18-03-2021 13:28

Redefining the treasury through automation

Automation is a strategic opportunity for finance and treasury departments to move closer to the business in their companies and drive innovation. FX automation is one clear place to start.
Automation within the treasury, current and anticipated

FX among the top automation priorities

Trocmé did note that FX is among the top three areas when it comes to automation expectations among those surveyed.

 

His team also asked treasuries about the top skills needed in corporate treasury departments, both today and in five years’ time. The top five for today’s treasury come as no surprise: cash management, risk management, FX, capital markets funding and financial reporting. When it comes to the “rising star” skills that will need to be added in the next five years, the unifying theme is technology: data analytics, financial reporting, system integration, IT security/fraud prevention and business development.

 

The survey also asked both the finance and business development respondents to rank which technologies will change the companies’ business models the most in the coming five years. The one that stands out is large data analytics, which 98% of corporates in the Nordic region expect to be implemented in their business by 2025.

 

“So there’s a lot of things happening there, huge change pressure, and a need to do a lot on the digitalisation and automation side for the treasury function itself,” Trocmé says.

There’s huge change pressure and a need to do a lot on the digitalisation and automation side for the treasury function itself.

Johan Trocmé, Director, Nordea Thematics

Nordea’s FX automation journey

To help treasuries on this automation journey, Nordea has focused on developing a suite of FX automation solutions, known as AutoFX. The journey began back in 2015 when Nordea built the first version of its liquidity management robot, allowing users to automatically sweep excess liquidity or top up negative balances on their currency accounts.

 

While most large corporates were in a wait-and-see mode back in 2015, by the beginning of 2020, 300 customers were using the tool. By the end of 2020, there were 600 customers using it, and now a few months into 2021, the number tops 700. The customer portfolio ranges from smaller startups to the biggest pension funds in the Nordics. Some have automated the entire process while others have automated smaller flows and recurring tasks.

 

“It’s up to you whether to do the full monty or small subsets or something in between,” says Patrik Holmberg on Nordea’s FX automation team. He notes in addition to helping companies cut down on nagging, time-consuming tasks, the currency robot can also mean significant cost savings, allowing companies to avoid unnecessary interest rate costs and borrowing costs.

 

In addition to AutoFX Liquidity Management, Nordea has also recently launched AutoFX Hedging in Sweden, Norway and Denmark, allowing companies to automate their FX hedging according to their own hedging policy. The bank has also unveiled AutoFX IQ, a new FX advisory tool that helps companies analyse and forecast their currency cash flows for smarter decision-making. The solution has been rolled out in Denmark and Finland, with other Nordic countries to follow. That’s alongside a host of AutoFX APIs, which allow companies to fetch relevant data such as FX market rates and historical trades, as well as execute FX trades when something happens in their own system.

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