AI Gives Treasurers Real-Time Insight Into Liquidity

Today’s softening economic landscape is bringing about a corresponding shift in business priorities.

In the face of challenging macro headwinds, it is becoming more critical than ever for businesses, no matter their size or industry, to review their growth strategies, identify efficiencies and manage cash flow better.

Jarrett Bruhn, managing director and head of data and artificial intelligence (AI) in Global Transaction Services at Bank of America, tells PYMNTS that there has never been a better time for organizations to double down on their cash flow forecasting capabilities than right now.

The reason? According to Bruhn, it is the “astounding” advances in AI and machine learning (ML) technologies that can be integrated into treasury and finance departments to support organizational goals.

“AI and ML are transforming everything treasury, it’s the equivalent of the Industrial Revolution 4.0,” he said. “When you think of what a treasurer does, trying to find operational and cost efficiencies, these tools and technologies fundamentally change how they can do their daily job.”

Read more: How Data-Informed Decisions Help CFOs Manage Spend and Growth Cycles

Forecasting Rises to the Forefront

Cash flow forecasting helps businesses anticipate and manage potential cash flow problems, make informed decisions about their operations, and ensure they have enough cash to survive a challenging economic environment.

Forecasting is an important and increasingly critical part of an organization’s overall business strategy and cash flow intelligence helps drive roadmap realities that balance growth and profitability.

“Forecasting never stands alone,” Bruhn said. “[Businesses] have to know the ingredients that change their forecast in order to understand what’s affecting them, where the patterns are, and identify the key drivers affecting their forecast.”

Internal leaders want technology to help them be strategically proactive and support winning growth strategies in the face of ongoing macro headwinds.

Bruhn emphasized that there is “always something going on,” whether it is geopolitical risk, today’s inflationary environment, or even the disruptive surprise of a global pandemic — underscoring the importance for CFOs and finance teams of having a nimble forecasting tool able to adapt to changing realities.

See also: Generative AI Is Already Enhancing CFO Office While Erasing Redundancies

Treasury Management Moves to Growth Engine 

Modern digital solutions are helping finance teams take a holistically integrated approach to growth planning by improving and evolving how it is possible to engage with real-time operational and marketplace data, often improving the accuracy and productivity of workflows.

“The key levers for every company change by industry and company,” Bruhn said. “But key drivers like sales numbers, working capital cycles, payroll, they remain consistent.”

When businesses tap future-fit solutions that leverage embedded AI, including Bank of America’s own CashPro Forecasting, he said, leaders not only get increased accuracy but also realize that they can run various “shock” scenarios to better understand the impact of unexpected events on their cash-flows. 

He noted current AI-driven model flexibility is virtually limitless, “You can shock sales up and down, shock payroll up and down — same with interest rates and foreign exchange — and by manipulating this model you can end up with a forecast that has all the ingredients necessary for your industry and your company.” 

He highlighted that as the corporate treasury department moves from being “somewhat of a cost center” to more of a “fundamental” engine of the business, organizations realize that if they get their treasury operations right, it can change how they do business. 

“Forecasting affects a company’s bottom line … the advice is always to ‘peel back the onion’ and focus on areas where [activating data] will have the most impact [on your company],” Bruhn said. Plus, the vast data toolbox provides a treasurer with incredible transparency, “You can see your FX, you can see your working capital, your modalities of payment, and [most importantly] you can see how they all touch on different areas.” 

As for what the Bank of America leader is most excited about looking ahead? 

Outside of the prospect of a “180 degree dashboard … where a treasurer can look at all these technologies and understand what’s going on at all times with their cash flows,” Bruhn said that advances in natural language processing (NLP) solutions are what excites him most. 

“Our clients are incredibly digitally engaged and they want to have a say in what our next products look like, so we have forums and round tables — we never build products in a vacuum — and what came out of multiple conversations was this idea of a futuristic ‘seamless treasury’ powered by our data tools where there is never a reason to call the bank because all the pain points are able to be proactively handled by these intelligent solutions. So, ultimately, that is what we are solving for, empowering clients with their data.”