How to Overcome Barriers to Treasury Technology Adoption: Strategies for Successful Implementation

As treasury departments are increasingly expected to deliver more strategic value, the implementation of suitable and innovative technology to support the new goals becomes a priority. Despite huge advances in treasury and cash management software in the recent decade and the clear benefits it delivers to the finance teams, a striking number of businesses are still resistant or slow in adopting new technology. The pressure on treasurers is not easing and they are expected to be present in the vendor selection and implementation process, however, fear of change, lack of skills, outdated systems and processes prove to be a bigger challenge than initially anticipated on the route to modernisation.

In this article, we will explore the key factors that hinder technology adoption in the treasury space, explain their origins, and come up with practical solutions to overcome implementation challenges.

Beyond the evolution of the treasury management systems to become more comprehensive, there are other trends that are influencing and reshaping the technology landscape for finance and treasury - raising the bar of what should be expected and what is possible.

Real-Time Payments and Liquidity Management

Moving on from slow wire transfers to instant payment systems has revolutionised liquidity management. With payments settled instantly and the financial and transactional data being available in real time, organisations can make proactive decisions to take advantage of any opportunities, or alternatively, spot risks early, rather than relying on outdated reports and wasting time on aggregating data. This is particularly valuable for multinational corporations managing cash positions across multiple subsidiaries, markets, financial institutions and currencies.

API-Driven Connectivity

API-based connectivity with ERPs, banks, electronic money institutions (EMIs), and other financial platforms has changed how businesses access financial data across their entire ecosystem. Not only does the connectivity give real-time updates on cash positions, but it also facilitates automated reconciliations and reduces the manual work traditionally associated with aggregating financial information from disjointed sources.

Artificial Intelligence and Machine Learning

AI and ML algorithms are not a futuristic gimmick anymore - they are leveraged in forecasting, fraud detection and automation to increase efficiency and accuracy. Thanks to their ability to handle a vast amount of data, they can easily identify patterns or anomalies that could otherwise have gone overlooked, while automation lets treasury departments be more strategic with their day-to-day tasks.

Cloud-Based Solutions

A lot of businesses have now completed or at least started the migration from on-premises systems to cloud-based solutions which will significantly reduce implementation times and costs for other systems needed for treasury. In general, cloud-based platforms are more scalable and come with regular, automatic updates as well as extra security features, making them a particularly compelling choice for those operating across multiple jurisdictions.

Barriers to adoption and implementation are still a major problem despite a big leap in technology innovation and the compelling benefits. Understanding the challenges and what drives them is the first step towards building a strategy to move beyond them.

1. Resistance to Change

Human resistance or fear of change is perhaps the most pervasive barrier to adopting new technology. It is quite natural to be reluctant towards anything that is unknown as it pushes us outside of the comfort zone and requires changing the ways we are used to operating. Because it is hard-wired in our brains, it is much harder to tackle and requires a completely different approach to other issues we might encounter on the path to modernisation. The more time that was spent with a particular system or process, the less likely we are to be willing to embrace new ways of working, particularly if the benefits are unclear beyond the system being 'new' or the, still common, fear that automation may threaten some of the finance roles.

2. Skills Gap

Related to the fear of change and moving outside of the comfort zone is the need to acquire new skills as the business implements new treasury technologies. Some of these may not exist within the current team, while other team members may not be willing to upskill or have a lateral move given their position. The most commonly required skills to handle the new wave of treasury technology are: technical expertise, data analytics, forecasting, FX knowledge. Tackling the skills gap may lead to either dismissals or the cost of acquiring new team members or upskilling the existing ones.

3. Legacy System Constraints

While moving to a unified, cloud-based treasury system is a dream, for many organisations this may prove a bigger task than for others given their legacy system setup. What often happens, especially if businesses were operating with an on-premise system and across jurisdictions, is that the systems evolved into a complex network due to multiple mergers, acquisitions and piecemeal upgrades. Untangling this complex web of platforms and solutions may take more time than the implementation of a new tool. Worse yet, these legacy systems usually lack flexibility and interoperability to be integrated with modern technologies which means they cannot be connected to newer systems. They need to be either completely replaced or left as they are without modernisation.

4. Budget Constraints

Upgrading the treasury technology, albeit very beneficial for the business and its goals, and often absolutely necessary given the outdated systems, frequently loses the battle to secure the budget particularly when competing against revenue-generating initiatives. What makes it even harder is the difficulty to accurately quantify the ROI on treasury technology as it often delivers benefits that are difficult to measure in purely financial terms.

5. Data Security and Compliance Concerns

Last but not least, compliance and cybersecurity teams may veto any new technology due to data security and compliance concerns. Even if a new vendor is able to provide certificates and the safety measures they offer, sticking with an old, tested system might seem like a safer option. These concerns are especially acute for multinational corporations operating across multiple jurisdictions with varying regulatory requirements.

Navigating the journey from making the modernisation plan for your treasury tech to successfully implementing new tools requires a careful and strategic approach. In that, you should consider both technical and human factors to give yourself the best chance for success.

