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A three-step route to optimisation

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6 Jul 2022

Home > News > Corporate, commercial & institutional banking > Cash management > A three-step route to optimisation
Companies are under constant pressure to operate as efficiently as possible, and the treasury department is no exception. Automation of mundane activities offers a clear way to improve efficiency.

The difficulty for most treasury practitioners is determining how best to automate the range of activities within the department. Treasurers are regularly faced with multiple options; it’s often not a choice between different providers offering similar solutions to specific problems, but between significantly different products (or combinations of products) and structures aimed at achieving optimisation. Decisions are made more complex by the fact that the effects of technological development and regulatory change mean that what is optimal today will not necessarily be so tomorrow. At any one time, there will be multiple ways to improve operational efficiency. The challenge for treasury is to prioritise the problems that need solving in a way that does not make solving future problems more difficult. The following framework should help.

Read the full 2022 AFP Executive Guide: A Treasurer’s Guide to Centralisation, underwritten by Standard Chartered

Tactical improvements

There are three different approaches treasury practitioners can use to identify ways to reduce and control operational costs:

  1. Use insights on cash to review existing processes

2. Look at ways to revise processes to reduce operational risk, focusing in particular on:

3. Take advantage of new innovation for a particular activity, ideally to automate and reduce manual intervention

Strategic improvements

For wider enhancements, look to make strategic improvements to processes and structures that will optimise operational efficiency. There will be many different potential projects, so evaluating the alternatives is the key to success. Keep in mind the core objectives of any new project:

Select the best project

With any potential strategic change, including potential digitisation within treasury, there are a number of key questions to consider.

The original article was first published on the Association for Financial Professionals. Copyright © 2022 Association for Financial Professionals, Inc. All rights reserved.

A Treasurer’s Guide to Centralisation

Cost control, operational efficiency and digitalisation are both challenges and opportunities for today’s treasurer. Learn how to navigate these with this how-to guide developed with the Association for Financial Professionals (AFP).