterprise, treasury departments of the new age have a wide range of responsibilities. To become an effective entity, treasurers need on-the-go access to information to make decisions on risk and liquidity and manage business-critical transactions and data streams. 

However, ‘Journeys to Treasury’, a 2018-2019 joint study by BNP Paribas, the European Association of Corporate Treasuries, PwC, and SAP points out, “Treasury resources are limited, while increasing scale and complexity mean that it becomes impossible to process information and transactions without the help of technology.” To simply put, treasury departments are approaching a critical juncture as they head into 2020 where digitalisation is compulsory, not optional.” Stated Ranasinghe.

Today, there are significant opportunities to transform treasury processes through digitalization available in both local and global markets. However, organisations must be vigilant on using these opportunities  as each model is different and therefore needs to be customized to deliver actual value to businesses. The options for digital treasury innovations are numerous and therefore care and diligence must take centre stage when making decisions to choose an ideal solution. That is why it is necessary for treasury executives to outline their business priorities before leveraging emerging technologies which will bring operational and strategic benefits. 

Within an intelligent enterprise, the treasury department has a broad range of responsibilities. These responsibilities include several internal and external dynamics that will have a direct impact on their business agenda. Some of the critical aspects are:

  1. To develop a broader view of the digital treasury, enhancing the use of data for better analysis and insights is essential. This is quite possible today, thanks to technologies like artificial intelligence, machine learning, virtual bots and block chain. 
  2. Making cyber security the number one priority to protect financial and data assets of an organisation

Emerging technologies building the ‘Digital Treasury’

The concept of digitalization in treasury has advanced over the years. Smart technologies, like predictive analysis, enabled by AI and machine learning, have expanded the role of the treasury function and its opportunities. As per a prediction by ‘Journeys to Treasury’, treasury departments will most likely advance their digital capabilities to include machine learning. Doing so can help them augment, process, and reconcile data in real time, elevate the precision of predictive analysis; and accelerate decision-making that considers multiple perspectives of a problem. Whilst it’s still a fledging market in Sri Lanka, a definite foothold has been achieved with conglomerates taking the initial steps in utilizing the technologies available. This will enable more and more local companies to take advantage of digital solutions once economies of scale are achieved.

A key aspect of a digital road map, a Treasury department should aim to eliminate complexity, reinforce transparency and free up their employees from mundane tasks to focus more on strategic execution of work. Unlike the legacy systems of the past, which require costly customizations and integrations, modern solutions can be configured to meet precise requirements of each treasury function within a short span time of time. Digitization should not be another burden of cost for the enterprise but an investment or a saving. This thought is supported by a study done by Accenture  that states, digital investments made by an enterprise will reduce the costs by 40% while increasing staff productivity by two to three time by 2020.

Protection against cyber threats

Today, cyber threats are posing many risks for organisations, and the damage caused by cyber attacks has never been higher. In 2018 alone, the average cost of a cyber data breach has risen to a staggering $ 7.5 million from $ 4.9 million a year ago. The bitter truth is that risks and the potential cost of these attacks will grow further. Treasury departments, like many others, might have relied on technology to fight cyber threats, but both IT and treasury need to work together closely and proactively to mitigate these attacks. According to ACT’s Business of Treasury 2017 report, 82% treasurers polled have said that combating cyber attacks is their topmost priority. 

It is essential to keep your employees within the treasury department informed about different types of cyber threats, their impact on the business, and what they can do to recognize or avoid such risks. It is vital to figure out a plan—a joint effort by the treasurers and IT—to accurately deliver regular and compulsory training for employees.

Driving a new wave of life insurance in Sri Lanka

As Sri Lanka’s fastest-growing life insurer, Softlogic Life’s flexible insurance solutions and innovative digital technologies are designed to suit the diverse needs of thousands of Sri Lankans. Being at the forefront of innovation, Softlogic Life’s winning strategy is always supported by leading industry-first innovations that keeps on raising the bar higher and higher. 

Softlogic Life believes that compliance plays, and will continue to play, a critical role in the future of Treasury. The Insurance Regulatory Commission of Sri Lanka (IRCSL) is also emphasizing  more and more on this aspect of treasury operations. Softlogic Life has a dynamic team that has developed in-house applications which provide all relevant parties up to date information on existing parameters which allows for quick decision making and action.

In addition, the financial cluster is taking advantage of an asset management system purchased at the Softlogic Capital level, which further enhances the overall abilities of the treasury function by improving segregation, checks and balances, whilst further supporting the back-office function to generate accurate customized reports to suit the need of different clients and different portfolios as well as providing crucial MIS to enhance the decision making process of the treasury team. 

Furthermore, Softlogic Life looks forward to the implementation of a central clearing house for government securities and listed equity in the local market. As a further step, the Central Bank of Sri Lanka is looking to deploy a local trading platform which will, beyond doubt, add to the transparency and efficiencies of the local secondary market for government securities. It will also offer significant cost reductions as compared to the costs associated with the current systems been used. 

As far as Softlogic Life is considered, the thirst for innovation will push to explore new channels for growth while leveraging strongly on the latest technology platforms. This includes the digitization of treasury operations and processes within the organization, which will further help to support the acceleration of growth and expansion in the industry.