Real-time treasury: This bank’s competitive advantage?

real time treasury planixs
Pete McIntyre, the liquidity expert

Written by Pete McIntyre

March 26, 2024

Treasuries are grappling with the increasing speed and volume of data, and the drive for compliance balanced with competitive advantage. The question is – how can your treasury harness its wealth of data to support strategic decision-making and operational excellence? Can moving to real-time treasury give your bank a distinct advantage?

As an analogy, the only way to permanently change the temperature in the room is to reset the thermostat. In the same way, we can agree that treasury operations need recalibration to manage liquidity, mitigate risk, and move from passive day-to-day cash management to more intraday active play.

Nicolas Nadeau is the Senior Manager for Intraday Liquidity at the National Bank of Canada (NBC). In a revealing SmartTreasury interview, the conversation included the drawbacks of outdated legacy systems, as well as the clear benefits of real-time treasury data. The event was well attended by treasury and liquidity professionals who asked some great questions. Nicolas was honest about the challenges his team faced and the successes achieved in processing vast datasets in real time. 

First things first, resetting the thermostat

Nicolas emphasised the need to shift the team’s mindset from operational execution to skills in business intelligence and data mastery. This represents a significant departure from the conventional notion that business intelligence (BI) is the sole domain of technical experts. The value of providing non-technical people with real-time data insights is becoming increasingly apparent. For NBC, this shift in mindset was necessary:

The old world is you manage your liquidity and your funding by guesswork. You think, at the beginning of the day, where do I think I’m going to finish, make my decisions, and that’s it. Whereas you’re now in the world where you’re saying, no, I’m using real-time data to see what’s actually happening in the accounts right now. And you’re predicting what might happen next to really optimise your liquidity.” 

Manual processes add little value

The journey towards real-time treasury demands a seismic shift towards an agile solution capable of processing vast datasets. But amidst this transition, you will be confronted with a critical challenge: how can you navigate the complexities of data integration and system interoperability to realize the promise of BI-driven insights?

For Nicolas, a review of existing practices showed the Treasury operations at NBC were fragmented, inefficient, and under-invested in technology. The department was entrenched in manual processes that added little value beyond data collection. 

Armed with a background in data science and technology, Nicolas and the team set out to implement a robust data aggregator to streamline the collection of critical information, including SWIFT statements and forecast data. The goal was to centralise information using a single tool – ultimately NBC selected the Realiti suite from Planixs.

Taking a measured approach

As your treasury confronts the imperative to drive value creation and stakeholder alignment, how do you ensure that BI empowers your operational efficiency?

Nicolas emphasised the importance of a measured approach; establishing a solid foundation before implementing changes. NBC planned an incremental rollout of enhancements, starting with the trading desk to achieve real-time visibility into settled positions and enhance efficiency. Subsequent efforts focused on optimising forecasting capabilities and leveraging additional features within Realiti.

Not just a reporting tool

Here is another paradigm shift, rather than solely focusing on generating reports and visualisations, your data can be a critical driver of decision-making. What is to be gained from this approach, and how can treasurers adapt their BI strategies to support strategic decision-making?

Nicolas offered these examples of how NBC is using BI as a bridge between compliance and competitive advantage:

Effective risk management lies at the heart of real-time treasury operations. By harnessing advanced analytics and predictive modeling, your treasury can identify and mitigate potential risks proactively. BI tools facilitate the monitoring of market trends, credit risks, and regulatory changes, empowering your treasury to adapt swiftly and safeguard assets.

Accurate cash flow forecasting is essential for maintaining liquidity and meeting financial obligations. Real-time BI capabilities offer treasurers the ability to analyse historical data, market indicators, and internal cash flow patterns to forecast future cash positions with greater precision. This proactive approach enables you to optimise cash reserves, minimise borrowing costs, and capitalise on investment opportunities.

Compliance with financial regulations is paramount for organisations. BI capabilities enable you to streamline compliance processes by automating data collection, analysis, and reporting tasks. By centralising financial data and generating real-time reports, BI facilitates transparency and accountability, ensuring adherence to regulatory requirements and enhancing audit readiness.

Strategic resource allocation.  BI gives visibility into performance metrics and key performance indicators (KPIs). With flexible dashboards and interactive visualisations, you can monitor treasury activities in real-time. This proactive approach enables you to allocate capital efficiently, maximise returns on investment, and drive sustainable growth.

Foreign Exchange and cross-border payments. If you can access real-time data in one centralised place, you can identify opportunities, not only in your primary currency (in NBC’s case, Canadian dollars), but also in foreign currencies. In addition, as payment capabilities evolve, you must manage liquidity effectively across borders and time zones, ensuring a seamless global service offering for clients. By monitoring settlements in real-time, you have immediate visibility into the status of your transactions. You can proactively identify and address any issues that may arise, enabling you to revolutionise your cross-border payment settlement processes.

Meet Realiti

With the Realiti suite, you benefit from real-time, enterprise-wide 360° visibility of your liquidity landscape, and control over cash and securities in a single platform.

Join global institutions and financial firms of all sizes including Santander, Lloyds Banking Group, NatWest, Allied Irish Banks, SIX Group and Scotiabank. They will tell you that the rich, real-time data provided by Realiti enables them to adapt swiftly, stay ahead of regulatory requirements, identify and address liquidity risks and minimise the impact of economic uncertainties.

When you invest in Realiti you’re not just getting powerful liquidity management capabilities. You’re also unlocking access to a super-smart data analytics capability that means you can use your data without us getting in the way.

And talking of raising the temperature, here’s a warm invitation to talk to us and join the ranks of intelligent banks that have discovered the power of Realiti.

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