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The work environment of the Treasurer in 2025

The work environment of the Treasurer in 2025

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Go on, admit it: whenever there are presentations on digitalisation, do you also ask yourself "What does this mean for me as an individual? Is my job still secure?" And because you take others into account, you also relate these questions to your employees and/or colleagues.

So, the good news first: things are never as bad as they seem. The not-so-good news is that a lot of damage can be still be done nevertheless.

It is difficult to make predictions about the future. My KPMG colleague Dr Heiko von der Gracht, one of the leading experts in futurology in Germany, would certainly be able to teach you a thing or two about the basic techniques that are used to produce and evaluate the different scenarios that could unfold the future.

However, the time frame taken into consideration in this article is still relatively manageable – we are still able to get a relatively good idea of how the seven years until 2025 will unfold – at least as far as technological developments and their impact upon Treasury are concerned.

What continues to hold true: The key task of Treasury to 'ensure solvency at all times' remains unaffected. However, 'how' this will be achieved will change. This will become clear once we take into account the most important developments in the individual specialist subject areas. Let's take cash liquidity management, where indeed fully automated liquidity planning, including payment operations, is already possible. This either occurs using a latest generation treasury management system or bridging technology, so-called 'bots' (abbreviation for robots, software programmes that carry out repetitive tasks). Largely automated liquidity planning using predictive analytics is very close to entering into series production. Automated exposure determination and subsequent auto-trading are on the cards in the area of risk management. With fully automated, dynamic self-service reporting, treasury analytics is replacing manual Excel reporting with the added benefit of real analytics, i.e. responding to complex interrelationships that may not be recognisable at the first or even second glance. In addition, a changing environment, for example in the area of banking relationship management, acts as an additional driver for the changing world of work (What do I need the bank for? What does it mean if I can change my banking partner as easily as changing the brand of petrol station I fill up at?).

These are just a few examples that illustrate the three key features of the digital transformation in Treasury:

  1. The examination of entire cross-departmental and cross-functional process chains that can be automated and optimised as a whole (note: currency management begins in sales, payment operations start with master data management).
  2. The ability to think and work in complex risk scenarios that use models with more than 3 or 4 parameters as well as artificial intelligence (reliable use cases are however still thin on the ground) – and not only to come up with a response to black swans (unexpected events) but also to take into account complex relationships and factors of influence (key word: economic foreign exchange risk).
  3. Exception-based management, i.e. interference with the fully automated process only in exceptional cases, for example when an error has occurred. 

These examples and features illustrate how much the focus of work is changing. A recurring pattern are 'technology' and 'analytics'. To use both in the right way, and above all, lucratively (the basic commercial rule that earnings need to exceed expenses still applies) requires the right skills. Apart from new skills, this especially requires openness to new thought.

Can this be expected from each individual employee? Not in my opinion. Luckily, the process of digitalisation will take a few years – albeit at a fast pace. This also provides the opportunity to use this time sensibly by preparing development plans and initiating staff training. Employees have a right in my opinion to understanding the path ahead. However, this has to happen quickly, because once the new technologies and processes are used there is very little time left. And then the usual counting of heads begins. 

So what are the new or increasingly required skills?

  1. Thinking outside the Treasury box (key word: process chains)
  2. Understanding the systems, technologies and data flows used
  3. Change management – departure from traditional, repetitive linear activities to project-based work; changes occur in project mode. Even adjusting an algorithm or model is a small project. 

This doesn't sound like much, but is complex and professionally challenging. Moreover, the projects required as a result of change need to be handled much more swiftly (flexibly).

What is no longer required? Based on the above, these are manual, repetitive back office tasks, cash management, reporting or control functions. Even in the medium term, we should not indulge in the illusion that these activities will last. Of course, collective denial or delay of digitalisation would be a way of maintaining one's own current status as employee. However, I wouldn't want to bet on such a strategy, especially because these changes affect the entire organisation – so why should this not also affect Treasury? The era of the Gallic village is coming to an end.

But we should not forget, despite all the imminent change towards greater automation, that you possess a personal asset, which will not lose in importance: you know the interrelationships and processes in the manual world and understand them. This understanding is and will remain the basis for evaluating the results of the digital world and making final decisions – and you don't want machines to do this for you, do you? Neither do I.

Source: KPMG Corporate Treasury News, Ausgabe 82, Juli 2018
Author: Carsten Jäkel, Partner, Finance Advisory, cjaekel@kpmg.com

© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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