Financial technology (fintech) continues to make rapid advances, no more so than in treasury management. How will this radical transformation play out over the next five to 10 years? Will most functions be automated, digital and real-time? And will China be the world leader?
As technology advances, how do corporate treasurers ensure they reap the rewards of fintech solutions while keeping up with evolving regulations?
As Vincent Marchand, Head of Cash Management Fintech Lab at BNP Paribas, puts it: "The world of the treasurer has changed dramatically, with a significant increase of regulatory requirements since the 2008 financial crisis combined with the exponential development of new technologies in all of their core activities."
While this will be undoubtedly disruptive, treasury managers recognise fintech's potential in helping their digital journey and addressing the challenges of seeking more efficient methods to manage their cash flow, forecast working capital needs, mitigate currency risk exposure and improve reconciliation processes for their increasingly globalised operations.
In fintech, China leads the wayThis potential is nowhere truer than in Asia Pacific (APAC), which leads the way in the adoption of fintech solutions. China, one of the world's most populous nations, has leapfrogged the rest of the world and leads with 69% of digitally active consumers using fintech services and products, compared to the average global adoption rate of 33%.
Fintech has brought significant changes to China's traditional finance industry, including in cash management. In Shanghai, 55% of corporate treasurers who attended a recent BNP Paribas fintech roadshow said they now have specific key performance indicator targets to make their treasury more efficient – with a strong incentive to look at fintech solutions, given the much shorter time to market they offer. This has led them to consider deploying new technologies mainly to automate processes and reduce human error, such as Robotic Process Automation (RPA), as well as to mine the valuable data they currently collect in isolated blocks through machine learning or deep learning.
"In an environment where payments are instant and delivery is near-instant, the onus is on the corporate treasurer to select which technology to adopt to keep the company relevant."Louise Zhang, Head of Transaction Banking China, BNP Paribas
The pace of technological change has had a profound impact on treasurers' roles: the nature of financial services businesses has changed rapidly, and much of it has shifted online. Payment systems, for instance, are being revolutionised. "In an environment where payments are instant and delivery is near-instant, the onus is on the corporate treasurer to select which technology to adopt to keep the company relevant," said Louise Zhang, Head of Transaction Banking China, BNP Paribas.
China: a cashless societyHowever, fintech also means different things in different places. While Hong Kong still thrives on cash, credit cards and even cheques, digital payments have become an integral part of daily life across geographies and generations in mainland China, to the point where cash has become an aberration.
This rapid and widespread adoption of fintech in China stems from the entry of tech giants such as Alibaba and Tencent into financial services as a growth strategy. Ant Financial, which launched Alipay in 2004 to support Alibaba's e-commerce platform Taobao, has grown into the world's highest valued fintech. Similarly, Tencent has created a comprehensive financial services ecosystem over the company's social network, WeChat. Now, Alipay and WeChat Pay are the world's second- and third-largest mobile wallet providers. Incumbent banks and financial institutions in China also have invested massively in new technology to stay relevant.
Corporate treasurers must innovate nowWhile companies have embraced technology to win over retail customers, fintech solutions are only recently entering the world of corporate treasury. This is mainly due to the blistering pace of technological change that treasury departments typically lack the resources to match in order to develop robust in-house solutions or even evaluate external ones. Complicating the situation further, companies also have to navigate a thicket of constantly evolving regulatory frameworks as well as cybersecurity concerns that are an inevitable by-product of technological progress.
More importantly, it is challenging to build effective e-commerce applications with technological solutions that act as a bridge to link the speed, flexibility and diversity of online payments with a cautious approach at the back-end that prizes data security.
Two years ago, BNP Paribas built a dedicated structure to screen the fintech ecosystem. Our Fintech Lab teams work with developers, digital operators and start-ups from around the world to accompany our clients in their digital journey, and help find the right answers and produce practical solutions.
The future of treasuryFintech companies have proven ability to create products and services that help cash managers run their divisions better. Looking at the fintech universe from our clients' operational viewpoint, there are several solutions that serve most corporate or banking functions.
Spanning a wide maturity spectrum, these include ready-to-implement technologies such as cloud computing, chatbots and robotic process automation (RPA); maturing technologies such as machine learning and advanced robotics; and those under development, such as deep learning and virtual assistants. 
"There are no 'one solution fits all' fintech-based solutions in the market, but if corporate treasurers do not embrace these emerging technologies, they risk being left behind. "Vincent Marchand, Head of Cash Management Fintech Lab, BNP Paribas
Such technologies will continue to push more 'traditional' B2B industries to connect more directly with end-users, in much the same way e-commerce has been a game changer in China.
"There are no 'one solution fits all' fintech-based solutions in the market, but if corporate treasurers do not embrace these emerging technologies, they risk being left behind," concludes Vincent Marchand, Head of Cash Management Fintech Lab, BNP Paribas.
 'Collaborating with Fintechs', Presentation by Vincent Marchand