AI for Real-Time Treasury Delivers Up to 90% Efficiency Gains

While progress may appear to be a function of replacing work, it is frequently the transformation of work that accelerates innovation. After all, automating an inefficient process wins no productivity awards — but transforming that process into a more seamless and impactful one does. As artificial intelligence (AI) develops, it is transforming the way that […]

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While progress may appear to be a function of replacing work, it is frequently the transformation of work that accelerates innovation.

After all, automating an inefficient process wins no productivity awards — but transforming that process into a more seamless and impactful one does.

As artificial intelligence (AI) develops, it is transforming the way that work is organized, particularly within finance and treasury departments.

This, as a Monday (March 4) report from Bloomberg found that an AI-driven cashflow management tool from JPMorgan Chase & Co. helped some of the bank’s corporate customers slash manual work by almost 90% by automating the categorization and visualization of client payment flows.

Today’s corporate treasurers find themselves operating at the intersection of legacy and nascent business models and are increasingly tasked with serving as the financial architect of business growth, as well as the vanguard of digital innovation, across their organizations. 

Given the shifting scope of the modern treasurer’s purview, identifying where AI tools can be effectively leveraged to drive efficiencies is becoming crucial. 

See more: CFOs Tap AI to Optimize Cash Flow

How AI Can Contribute to Real-Time Treasury Management

As PYMNTS reported in November, JPMorgan Chase is reportedly working with American regulators as it prepares its inaugural AI projects and products. Per the report, while JPMorgan’s AI solution is currently available for the bank’s clients and is offered at no charge, there could be a future where it is offered to the broader commercial public for a fee.

“The treasury function has definitely increased in importance, and has definitely been enhanced in terms of the versatility that needs to be looked into,” Ole Matthiessen, global head of cash management at Germany’s Deutsche Bank, told PYMNTS in an interview.

AI can “intuit” what non-structured data might be when detailed in bank statements or invoices, eliminating the need for manual intervention or examination. The more data that’s out there, the more adept AI models become in automating reconciliation processes. 

By leveraging AI, treasury departments can become more agile, proactive and capable of navigating complex financial landscapes in real time. This can lead to better financial outcomes and risk management for organizations. 

“AI and ML are transforming everything treasury, it’s the equivalent of the Industrial Revolution 4.0,” Jarrett Bruhn, managing director and head of data and AI in global transaction services at Bank of America, told PYMNTS. “When you think of what a treasurer does, trying to find operational and cost efficiencies, these tools and technologies fundamentally change how they can do their daily job.”

AI can analyze historical data, market trends and various parameters to provide more accurate and dynamic cash flow forecasts. This helps in optimizing cash positions and ensuring liquidity.

Crucially, one of the immediate opportunity areas for AI is in automating repetitive and time-consuming tasks, such as data entry and reconciliation, allowing treasury professionals to focus on more strategic aspects of their roles. 

Still, it remains critical to keep a human in the loop. After all, AI tools merely surface relevant information at-scale and at-speed. It is up to human treasury leaders to decide what to do with that information and how to act on it in the best interests of their business.

Read also: How Data-Informed Decisions Help CFOs Manage Spend and Growth Cycles

Data-Driven Insights Redefine Role, Impact of Treasury Teams 

To operate effectively, companies need high-quality data, collected and analyzed in real time, shared throughout the organization. Increasingly, treasury teams find themselves as the stewards and sharers of that data.

It can be an unenviable task, particularly for larger companies that have gone through several waves of mergers and acquisitions and are now faced with fragmented and siloed data repositories where different tech stacks from various departments don’t talk to one another.

But every worthwhile problem inherently demands a solution, and the marketplace is responding to the contemporary needs of modern treasury departments.

As recently as Monday, PNC teamed with treasury platform Koxa to debut an embedded banking offering that lets PNC’s corporate and commercial banking clients retrieve real-time balance and transaction information, and submit, approve and reconcile payments, all from inside their ERP system. 

For further reading, PYMNTS Intelligence in the report “Navigating The Unexpected: Developing A Long-Term Treasury And Trade Risk Strategy,” a collaboration with Citi, reveals how treasurers seeking to support their organizations’ growth strategies can plan to manage risk exposure, support growth and implement digital innovations.

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