Build a Compelling Business Case

Before facing other teams and stakeholders about your modernisation project and asking them to invest - the first step is to build a compelling and robust business case that articulates all benefits of your treasury technology project. Here's what to include in your business case:

Offer quantifiable benefits. While the treasury function is often associated with less tangible benefits, you can look into actual cost savings from reduced banking fees thanks to a centralised platform or any other savings, for example, decreased reliance on external funding, resulting from optimised working capital.

List factors that improve the overall efficiency of the treasury department such as reduced error rates, improved forecast accuracy and enhanced control and governance across entities.

Highlight the strategic value of a better treasury technology that comes from better decisions enabled by improved cash visibility and forecasting accuracy.

Quantify the reduced risk exposure from enhanced fraud detection, improved compliance capabilities, and better management of financial risks.

Before presenting these benefits, research your audience - particularly for the CFO and the board members; stating the benefits clearly and demonstrating clear ROI is crucial for securing buy-in and funding.

Follow a Phased Implementation Approach

While a major overhaul of outdated processes and systems to fully get on the right track might seem compelling, an implementation process that is more gradual and introduces change using a phased approach will allow your business to manage any challenges more effectively.

Consider the following:

Start with modules or capabilities of your new platform that deliver immediate value and build momentum for wider adoption. For example, if your business had been struggling with visibility of your cash positions across multiple banks and FIs, consider first connecting your accounts to your new system and building a dashboard that shows cash position across them all and can be easily shared across teams.

Test new features or systems within a limited scope before rolling them out across the entire organisation. This can mean trying a new payment or automation feature using a selected group of vendors and monitoring the outcome.

Incrementally extend the implementation to additional subsidiaries or functional areas as your confidence in the system and skills using it gets better.

With this measured approach, you reduce risk while giving yourself leeway to course correct and build trust and confidence in new technology within the organisation.

Train and Upskill Treasury Teams

To tackle the skills gap emerging when implementing new treasury technologies, you could obviously engage in recruitment activities and find new talent. This is, however, a riskier and less cost-effective option than investing in training and development of your existing team. An additional benefit of upskilling your existing team beyond bridging the gap is the potential for reducing the resistance to change. Effective strategies include:

Structured training programmes

Continuous learning opportunities

Knowledge sharing

Change champions

Teams that are equipped with both skills and confidence to navigate the change brought about with the new technology will become your biggest supporters on the way to a wide-company roll-out and buy-in. They will ensure the new tools are used effectively, educate others and communicate benefits whenever these are unclear.

Partnering with the right company for your treasury technology upgrade is a crucial part of the implementation success. When considering treasury technology vendors, here are the key aspects to look for:

Proven Track Record: Evaluate potential vendors based on their experience with similar organisations (size, industry, volume of transactions) and implementation time. Don't hesitate to ask for necessary certifications of security measures, some customer stories and the exact outline of your implementation process.

Support Capabilities: Ask if you'll have access to a dedicated customer success manager for ongoing support and technical assistance, what's the typical timeframe for resolution of any issues and how frequent are any system downtimes and how often can you expect upgrades.

Flexible Architecture: Look for platforms that offer modular designs, meaning you can pick and choose the features you need to tailor the solutions for your business at the time and expand or reconfigure should the need arise in the future. The modular architecture usually leads to faster implementation and set up and higher likelihood of buy-in from stakeholders..

APIs: Prioritise vendors that deliver robust API capabilities for integration with your existing financial ecosystem - this should include, at minimum, banks and financial institutions and your ERPs.To make the platform even more future proof ask about other API connections that can be custom-built to connect with the rest of your ecosystem.

Future-Proofing: Don't shy away from asking about their product roadmap and R&D investments to ensure that they are committed to ongoing innovation and improving customer experience, and their product development plans are aligned with your needs.

Prioritising the above factors will help businesses avoid the common pitfalls of selecting the seemingly best-of-breed but often rigid, and difficult to implement system that quickly becomes obsolete.

Organisations that have successfully transformed their treasury technology by modernising it and investing in new tools can offer valuable insights.

Executive Sponsorship Is Critical: Strong support and buy-in from the leadership team will help to overcome wider organisational resistance to change and ensure necessary resources - financial or human.

Change Management Deserves Investment: It is not just about implementation - change management is a real barrier and allocating sufficient resources and time to address it will significantly improve adoption rates in the long run.

Sett Realistic Timeframes to Prevent Disappointment: Whether committing to a phased rollout or working with the vendor themselves on a proper implementation plan, being realistic on how long setting up, configuring and learning a new tool takes will help maintain momentum and keep the morale high despite the complexity.

Focus on Process Optimisation, Not Just Technology: The most successful implementations improve the processes to address the inefficiencies as the new tools are implemented. Investing in shiny tech when processes are still broken will only lead to a disaster.

Data Quality Is Foundational: Taking time to work on data quality, aggregation and governance before implementation prevents downstream issues and enhances system effectiveness.

Modernising treasury technology represents a significant opportunity for multi-subsidiary businesses to enhance efficiency, improve decision-making, and contribute more strategically to wider organisational success. Understanding common barriers and implementing proven strategies to overcome them, will help treasury leaders navigate the implementation journey with more confidence and realise the full potential of the new, powerful tools.

The path to successful treasury technology adoption may not be straightforward, but with careful planning, stakeholder engagement, vendor selection and a phased approach, organisations can transform their treasury functions into strategic assets that drive business value.