Rapid changes in the financial and technological landscape over the last ten years have had an impact on the treasury function and significantly changed its role within the business. In order to remain competitive, companies depend on their treasury department for forecasts, planning, and utilizing cutting-edge technology and innovative practices to stay ahead of the curve. Treasury managers are still responsible for protecting liquidity, optimizing working capital, and managing financial risks.
As 2024 draws to a close, we are considering the key trends that have surfaced and will probably impact treasurers in 2025: API-driven systems, machine learning (ML) and artificial intelligence (AI), and real-time liquidity management. The treasury is poised to become more strategic, robust, and nimble than ever before because to these developments.
Each of the trends that will influence the treasury function in 2025 and beyond is examined in this article, along with the ramifications for your company.
Integration of ML/AI in Cash Management, Forecasting, and Working Capital Optimisation
Machine learning (ML) and artificial intelligence (AI) are revolutionising many aspects of finance. The incorporation of ML/AI technology is critical for effective treasury management since it improves strategic decision-making and relationship management. Using machine learning not only improves prediction speed and accuracy, but it also helps firms align liquidity with operational demands in the medium to long term.
In contrast, AI-powered solutions allow for more efficient cash conversion analysis and working capital optimisation. The treasury department can swiftly assess when and where liquidity is most needed by leveraging insights from payables, receivables, and inventory systems. For example, automating supplier payments balances liquidity requirements with supplier relationships, whereas automating invoice follow-ups on the receivables side simplifies processes.
AI and ML technologies can also be used to help exception management by finding and flagging anomalies in cash flow patterns based on historical data, allowing the treasury department to investigate and take proactive action before problems such as cash shortages occur.
Finally, as treasury managers are increasingly expected to develop medium- and long-term business strategies, AI/ML-driven forecasting becomes easier and more accurate, as it can accommodate greater datasets and variances. With these insights, organizations may be more nimble and proactive in their financial planning in today's fast shifting economic environment.
Management of Liquidity in Real Time Using of Instant Payment Systems
Real-time treasury alters how treasurers manage liquidity by leveraging instant payment technologies and API-based access to financial institutions.Cash transfers can now be completed seamlessly, 24/7, across all accounts and borders, significantly decreasing the time lag associated with wire transfers and enhancing cash visibility
API-based communication with banks, EMIs, and other financial tools enables treasurers to obtain real-time transaction and cash position data, as well as automate reconciliations. This real-time data is critical for controlling and reducing financial risk because it allows treasurers to make timely, educated choices while avoiding liquidity concerns and guaranteeing regulatory compliance. Multinational firms that need to track liquidity and cash situations across different subsidiaries, markets, and currencies benefit from such innovations, which improve day-to-day operations and optimize working capital.
Furthermore, real-time payment systems and APIs provide 'just-in-time' funding. This means that firms can use rapid transfers to eliminate idle cash, direct surplus funds to higher-yield assets, and avoid costly overdrafts. Automated investing instruments, such as money market fund sweeps and unitized time deposits, can be integrated into a real-time liquidity system to maximize returns while maintaining optimal liquidity.
API-Based Treasury Management Systems and Bank Connectivity
APIs are part of real-time treasury and, as previously stated, will be the future of treasury management. APIs offer smooth and stable connectivity between corporate systems and banking or other financial platforms, which represents a significant departure from how many firms currently manage treasury and transactions—through static, batch-based interactions. For example, to accelerate payments, process supplier invoices first and then download a batch file.
Treasurers can use API-driven communication between banks and ERP systems to build a centralized dashboard for real-time monitoring of account balances, cash positions, and transactions, including inflows and outflows. Instant visibility promotes proactive decision-making, more precise planning, and liquidity management.
APIs also help to automate repetitive manual operations performed by treasury specialists, such as payables and receivables reconciliation, payment processing, and intercompany funding. Treasury teams may devote more time to strategic projects because they have less manual work and fewer errors.
Using API-driven tools, a trained treasury staff can manage future financial difficulties and communicate with stakeholders more effectively. As APIs mature and expand, their role in facilitating secure and efficient data sharing will be important in molding the future of treasury operations while also encouraging innovation and competition in the financial ecosystem.
Emerging Treasury-as-a-Service Models for Cross-border Operations
The usage of treasury-as-a-service (TaaS) models is increasing as more organizations operate globally. TaaS solutions help international organizations overcome the obstacles of handling cash across currencies, countries, and banking connections.
Scalability and specialisation are two characteristics that have contributed to the TaaS model's success. Businesses without strong in-house resources can enter new markets by relying on their TaaS provider's knowledge to overcome geopolitical uncertainty and turbulent market conditions. This allows organizations to react to new market requirements faster and achieve a shorter time-to-market, giving them a competitive advantage.
Furthermore, TaaS providers rely on modern technology infrastructures that include AI-powered analytics and real-time insights. Outsourcing their treasury function to a professional vendor lowers the expenses associated with deploying modern treasury software and allows businesses to concentrate on their main operations.
The Bottom Line
Treasurers are no longer passive protectors of business assets; they are active participants in the firm's financial strategy, and the trends shaping the coming year reflect this. As these developments intersect, treasurers and businesses must embrace innovation and invest in technology to remain competitive. Partnering with the proper technology providers who adapt to these developments, follow key concepts of liquidity management, risk mitigation, and strong financial stewardship, and deliver a competitive advantage will remain crucial.
