EXCLUSIVE: “Putting Treasury in the Pilot Seat” – Dan Gill, SunTec Business Solutions in ‘The Fintech Magazine’

The changing role of the treasurer demands flexible, innovative solutions that will have an impact on the strategic direction of not only the bank but also its corporate clients, says Dan Gill from SunTec Business Solutions

In the not-so-distant past, helicopter pilots faced a daunting array of tasks that demanded their expert manual control and attention to stay in the air. From the moment they took off, they had to skilfully control the helicopter’s lateral and longitudinal movements and maintain constant awareness of its altitude, speed and the ever-changing environmental conditions, all the while keeping a close hand on the throttle, as they navigated a path from A to B. Today, a suite of automations have simplified these tasks, minimising the collection and management of the information required and allowing pilots to focus their attention on plotting the best route to their destination.

Now substitute ‘pilot’ with ‘treasurer’. The treasurer’s role has similarly been transformed.

Enormous developments in Cloud-based digital services are empowering data-driven treasurers to take more responsibility for steering their organisation’s direction of travel as the financial climate changes. Cutting-edge digital applications are freeing dynamic treasury teams from the routine tasks associated with cash forecasting, payment reconciliation and liquidity management, allowing them to reallocate time to tactical planning, strategic thinking and a vocal role in environmental, social and governance (ESG) work. They are functioning at an altogether higher corporate altitude.

In organisations that embrace this change, a treasurer will be obliged to spend less of their time ensuring their organisation stays aloft, and more time guiding the business forward. This revision of established roles is being endorsed by some of the sector’s most authoritative thinkers, and, in light of these changes, banks would seem well-advised to re-evaluate how they enable not only their own treasurers, but also those of their corporate clients. Many treasury teams will tell you that the pain-points that have historically tethered them to the desk are cash forecasting, risk management, and bank relationship management, all time consuming, data-intensive tasks with serious consequences if delivered without accuracy.

Monitoring these factors in order to keep cash flow in check will remain the treasurer’s area of expertise, but the latest solutions give them easy and timely visibility on these metrics. Tasks that used to rely on a bevy of human analysts can now be achieved with Cloud-based software that plugs into existing infrastructure – and that is key to simplifying the suite of treasurer responsibilities. By allowing digital stewards to deliver a more easily visible overview of what’s happening to liquidity at a given point in time, treasurers can focus more attention on looking ahead.

In the words of certified treasury professional Dan Gill: “Cash is always king, but visibility is queen.”Gill, the industry principal for banking and financial services at enterprise software product and SaaS company SunTec Business Solutions, notes that liquidity and risk management – the treasurer’s backroom skill set – are now strategic imperatives for many companies.

“With interest rates having been near zero for so long, many organisations do not have the experience or systems in place to effectively manage liquidity or interest rate risk,” he says. “Corporate boards have become keenly aware of those risks and that has served to elevate the role of treasury.”

In this elevated role, treasurers are now becoming involved in areas that traditionally have been outside of their scope, he says. “This is especially true in the ESG realm where the treasury team must now consider the environmental, social and governance impacts of their liquidity management decisions along with the traditional focus of yield and risk management.

“To effectively manage all these factors, treasurers need real-time visibility into yields and risks along with a variety of new factors, like ESG scoring, that is not yet fully matured. I believe that the banking industry holds the key to gathering, standardising, and delivering this new information to corporate treasury.”

Gill knows that, for many corporate treasurers, it’s not a case of identifying which tasks are ripe for change, but how to implement the cutting-edge solutions needed to liberate treasury personnel, and expand the information available to them.

“Many treasury organisations continue to forecast cash and operations in outdated spreadsheets that operate days or weeks in arrears,” he says. “The world moves too fast now for these outdated methods.”Fortunately, the scalable, compatible and open nature of the SaaS model means adopting a new software solution is more accessible than at any time previously. Companies like SunTec offer an easy-to-implement solution for bringing new solutions to established banks, in a manner that is agile, accurate and deployable. With an API-led application, corporate banking teams looking to enliven their tech stack can integrate with an externally built, but locally managed suite of applications.

“Cash is always king, but visibility is queen… the banking industry holds the key to gathering, standardising, and delivering this new information to corporate treasury”

This eliminates the need to persuade in-house engineering teams to build each new application, and the need for those same in-house engineering teams to provide continuing development and support throughout that solution’s lifetime.In this way, banks have an opportunity to have the best of both worlds – the stability of a major financial institution, with a fintech-like agility to deploy cutting-edge systems. And with these solutions comes the ability for corporate treasury systems to connect directly with financial institutions through APIs to keep relevant information at the treasurer’s fingertips where immediate action can be taken.

“I am a firm believer in adopting solutions that are future-proofed, built by subject matter experts with easy interoperability,” says Gill. “Integration between disparate systems is now far easier with the advent of standardised APIs, streaming technologies, and integration methods that easily outpace the batch-based methods that are rampant in so many financial institutions.”

A specialist in relationship pricing, working with banks and corporates to introduce more automation and transparency to that relationship, SunTec is using technology to build value for both parties. One of its most innovative ways in which it does that is through its Account Analysis Solution, which enables management of the entire corporate customer lifecycle, from origination, through implementation, pricing, billing and collections to renewals. It also allows banks to quickly deploy valuable offerings to their clients, such as Green-ECR, which gives customers the ability to purchase carbon credits through a balance offset, or directly through fees, allowing banks to compete more effectively for deposits while also meeting a strategic real-world challenge for their clients.

Meanwhile, the solution offers a first-of-its-kind, real-time mode for delivering balance positions and fee information. The SunTec Ecosystem Management module further allows comprehensive partner management and revenue settlement with other non-banking and third-party partners in an ecosystem.

The coming years are likely to see an even more explosive expansion in the capabilities these systems offer and, for the transaction banking industry as a whole, this may represent an opportunity to regain some of the momentum lost in 2020. That was a year in which the industry took a dip so profound that it is thought to have wiped out three years of sector growth. Indeed, as interest rates around the world rocket up from 15 years of historically low levels, adopting new and ambitious approaches to attract balances will become increasingly important, especially for small and mid-sized transaction banks.

“Small and mid-sized banks definitely face some significant headwinds in our current environment,” says Gill. “This will ultimately lead to a certain level of consolidation that could result in a lower level of service to the market. But I remain bullish on the role of small and mid-sized banks in the future, if they can act quickly.”

He believes highly flexible, SaaS-led innovations can offer a dynamic, ambitious and agile bank an opportunity to expand its services far beyond the capabilities of its nearest competitors, and at rapid pace. Though it may not always be profitable to offer the highest rate available to customers on the market, insight-driven, tech-based offers could come to the fore, such as hyper-personalised individual rates, or tier-based rate offerings, says Gill. For small and mid-sized banks unable to out-complete their larger competitors, playing smart on rates could prove the path to continue attracting customers and avoid becoming a victim of consolidation.

“Attracting new customers is essential, as is increasing the balances of current customers,“ Gill adds. “Simply offering the highest rate to all customers will likely not get the desired result as the cost for those deposits would be too high.

“Banks need to implement far more innovative solutions for rate management that allow them to hyper-personalise the rates that they offer to their customers by dynamic segmentation, that considers the customer’s entire relationship with the bank.”

This article was published in The Fintech Magazine Issue 29, Page 08-09