AI, faster payments, and cash management. These are the three things the treasurers and payments professionals were focused on at Windy City Summit 2024 in Chicago. Our team was there throughout the conference and have provided three takeaways:
1. AI can enable incredible things, but it won’t solve every problem by itself
AI was top of mind at this year’s Windy City Summit. This comes as no surprise given the proliferation of generative AI models like ChatGPT, Copilot, and Gemini in the last 18 months. Although it won’t solve every problem, in some instances the hype and focus is warranted: Generative AI models have enabled applications that would have been completely impossible two years ago. The most popular use-cases for treasurers and finance professionals have been automated invoice tagging and cash position forecasting.
Attendees were cautioned against taking the Luddite view that machines and AI are going to take all of the jobs. Just like computers didn’t replace office workers, AI is not going to eliminate all treasury and finance workers. We should instead view AI as a tool to enable growth, eliminate tedious “busy work”, and give people room to solve real business problems.
2. Faster Payments are gaining traction and enabling new opportunities
Another major theme was the role of faster payments like RTP, FedNow, and push-to-card. Both The Clearing House and Federal Reserve held sessions discussing their respective payment rails. As the first new settlement methods in the US in almost 50 years, attendees were eager to hear how faster payments could be used.
Some examples included:
- Healthcare & property insurers making instant claim disbursements to cards and bank accounts
- Gig and hourly workers receiving daily and even instant access to wages and tips
- Businesses taking advantage 24/7/365 settlement for making after-hours payments or maximizing days payable
3. Higher interest rates are bringing cash management back to the forefront
Whether the Federal Reserve cuts rates or not, elevated rates are likely to remain for the foreseeable future. As a result, treasurers and corporate finance officers have placed renewed focus on managing both cash balances and the cash conversion cycle.
Interest in money market funds and treasury bills investment have increased due to short-term rates staying at elevated levels. And with some worried about a recession, near-term yields are expected to decline as companies shift to shorter duration investments and greater liquidity.
On the other side of cash management, businesses are reviewing their receivables and payables practices and looking for ways to optimize the cash conversion cycle. Some examples include:
- Reducing days sales outstanding through automated invoice reconciliation
- Limit errors, underpayments, and chargebacks associated with receivables
- Extending days payable by turning to faster payment methods
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