The Treasury Last Mile: Where Payment Innovation Goes to Wait
Real-time money is arriving in finance operations built for month-end. Closing that gap is a sequencing problem, not a spending one.
Insurers have spent the past few years modernising the parts of the business customers can see. Premiums can be paid by debit order, card, EFT or PayShap. Claims can be settled in minutes rather than weeks. Broker portals show policy and commission data on demand. By any front-end measure, the industry has gone digital.
Behind the scenes, the money from all those channels still lands in treasury and finance functions designed for batch files, overnight bank statements and month-end reconciliation. A payment can now clear in seconds and then sit unallocated for days while someone matches it to a policy by hand. The constraint on insurance payment innovation is no longer the channel. It is everything that happens after the money moves.
Speed exposes the seams
Faster payments do not remove manual work. They move it downstream and compress the time available to do it. Every new collection channel adds another data format to reconcile against the policy administration system. Every instant claims payment needs a funding decision, an approval trail and a ledger entry, in real time rather than in tomorrow’s batch. Broker and intermediary flows add another layer: virtual accounts, commission calculations, and segregated funds, each of which reconciles cleanly only if the accompanying payment data is complete.
When those connections are missing, the result is familiar. Finance teams manage “real-time” payments through spreadsheets and exception queues, often after hours. Treasury cannot see an accurate cash position until the reconciliation catches up, and so liquidity sits idle as a buffer against uncertainty. The customer experience improved, but the cost of delivering it simply moved to the back office.
The automation gap is a data gap
This is not unique to insurance. Treasurers’ top two priorities today are cash and liquidity management and fraud prevention, and the main obstacle to both is data. Treasurers who layer AI and automation onto fragmented data and manual processes tend to discover that data quality, not technology, is what limits the return.
The organisations getting real value treat automation as a progression in which each stage depends on the one before. Konica Minolta’s treasury team once spent roughly 80 staff hours a month building an 18-week cash forecast from bank data downloaded into spreadsheets. Daily automated bank feeds and structured ERP data now let the team produce a 13-month forecast every week without manual intervention. Better visibility has allowed the business to hold less excess cash and pay down debt, saving an estimated $1.5 million a year in interest and commitment fees.
The order matters. Automated cash application needs clean customer and policy master data. Reliable forecasting needs dependable daily bank connectivity. Advanced analytics need years of consistent, governed history. As we argued in ‘The Sequencing Problem’, firms are rarely penalised for investing too little in this area. They are penalised for investing in the wrong order.
Nothing is truly out of the box
Most insurers cannot rip out their policy administration, general ledger or treasury systems to make way for real-time payments, nor should they have to. As TIAA’s treasurer put it at a recent AFP treasury technology forum, even cloud platforms require process change or customisation, because “nothing is truly ever out of the box.”
The value lies in the connective layer between systems: transforming and enriching payment data as it arrives, automatically matching it to policies and brokers, routing exceptions to the right person, and feeding an accurate cash position to treasury throughout the day. Reporting is part of that layer too, and it is consistently underestimated. Standard treasury reports rarely answer the questions a CFO or regulator asks.
Governance belongs in the same design. With Solvency II and IFRS 17 requiring reported numbers to trace back to source systems, the audit trail must be part of the payment flow from the start, not reconstructed at quarter-end.
Own the logic, not just the system
As automation spreads, a quieter question emerges: who owns the rules? When Konica Minolta’s fintech partner proposed managing the entire data pipeline, the treasurer pushed back. The business owns the process and the data, he argued, and IT’s role is to keep that data consistent.
For insurers, this principle extends to banks and platforms. Matching rules, approval thresholds, broker allocation logic and compliance checks represent hard-won institutional knowledge. Embedded inside a single bank’s or vendor’s platform, that knowledge becomes harder to see, harder to change and more expensive to leave. Keeping it in an independent layer that the insurer controls preserves flexibility as payment rails, banking partners and regulations change.
Start narrow, then build outwards.
None of this requires an enterprise-wide programme on day one. Konica Minolta’s journey began with a single problem, matching customer payments to invoices, before expanding into forecasting and an integrated credit and collections cycle. Each step created the clean data and reusable patterns that made the next one possible.
The insurance equivalent might be automating reconciliation for one broker channel or connecting instant claims payments directly to the ledger and cash position. A focused first project proves value quickly and builds the internal support needed for the next. It also forces the change-management decision many projects avoid. As one treasurer observed, after a certain point, you have to retire the old processes, or teams will drift back to their spreadsheets.
The payoff is not fewer people. It is people redeployed from reconciliation and data gathering to the work treasury should be doing: managing liquidity, controlling risk and helping the business decide which payment innovations to pursue next.
The question for insurance CFOs
Instant payments, new collection channels and tokenised assets will keep arriving. The insurers that benefit will not necessarily have the most advanced front end. They will be those whose treasury and finance operations can absorb each new flow without adding headcount, reconciliation backlogs or audit risk.
So the question is not whether to modernise payments. It is a question of whether the infrastructure behind them can keep up. A useful starting point is an honest look at where money waits today: how long it takes to apply a premium, how much of the cash position is known in real time and how many “automated” flows still end in a spreadsheet.
For 25 years, Digiata has helped insurers, asset managers and banks automate the operations behind their financial flows. Our teams combine deep financial services experience with expertise in integration, payments processing, reconciliation, and workflow automation, connecting modern payment channels to existing treasury, ledger, and policy systems without disruptive replacement.
