New York Cash Exchange · Page 1 New York Cash Exchange Disclaimer EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global

New York Cash Exchange

Utilizing robotics and FinTech to maximize

the investment in your treasury

management system (TMS)

New York, New York – May 31, 2018

Page 1 New York Cash Exchange

Disclaimer

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Young Global Limited, each of which is a separate legal entity. Ernst & Young LLP is a client-serving

member firm of Ernst & Young Global Limited operating in the US.

This presentation is © 2018 Ernst & Young LLP. All rights reserved. No part of this document may be

reproduced, transmitted or otherwise distributed in any form or by any means, electronic or mechanical,

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this presentation or its contents by any third party.

Views expressed in this presentation are those of the speakers and do not necessarily represent the

views of Ernst & Young LLP.

These slides are for educational purposes only and are not intended, and should not be relied upon, as

accounting advice.


Agenda

► Treasury management system (TMS) benefits

► Importance of technology

► Enhancement of your TMS


Treasury technologyTypical TMS benefits

Monitoring, reporting and control Process automation and efficiency Cost reduction and efficiencies

► Better visibility into cash balances, both

international and domestic

► Central repository of all treasury-related activities

► Near real-time access to key information

► Report integration and control across business

functions

► Standardization of process controls and audit

documentation

► Segregation of duties maintained on a consistent

basis

► Treasury performance benchmarking

► Single point of entry, less opportunity for manual

error

► Scalability of processing and operations

► Reduction in audit risk occurring from manual

intervention

► Consolidation of timelines for cash positioning

and booking journal entries into the GL

► Improved timing of financing decisions

► Establishment of straight-through process and

interface between different platforms

► Enables automatic retrieve and reconciliation of

bank’s movement

► Increased fraud prevention and monitoring

capability

► Interest savings from better utilization of cash

balances in investment positions, credit balances

and liquidity optimization

► Fewer resources needed due to automation and

streamlined processes

► Enables treasury to focus on value-add activities

vs. process-oriented activities

► Increased timely decisions as a result of to close

to real-time visibility

► High visibility into bank fees and facilitated

benchmarking


Importance of technologyDefine future state treasury vision and strategy

Performancemeasurement

PolicyProcess

TechnologyDataPeople

Agility

Execution

layer

Organization

layer

Resource

layer

Treasury strategy

Technology integration is a

key enabler of achieving

business objectives across

all layers of treasury

strategy.

Define leading practice

Basic Strong Leading


Enhancing your TMS


Introduction to the future

Robotics Business intelligence


Robotics: a spectrum of automation

Desktop

automation (DA)

Robotic process

automation (RPA)

Intelligent or cognitive

automation (IA or CA)

► The age of macros and workarounds

► Preexisting basic technologies, such

as VBA, auto hot keys, screen-

scraping

► Several toolkits, no systematic

platform

► Strategic platform for tactical change

► Broad application (use cases are not

function-specific)

► Rule-based automation of routines

(able to follow instructions)

► No intelligence (binary decisions only)

► Strategic platform for strategic

change

► Narrow application (use cases

require thoughtful consideration)

► Nonroutine tasks requiring judgment

(cognitive capabilities, dynamic

rules, artificial learning)

► Used to increase value rather than

to reduce cost

Implementation speed and solution maturity

Va

lue

an

d c

ap

ab

ilit

y

Structured data as basis for

repeatable actionsUnattended service-based processing

Cognitive computing utilizing

unstructured data to make decisions

Act

Perform

Think

Challenge

today

Challenge

tomorrow


Disrupt or be disrupted?Headlines capturing attention of executives everywhere

30% to 40%of existing business process

services are likely to be

impacted by RPA

Gartner

Cost reduction of

35% to 65% for onshore

operations and 10% to 30% for

offshore operations

Institute for Robotic Process

Automation

RPA is estimated to lead to a

30% to 35% reduction in

entry-level roles and increase

mid-level roles

Everest Group

Estimated that 85% of a

typical firm’s more than 900

processes can be automated;

110m to 140m FTE capacity

could be released by 2025

McKinsey & Company


Types of benefits Examples

Reduce end-to-end time to handle peak periods, meet deadlines and smooth post-M&A integration

by virtually connecting disparate systems and data sources

Do more faster and shorten

critical path

Improve auditability (every step can be logged), consistency and control over error-prone manual

activities that elevate risk, noncompliance, financial or reputational harm

Reduce costly errors with

quality and controls

Enable quick wins and rapid value realization to expand margins or generate funding for existing

or new initiatives (e.g., lean, BPR, ERP implementations, process improvement)

Accelerate value from other

initiatives

Save in human effortReduce people expense by automating frequent manual, repetitive tasks, improving exception

handling and moving work to best location

Improve knowledge worker value-add by increasing focus on highest-return activities (i.e., time

dividend) and improve their satisfaction and retention by eliminating dull routines

Increase value-add of talent

and lower attrition

Applying RPA to free up valuable time


Treasury case study Reporting bank balances – not accessible through SWIFT or SFTP

Request

Approved??

