Top Six Treasury Trends at AFP 2018

November 8, 2018
Bob Stark
Kyriba Top 6 Treasury Trends at AFP 2018 Chicago

According to the Association of Financial Professionals (AFP), this year’s national conference was the largest AFP event in its 15 years, attracting more than 6,200 attendees to the fine city of Chicago. In addition to the record attendance, a wealth of new ideas and best practices were shared, arming practitioners with new treasury perspectives to employ the moment they return to the office. Fraud, cybercrime and security continue to be top of mind for corporate treasurers but this year these topics were not as widely addressed as they have been in the past. Among the many highlights, here are a few that stood out for me:

Real-time payments (RTP)

We are finally starting to hear about practical treasury uses for ‘instant’ real-time payments and its cousin, real-time request for payments. While initial RTP examples are focused on domestic payments, SWIFT GPI continues to both speed-up and improve transparency into cross-border payments. And, corporates are recognizing the potential of these initiatives.

Additional reading: 15 Minute Guide to Payment Hubs

Related reading: Why Bitcoin will Never be a Mainstream Currency

APIs

The dozens of banks who visited our booth made it abundantly clear to me that they all want their Kyriba customers connecting via API. While different institutions offer varying states of readiness, APIs are imminent for bank connectivity, and every bank is interested in the potential to offer more information transparency and new payment channels to their customer base. While I have said for years that APIs will ultimately deliver bank reporting in real-time (and consequently leading to real-time cash positioning throughout the day), the desire for banks to expand payment services is most interesting. The bank product teams I spoke with see the value in adding P2P payment channels such as PayPal, Zelle, and Ripple as these providers evolve services into more B2P products. APIs are the enabler to making this happen, as these real-time payment initiatives cannot be supported by batched file transfer.

Bots and AI

Many sessions featured discussion on the robotic process automation (RPA) and its future impact on treasury. I agree with the consensus that RPA will take treasury automation to a new level, and treasury platforms–including treasury management systems–should begin to incorporate software ‘bots within their platform over the next few years. Artificial intelligence, where the software actually learns and develops new capabilities from the data it consumes, is further away and yet the power of AI is undisputed. Ironically, there are actually organizations that claim to already offer artificial intelligence within their software, which shows how misunderstood (and misused) the term AI is. Nonetheless, once “real” artificial intelligence becomes available to treasury software applications, treasury duties will see an interesting transformation into a greater data-driven decision making role.

Blockchain

We actually heard less about distributed ledger technology (aka blockchain) in this conference than in prior years, primarily due to the fact that progress in practical blockchain applications for treasury has been slow in 2018. The perceived potential of blockchain has not been helped by the suggestions that the computing power required to operate large distributed ledger applications could, in aggregate, actually accelerate climate change. While many still believe in the potential of blockchain technology, treasury remains in wait and see mode.

Related reading: 3 Areas Where CFOs Say Treasurers Need to Be More Strategic

Treasury intelligence

More than half of my discussions at AFP had to do with making treasury more intelligent in the face of consuming greater amounts of data. Business intelligence is on the minds of treasury teams as they struggle with the prospect of overhauling their reporting to meet more demanding management requests for information and analysis. Many organizations are turning to data warehouses and visualization tools to harness greater information to make better financial decisions, driving treasury to become more KPI and performance-based. Fortunately, organizations like Kyriba are choosing to embed business intelligence software, the data warehouses that support it, into their treasury management systems so that treasury teams do not have to turn to internal IT resources to improve information extraction and analysis.

As you can tell by reading this, AFP 2018 was insightful, inspiring, and uplifting about the future prospects for treasury. This year’s AFP was also extremely busy, which made it all the more fun to be there.