Why operational excellence starts with treasury for fund managers 

Whether you’re managing listed securities or alternative assets, optimising cash flows and mitigating risks are critical to achieving financial success for asset management firms. The complexities of managing diverse portfolios require highly automated and seamlessly connected treasury operations.

By modernising existing processes with integrated, automated workflows, asset managers are in a stronger position to increase interest revenue, reduce middle-office costs and minimise operational risk, all while ensuring next-level cybersecurity and compliance.

Operational excellence is vital for sustainable success. But why is end-to-end automation so important in the treasury function? And how can you best achieve it?

The benefits of automating treasury functions

Technology significantly enhances efficiency and productivity for all firms, while reducing the risks of human error. When you integrate purpose-built, industry certified workflows with an ecosystem of banking, accounting and investment platforms, you eliminate the need for manual data entry and reconciliation, allowing operational staff to shift their focus towards high-value tasks. 

Utilising ISO certified platforms also helps to counteract more nefarious risks such as fraud or hackers, who seek to interfere with day-to-day processes. Automation empowers asset managers to complete the entire treasury management workflow with optimal efficiency to increase returns, lower costs and remove both operational and cybersecurity risks.

The industry agrees. At a recent roundtable in Melbourne, Australia, hosted by FIS, leading buyside firms listed the positive impacts of adopting modern treasury technology solutions, including:

• Automated bank reconciliations, cash forecasting and investment processes;
• Enhanced payment workflows controls and efficiencies;
• Better collateral forecasting and management;
• Accurate entity mapping and integration with general ledger and accounting systems; 
• Better collateral forecasting and management;
• Accurate entity mapping and integration with general ledger and accounting systems;
• Tighter credit facility monitoring and management of rates-affected instruments;
• Real-time risk management and portfolio simulations.

The future of treasury is digital. But given current market volatility, elevated interest rates, increasing operational costs and ongoing cybersecurity attacks, the time to modernise is right now. 

How to modernise your treasury operations

Industry feedback from leading asset managers in APAC identified a six-step route to operational excellence for the treasury.

1.    Cash management: Automate cash forecasting and investment.
Automation tools allow users to effortlessly monitor multiple bank accounts, view transactions and sweep cash balances. By integrating invoicing/ERP systems and investment and accounting platforms, automation not only saves time, but also improves visibility – reducing the risk of making poor cash management decisions.

By automating cash positioning and forecasting, you’re empowered to make informed, data-driven choices, resulting in improved cash management and increased interest revenue on cash of more than 200 basis points.

2.    Payments: Streamline payment processing, remove unsecure emails.
Automated payment workflows and controls transform businesses by replacing labour-intensive manual entry with seamless, electronic processes.

Now you can efficiently establish recurring payments, batch-process invoices for all currencies and use the New Payments Platform to improve visibility and management of incoming and outgoing payments.

Structured payment processes with embedded, auditable approval controls (instead of emails or other manual, unsecure processes) also reduce the risk of payment errors, fraud and cyberattacks.

3.    Risk management: Analyse and execute hedging transactions in real time.
With a single integrated treasury management solution, fund managers can easily model investments and debt, integrate with market data and risk management platforms, and consume external investment information.

In turn, that enables you to continuously monitor interest rates, exchange rates, equity markets and credit risks. Plus, you can reduce decision-making time and costs when executing transactions, while ensuring compliance with risk limits and investment strategies.

4.    Reporting: Gain accurate and timely financial insights.
In the digital age, accurate and timely reporting is fundamental for managers to serve increasingly sophisticated investors.

A modern treasury management system simplifies the reporting process by consolidating data from multiple sources, removing the need for manual data entry and becoming the single source of truth.

5.    Accounting: Increase the speed and accuracy of journal entries.
Complex entity structures with diverse tax treatments often make accounting tasks cumbersome and expensive for fund managers. But a modern treasury management solution will model all entities and generate the journal entries to feed an organisation’s accounting system.

So, as well as significantly reducing the time and expense of these tasks, you can improve the accuracy of the accounting entries by avoiding errors and inconsistencies.

6.    Managed IT services: Improve stability and security by leveraging existing expertise.
For resilience to cybersecurity attacks, managers need the latest solutions and services to help them improve data security, privacy and system stability.

As technologies continually advance and cyberattacks become more sophisticated, there’s a growing reliance on technology providers that continually enhance their infrastructure and controls while complying with global information technology standards.

Global technology providers, such as FIS, are best placed to stay ahead of cybercriminals due to their deep domain expertise and extensive resources available to fund ongoing development.

For more information visit www.fisglobal.com.