No

Yes Yes

No

Potential benefits realized:

► Pulling and recording of balances that are otherwise not accessible either

through SWIFT or online portals are automated, eliminating the need for

manual intervention

Process overview:

► Robotics used by the client to pull bank balances that are not

accessible through SWIFT connection

► Robotics used by the client to request bank balances that are not

accessible through SWIFT and do not have online portals

► Bot would record bank and GL balances on the reconciliation

spreadsheet or balance reporting spreadsheetManual process Automated in POC

As-is process

Process overview

and RPA benefits

Automated process

Process time:

100 hours per year

Process time:

10 hours per year

Treasury analyst

pulls bank

statements from

bank portals

Treasury analyst

requests bank

statements from

local controllers

Treasury analyst

consolidates all

balances in one

Excel spreadsheet

Treasury analyst

pulls GL balances

from ERP

Treasury analyst

reconciles bank-to-

GL balancesTreasury director

reviews the end

product of either

reconciliation or

bank balance report

No

Yes Yes

No

Robot pulls bank

statements from

bank portals

Robot requests

bank statements

from local

controllers

Robot consolidates

all balances in one

Excel spreadsheet

Robot pulls GL

balances from ERP

Treasury analyst

reconciles bank-to-

GL balancesTreasury director

reviews the end

product of either

reconciliation or

bank balance report

GTSIs the

account

accessible via

online

platform?

Is the

account

accessible via

online

platform?

Are the

balances

required for bank

reconciliation?

Are the

balances

required for bank

reconciliation?


What are the myths and realities of RPA?

Myth: Robotics will fix outdated or inefficient

processes.

Myth: All processes can be improved with RPA.

Myth: Robots will replace the workforce.

Reality: Process costs can be reduced by

25% to 40%.*

Reality : RPA can significantly increase

processing speed.

Reality : RPA is a technology overlay that ties

together legacy fragmented systems

through automation.

Reality: The human workforce can increase focus

on results, analytics and relationships.

*Percentages are an approximation based on client experiences.


The value proposition Approximately 10x ROI coupled with approximately 50x less difficulty to implement

Key:

Robotics

Task specificity

Frequency of

tasks

ERP, CRM

Business process management software (BPMS)

1X

50X

2X

10X

10X

1X

Low

Low

High

High

Hardest, consuming

Big, risky

Scalable, fast

Illustrative automation horizon

Relative ROI % Relative difficulty/time to implement


How to get startedTypical next steps for feasibility assessment

Identify automation

areas

Identify an end-to-end

practice for a three- to

five-week RPA

feasibility analysis

(including business

case)

Gather information

Feasibility analysis

would start with

gathering preliminary

information about high-

level processes,

resources and pain

points

Subject matter

personnel process

meetings

Discussion with the

subject-matter leaders

regarding details of the

processes, variations,

applications, and timing

and other dimensions

Identify automatable

processes

High-level solution

architecting and

assessment of possible

automation solutions,

timeline; RPA/consider

other tools, such as

extract, transform, load

(ETL)

Assessment report

Compile business case

with net savings, sprint

plan and timing,

including recognizing

other process

improvements identified

during the review


FinTech


FinTechDefinition and adoption

Source: 2017 EY FinTech Adoption Index.

Highlights from the 2017 EY FinTech Adoption Index:

33% is the average FinTech adoption globally, compared with 16% in

our 2015 study.

46% is the average FinTech adoption across emerging markets: Brazil,

China, India, Mexico and South Africa.

50% of consumers use FinTech money transfer and payment services,

and 65% anticipate doing so in the future.

64% of FinTech users prefer using digital channels to manage all

aspects of their life, compared with 38% of nonusers.

13% of consumers are regular users of five or more FinTech services

(FinTech “smart users”).



Percentage of digitally active customers who have used each product.

Money transfer and payments Insurance

Savings and investments Borrowing

Financial planning

50%

Online foreign exchange

Pay via cryptocurrency

Overseas remittances

Online digital-only banks without branches

Nonbanks to transfer money

Mobile phone payment at checkout

24% 20% 10% 10%

Car insurance using telematics

Insurance premium comparison sites

Activity-based healthinsurance

Peer-to-peer platforms for high-interest investments

Investments in equity crowdfunding platforms

and rewards crowdfunding platforms

Online investment advice and investment management

Online stockbroking

Spread-betting

Borrowing using peer-to-peer platforms

Borrowing using online short-term loan providers

Online budgeting and financial planning tools


33% 46% 84%

65% 64% 13%

Average FinTechadoption globally

(compared with 16% in 2015)*

Average FinTechadoption across

emerging markets

(Brazil, China, Mexico and South Africa)

Consumers aware of FinTech (compared with

62% in 2015)*

Anticipated future adoption rate of FinTech

money transfers and payment (up from 50% in

2017)

FinTech users prefer digital channels to

manage all aspects of life, compared to 38% of

nonusers

Consumers are FinTechsuperusers, regularly

using five or more FinTech services




1. FinTech has achieved initial mass adoption in most countries

1. FinTech has achieved initial mass adoption in most countries

FinTech firms have gained significant market traction. In the theory of innovation adoption,

FinTech has reached the key milestone of “early majority” adoption. The FinTech industry’s

success in emerging markets results from its ability to tap into tech-literate but financially

underserved populations.

