Treasurers know that the future will not be like the past and appreciate the difficulty of cutting through the hype to determine which technologies will eventually have most impact.
But an occasional wander along the leading and bleeding edges of technology remains worthwhile: it can open our eyes to the shifting boundaries of what’s possible and technologies that could help to transform not just corporate treasury, but entire industries.
“A core part of our business revolves around payments and we spend a lot of time thinking about how they will evolve in the future,” says Rob Matles, managing director and head of innovations programmes at JPMorgan Chase & Co. When the bank wanted to test some of its Onyx blockchain payment innovations, it looked to what may be one of the few remaining frontiers for finance: space.
In 2021 its Onyx business unit made a tokenised value transfer in space, executed via smart contracts on a blockchain network established between two satellites in a low Earth orbit.
“Space exploration is becoming increasingly well-funded and presents an exciting opportunity to deploy financial technology to create a brand-new payments infrastructure leveraging blockchain,” says Matles.
The success of this test transaction and its decentralised approach hints at the potential of combining blockchain and the Internet of Things, in space and on Earth. It takes us closer to a ‘machine-to-machine’ economy, where an autonomous machine could, for example, lease itself out, hire service and repair engineers, and pay for this using its own bank accounts – even if this is not yet a commercial reality.
Quantum computing is also some years away from commercial viability, but (like space exploration) investment in quantum computers (QCs) and their power are both increasing rapidly. “If current trends persist, quantum computing is likely to cause disruption sooner than many people think,” says Harvey Lewis, partner, Client Technology & Innovation, at EY, who suggests businesses start planning for this new era.
A core part of our business revolves around payments and we spend a lot of time thinking about how they will evolve in the future
QC isn’t just significantly faster than traditional computing, it’s fundamentally different. The EY Quantum Readiness Survey 2022 offers a primer on the tech, its challenges, progress, ways to plan for it and potential use cases that may interest treasurers: risk analysis and risk management, cryptography for near instantaneous payments and other digital messaging, transaction settlements and credit scoring, for example.
One barrier to commercial QC is the need for temperatures around -273.15°C (-459.67°F). But in 2021 Quantum Brilliance unveiled the first ‘room-temperature’ machine.
Although its five-qubit capacity is dwarfed by the QCs of Google (72 qubits) and IBM (65 qubits), they don’t operate at room temperature; being able to do so will make QCs cheaper to miniaturise, build and run – getting them on to treasurers’ desks and into normal data centres.
What’s normal in data centres is evolving. There are environmental concerns and some cooling systems struggle to operate during heatwaves. Microsoft’s Project Natick has been exploring ways to more efficiently and sustainably power and cool data centres, by locating them underwater and using offshore renewable power.
Beijing Highlander is now building a commercial underwater data centre near Hainan Free Trade Port in China.
The point of digital twins is to put your data to work to better support the business
Data centres in space are also on the horizon. NTT and SKY Perfect JSAT recently formed the Space Compass Corporation (SCC). This joint venture aims to establish the world’s first integrated space computing network. The availability of ultra-high-speed real-time data-relay services is expected in Japan by 2025, with a global rollout and further space data centre expansion to follow.
‘Contributing to a sustainable society’ is one of SCC’s stated aims. That word ‘sustainable’ often does a lot of heavy lifting. In this context, it translates into: “…creating ICT infrastructures that support a number of fields, including energy, environment and climate change, disaster prevention…”. The impact of space technology on sustainability remains to be seen; although modelling this (and other) possible futures is getting easier.
The use and potential of digital twins is growing. Their virtual representations of devices, organisations, processes and systems that digitally model real-world properties, conditions, attributes and relationships have been used for decades in engineering and manufacturing, to run complex simulations and improve decision-making. Recent tech developments are making them more accessible and supercharging their potential.
Digital twins can help treasurers to improve cash and liquidity forecasting or reach business sustainability goals
Being able to dynamically capture and process large amounts of data from multiple sources and using artificial intelligence techniques such as machine learning to exploit it, is taking digital twins into sectors such as financial services.
Digital twins can, for example, help treasurers to improve cash and liquidity forecasting or reach business sustainability goals – and they will be building blocks in the metaverse.
“The point of digital twins is to put your data to work to better support the business,” says Alfonso Velosa, VP analyst, Gartner. Innovations that make it easier to access, process, share and store vast amounts of data underpin all the emerging technologies above and many others that can or could be a boon to treasurers, who understandably view them with caution.
“With any new technology, I think about whether it’s what we need and whether it can benefit not just treasury, but the whole company,” says Royston Da Costa, assistant group treasurer at Ferguson plc, a North American plumbing and heating products distributor.
“Treasury has an important role to play, influencing technology decisions not just in treasury and finance, but other parts of the company, too.”
This perspective is echoed by Britta Döttger, group treasurer at Swiss multinational healthcare company, F Hoffmann-La Roche: “We don’t have a separate treasury innovation strategy. The business use case comes first, then we look at technologies and how we can use them.”
The priority is to support and adapt to the company’s business needs and its digital innovation strategy; as a payment portal project to enable digital business models highlights.
Some emerging technologies can still seem more appealing than others. “I find quantum computing the most exciting technology,” says Da Costa, who is also looking forward to meetings in the metaverse.
“Avatars, holographs and augmented reality will make it feel as if people are in the room together,” says the treasurer, who would prefer this to virtual meetings of disembodied heads.
As with all tech, whether the reality lives up to the hype remains to be seen.
A digital twin is a virtual representation that serves as the real-time digital counterpart of a physical object or process. Though the concept originated earlier (attributed to Michael Grieves, then of the University of Michigan, in 2002), the first practical definition of digital twin originated from NASA in an attempt to improve physical model simulation of spacecraft in 2010.
Lesley Meall is a freelance technology journalist
This article was taken from Issue 4, 2022 of The Treasurer magazine. For more great insights, members can log in to view the full issue. If you're not an ACT member, you can sign up for eAffiliate membership