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11-10-2022 08:59

Top 10 reasons to automate your treasury workflow

Companies large and small are turning to automation to streamline and optimise operations in their treasury and finance departments. Here are the top 10 reasons why.
People sitting in front of computers, working in a modern office

Goodbye spreadsheets and manual data entry; hello time savings and a smoother workday. When it comes to the daily tasks of FX and liquidity management, a growing number of companies are ditching their manual processes and turning to automation to optimise their workflows and free up time for more value-adding work.

Automation doesn’t have to be all or nothing, says Kristoffer Jansell, automation lead in Nordea Markets.

“Some companies choose to automate the small, nagging, time-consuming tasks. Others go all-in and automate the entire process. There are efficiency gains from both,” he says.

Here are the top 10 compelling reasons we hear from our clients for why treasury and financial departments should embrace automation now:

1. More time for “brain” work

Less time spent on the repetitive manual tasks, such as logging in to check account balances or typing data into spreadsheets, means more time for “brain work,” says Nordea’s Head of Next Gen FX Matti Honkanen.

“When you automate the manual tasks, you can improve the overall process, with more time to think about the strategy rather than the actual doing. As a bonus, the execution process becomes better every day when the execution doesn’t consume your whole day,” says Honkanen, who drives the development of new digital FX solutions for Nordea’s corporate customers. Brain work could be, for example, evaluating the company’s hedging strategy, a complex exercise requiring time and focus.

When you automate the manual tasks, you can improve the overall process, with more time to think about the strategy rather than the actual doing.

Matti Honkanen, Head of Next Gen FX, Nordea

Kristoffer Jansell, Automation Lead, Nordea Markets

2. Eliminate human error

Rule-based robots and sophisticated algorithms minimise the risk of human error and individual speculation. Nordea’s AutoFX Liquidity Management solution, for example, ensures that a company’s currency flows are traded in line with its strategy at all times. The currency robot uses a pre-defined framework to trade based on account balances.

“Manual trades can easily go wrong and run afoul of the company’s financial policy. Automated trading within a rule-based framework prevents that risk,” says Jansell.

Automation can also ensure transparency and regulatory compliance, for example, with automatic post-trade documentation and accounting via Nordea’s FX Trade Retriever API.

3. Optimise the financial outcome

Automation not only saves time, it also improves the result. As Thule Group’s Group Treasury Director Dino Tufek explains, a manual approach requires carving out the tasks that make the biggest difference. With automation, you can optimise to perfection.

For example, instead of managing liquidity by choosing to act on only your top three or five currencies, you can include all flows in your automated approach, also the smaller currencies. Or instead of acting once a week, you can do so daily or even hourly. That higher frequency means fewer open positions and a better overall result.

4. Apply full-scale treasury strategies to smaller operations

A small treasury or finance department may not have the time or resources to execute all of the tasks traditionally done by a larger treasury team. For example, it may not make sense to hire a full-time employee to take care of liquidity management. Smaller treasury operations may assess the liquidity situation once a month, while automated solutions can optimize it every day, or even more frequently for some customers.

“Automation allows the team to add additional functions. Instead of reducing FTEs, it’s adding a new digital one,” says Jansell.

5. Make better use of data

When it comes to number crunching and digesting large quantities of data, machines have the upper hand over humans. Automated solutions can analyse vast volumes of data quickly, helping treasurers make informed decisions, for example, on how to optimise their hedging strategy.

Data analytics is only growing in importance, with the vast majority of Nordic corporates expecting such technology to be implemented in their businesses in the coming years, according to Nordea’s annual treasury survey.

Automation allows the team to add additional functions. Instead of reducing FTEs, it’s adding a new digital one.

Kristoffer Jansell, Automation Lead, Nordea Markets

Matti Honkanen, Head of Next Gen FX, Nordea Markets

6. Smarter integration of systems

In the past, a treasurer may have logged into a dozen different systems to complete the daily core processes around cash management, liquidity and FX risk management. With automation, you can now use a single interface, as back-end integrations take care of the seamless flow of data between in-house and third-party systems.

Along with added efficiency and convenience, having an integrated one-stop shop makes it easier to catch risk in real time.

“Previously, you would have had to rely on a manually-pulled report and then take action. Now, a certain balance can trigger a red flag in your primary interface, and you can mitigate risk much more quickly. Or you can go even further, automate the action, and only be notified about it,” says Honkanen.

7. Automation as a safety net

A treasury workflow doesn’t have to be completely automated or fully manual. It can be something in between. For example, you can set the robot up to check accounts at the end of the day. If there are still balances that need to be traded, that can be done automatically.

“See it as an end-of-day insurance,” says Jansell. “If you get stuck in a meeting or have a cold and haven’t done the manual work you usually do, the robot kicks in with what you missed or takes care of the entire process for you.” In that way, automation can be a back-up without entirely replacing a manual setup or trading in competition.

8. Gain control of the FX handling in your subsidiaries

Corporates often face the challenge of how to ensure that their subsidiaries, with local finance departments, stay within the bounds of the group’s financial policy. With automation, companies can set the currency robot to act when account balances go above or below a set threshold.

“It’s a steering tool to ensure daughter companies act according to the group’s policy, you can still allow them to have balances within certain thresholds but the automated solution kicks in when it’s outside of the policy,” says Jansell.

9. Start each day with a clean desk

Thule’s Tufek notes that one key benefit of automation is being able to maintain a relatively clean desk and be even more agile in responding to sudden events.

“We have had our share of putting out fires. With automation, our treasury is better equipped to deal with any new challenges and also focus on our main target – managing our financial risks,” he says.

10. Be a strategic partner to the business

Automation can also free up valuable time for treasury and finance departments to become an even stronger strategic partner to management and the operational side of the business, from purchasing and sales to sustainability departments. Through automation, treasuries can also earn a seat at the strategy table by showing they have a role to play in how to digitalise the business.

Want to know more about our automated solutions or just get started with currency risk management? Get in touch with us!

Phone: +46 8 407 91 00
Email: [at] (markets[dot]se[at]nordea[dot]com) 

Phone:+45 3343 9786
E-mail: [at] (markets[dot]dk[at]nordea[dot]com) 

Phone: +47 2248 7860
E-mail: [at] (markets[dot]no[at]nordea[dot]com) 

Phone +358 9 369 49 090
E-mail: fxflowfi [at] (fxflowfi[at]nordea[dot]com)

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