The benefits of a platform approach for treasury functions

The pace of technological disruption has made it a necessity for bank treasury management to fully embrace cloud-based platforms. Advancements in Artificial Intelligence (AI) and big data analytics, coupled with the unreliability of traditional legacy systems, have also made migrating to a cloud-first approach a priority.

Discover the key benefits of a cloud-based platform approach and how it empowers bank treasury management teams to stay ahead of the game in an increasingly interconnected financial ecosystem.

The benefits of a cloud-based platform approach

Cloud computing has emerged as a transformative technology for bank treasuries, alongside Artificial Intelligence (AI) and big data analytics as a serious driver of innovation. According to Gartner, by 2028, cloud computing will shift from being a technology disruptor to a necessary component for maintaining competitiveness. This applies to all businesses, including those in the banking industry.

Traditionally, bank treasury management has relied on multiple disconnected systems, many of which are entrenched in outdated legacy systems. This fragmented approach creates inefficiencies and increases operational risk. By adopting a centralized, cloud-based platform approach, management teams can overcome these challenges and streamline treasury operations.

The benefits of this approach are attractive in an era of rapid digital transformation. A cloud-based platform approach provides real-time access to financial data, optimizing decision-making and offering a more granular view of cash flow, liquidity and risk exposure. Such visibility enables treasury teams to optimize financial strategies, particularly forecasting accuracy and responses to market fluctuations.

Automating manual tasks is critical for time and cost savings. Migrating to a cloud-based system enables tasks like cash flow reporting and bank reconciliations to be automated, increasing process efficiency and removing the chance of human error which could cause substantial financial losses.

Integrating treasury functions into a single cloud-based platform also enhances connectivity between stakeholders (including regulators, investors and business partners), supporting the development of financial products and services.

A bonus is the reduction of IT overhead and maintenance expenses. Built-in compliance frameworks and advanced security features safeguard sensitive data while seamlessly assisting bank treasury management in meeting evolving regulatory requirements.

Ensuring security in a cloud-based platform approach

Legacy treasury management systems typically require substantial hardware and maintenance investments yet fail to offer robust security measures necessary in today’s banking environment. These outdated systems also struggle with inadequate infrastructure, leaving treasuries vulnerable to cyber attacks.

Cloud-based platforms are developed with advanced security features that help mitigate risks associated with data breaches. Multi-layered security protocols are implemented, such as encryption, 24/7 monitoring and AI-driven threat detection. Unlike traditional legacy systems that require manual updates and patch management, cloud-based platforms automatically reduce the risk of system vulnerabilities.

Legacy systems, which are often onerous to set up and maintain, also face significant constraints in data consolidation and API connectivity. On the other hand, cloud-based platforms enable seamless integration with other banking systems, ensuring a more secure and efficient treasury management process. Additionally, cloud-based platforms ensure minimal downtime and uninterrupted operations - a priority for treasuries managing liquidity, cash flow, and risk in real-time.

A platform approach unlocks innovation and scalability

With a cloud-first platform approach to treasury management, banks can modernize their operations and drive a winning combination of scalability and innovation.

Integrating cloud-based systems offers flexible and easily expandable infrastructure, whereas traditional legacy systems are bogged down by costly reprogramming and lengthy development cycles. Bank treasury management benefits from the responsive nature of such systems, being able to rapidly adopt new services without complex and costly system overhauls. This agility empowers teams to quickly adapt to changing market demands and integrate additional capabilities, such as advanced reporting analytics, AI-powered forecasting or advanced regulatory compliance tools.

A platform approach gives access to a marketplace of cloud-based, pre-tested applications and services, eliminating the need for in-house development. By leveraging the power of this interconnected, cloud-first ecosystem, bank treasury management can enhance operational efficiency, drive internal innovation, and keep ahead of competitors.

Joining a financial ecosystem with a platform approach

By joining an interconnected ecosystem, bank treasury management can leverage new opportunities for innovation, partnership and performance.

The agility and resilience offered by integrating into a cloud-based platform offer the operational stability necessary for growing in the financial landscape where uncertainties are almost expected. Uninterrupted access to new technologies, compliance frameworks and security protocols is simply invaluable for long-term growth and scalability.

Isolation is no longer an option for treasury management in banks. The rise of open banking and embedded financial services has made it pivotal to integrate with the right partners. Whether the goal is to onboard AI-driven forecasting models or real-time payment solutions, a cloud-based platform approach is necessary when also partnering with Fintechs, third-party financial institutions or global payment networks.

With Finastra’s open development platform, bank treasury management can get faster access to fintech innovation and scale their core solutions.

We work with bank treasury management teams to build architecture for the future, enabling future growth, improving capital management, increasing operational efficiency while reducing costs, as well as improving the ability to meet liquidity regulatory requirements.

Learn more about how our software solutions can help your treasury team transition to a cloud-first platform approach today.