► Consumers using at least two FinTech services: 33% across 20 surveyed markets

► Markets with highest adoption rates: China (69%), India (52%)

► Average adoption across emerging markets: 46%

► Evidence of increasing awareness: 84% of customers are aware of FinTech services

compared with 62% in 2015*

*Analysis considers six markets surveyed in the 2015 study: Australia, Canada, Hong Kong,

Singapore, the US and the UK.



2. New services and new players are driving higher adoption

2. New services and new players are driving higher adoption

Building upon the strength of their compelling value proposition and novel use of technology,

FinTech firms continue to expand their offerings, which in turn attract more users based on their

simplicity, transparency and personalization. New players, including established technology

firms, are entering the market. Policymakers are clarifying regulatory frameworks in previously

undefined areas, paving the way for more services.

► Most popular category: money transfer and payments, used by 50% of consumers in the last

six months

► Category experiencing significant growth: insurance services, which have reached 24%

adoption across markets




3. FinTech users prefer using digital channels and technologies

to manage their lives

3. FinTech users prefer using digital channels and technologies

to manage their lives

Unsurprisingly usage of FinTech products and services is higher among younger consumers.

Younger “digital natives” are the most common users. They have a growing demand for financial

services and are more likely to consider nontraditional providers (as they often lack strong

relationships with incumbents).

► Age segments with greatest FinTech usage: 25–34 (48%) and 35–44 (47%)

► Difference between FinTech users and nonusers in preference for using digital channels to

manage their lives: 26%

► FinTech superusers (adopting 5+ services): 13% of all consumers




4. FinTech adoption will likely continue to gain momentum

4. FinTech adoption will likely continue to gain momentum

FinTech adoption is expected to increase in all markets, with a future adoption rate of 52%

globally, as more nonusers embrace FinTech.

► Markets with highest usage intent: South Africa, Mexico and Singapore

► Services with highest expected increase in demand: borrowing and financial planning



Treasury reporting requirements and related operational

challenges

How can treasury make better use of available financial data to generate insights that support strategic decision-making?

There are several leading business intelligence (BI) software products available at little or no cost which can be configured to meet specialized treasury reporting needs.

Underlying reporting challenges – Treasury and

Finance Leadership require insights on specific

areas of business activities to support strategic

decision making. Standard reports provided by TMS

platforms lack presentation, analysis features, and

integration with multiple data sources

Industry response – In order to address the

demand for management reporting and insights,

many of our clients prepare specialized reports,

dashboards, and analysis using Microsoft Excel and

PowerPoint

Operational inefficiencies – generating periodic

executive reports and other specialized analysis in

Microsoft Excel and PowerPoint involves a

significant level of recurring manual effort. The

process requires treasury and finance staff to import

and manipulate data from disparate systems,

resulting in greater focus on report preparation vs.

analysis of data


Summary of data flows

1. External banks supply information reporting to TMS either via host to host connectivity or SWIFT

2. Transactions are keyed into TMS by treasury resources as a part of daily operations

3.A. On a periodic basis, data from the TMS is pushed by the vendor via a secure XML data pump to a local area network folder

3.B. On a periodic basis, RPA software is configured to retrieve data from TMS and save to local area network folder

4. Relevant external data sources are imported into the local area network folder to enhance TMS data using RPA

5. Once stored in the local area network folder, TMS is imported to the businesses intelligence reporting database by an RPA bot/automated jobs

6. Automated advanced analytics are applied to data, stored in BI Database, and prepare it for on demand reporting or monitoring

7. Reporting and monitoring dashboards are made available through desktop/web

User Input

Treasury

Management

System (TMS)

Local Area

Network Folder

1

2

3.A.

5

3.B.

BI solution in actionExample data architecture to address your reporting needs

Export TMS

data using RPA

Import data to

BI Database

using RPA7

BI Database

6

BI Reporting

XML Data Pump

Bank A

Bank B

Other External Data Sources

(e.g., market rates)

4

Analytics

Engine


Contact information


Contact information

Ehren Moeller, CTPGlobal Treasury ServicesErnst & Young LLPEmail: [email protected]: +1 856 938 6751

Contact information

EY | Assurance | Tax | Transactions | Advisory

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This material has been prepared for general informational purposes

only and is not intended to be relied upon as accounting, tax or other

professional advice. Please refer to your advisors for specific advice.

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New York Cash Exchange · Page 1 New York Cash Exchange Disclaimer EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global