The worlds of treasury, technology and banking are no longer operating in their own siloes, as the ability to achieve greater collaboration between the three means that they can now work hand in hand to produce better outcomes for their clients. But is there more that can be done to harness this power?
According to Stephen Logue, Kyriba’s strategic accounts manager, treasury is now opening up to other parts of the organisation. An organisation’s value chain, he said, can be complex, dynamic, connected, and yet fragile at the same time. Supply chain management systems are now well integrated and firmly established within many organisations, with mature levels of process and collaboration, yet he believes there is still more that could be done to ensure that treasury is represented further within this system.
This connectivity network is becoming increasingly important as treasurers are not only at the heart of managing the funding of an organisation but are doing so in the midst of a rapidly changing business environment, one that features interest rate rises, foreign exchange fluctuations, regulatory change and business volatility. Such an environment is adding to uncertainty – but collaboration and the ability to co-create connections between banks and treasury through technology can enable an organisation to have a clearer understanding of its financial position.
“We are now seeing treasurers being able to take data from their systems, visualise this data and collaborate throughout the organisation, creating a two-way dynamic that will help with, for instance, revenue planning and debt management,” Logue said.
This collaboration now goes beyond the four walls of the organisation – Application Programming Interfaces (APIs) can now link a business with its banks via Enterprise Resource Planning (ERPs) technology and Treasury Management Systems (TMSs) so that it can have a very clear picture of its financial position.
“This ability to communicate and connect instantly is becoming increasingly important,” said Félix Grévy, VP Product, Open API and Connectivity at Kyriba. “And the increasing use of collaboration tools, such as Microsoft Teams or Slack, will be a real game-changer.”
Use of such collaboration tools will affect a number of different areas – real-time payments will become more achievable through the use of APIs linked the collaboration tools, while intra-company financing requests can be actioned more quickly. The creation of a ‘data lake’, combined with machine learning enabled through APIs will help build longer-term analysis capabilities that can assist planning on both the costs and revenue sides of the business, analysing both short-term cashflow planning and longer-term forecasting.
“Being able to connect to connect like this will help with demand planning and answer many ‘what if?’ questions around areas such as interest rates and foreign exchange movements,” Logue said, adding that this collaboration will assist other areas such as stress testing and planning cycles.
However, all parties need to work together to ensure consistency, integrity and accuracy of data; by collaborating, these risks can be managed more effectively.
For Mark Evans, HSBC’s global head of Cross Border and Cross Currency Payments, Global Payment Solutions (GPS), one of the big priorities for the corporate banking sector is a focus on ‘microservices’, allowing capabilities to be assembled in new ways to solve client use-cases and problems. “This will be made possible by the increased use of APIs,” he said.
He also highlighted the growth in of real-time payments. There is no doubt that this has been transformational in the retail banking sector, but in the corporate sector, utilisation has not grown as quickly. Evans believes that this is set to change, as real-time payment solutions are increasingly being used to create competitive advantage.
“Companies are now using real-time payments to pay their counterparties more quickly and respond to early payment requests. The addition of real-time payment ‘overlay’ services, such as QR codes and alias’s is also encouraging more payment flows to move to real-time,” he said.
Building on the theme of collaboration, Evans also pointed to how banks can now embed their services within larger technology solutions, which will help make them “easier to discover, activate and consume”. Digitisation will also have the beneficial effect of accelerating the process of opening accounts and onboarding clients. At the same time, the advent of open banking will allow clients to consume banking products that are available on platforms that are not owned by the banks.
Collaboration also plays an important role in supply chain resilience, added Vinay Mendonca, HSBC’s chief growth officer for trade. He observed how banks are co-creating solutions with their clients and fintechs that can help bring enterprises together – again, through the use of APIs, organisations are able to provide supply chain finance, injecting liquidity and extending credit into the procurement process.
“We have seen a move from ‘just in time’ to ‘just in case’ supply chains, but now business wants the best of both worlds,” he said. “But a supply chain is only as resilient as its weakest link, which can often be in the lower tiers of the chain.” APIs, Artificial Intelligence and data can all play a role in securing the resilience of the supply chain, he argued.
Naresh Aggarwal, ACT’s associate director policy and technical, called for a change in mindset, saying the treasurers were too used to putting up with slow payments and legacy solutions. Using the low take-up of Straight Through Payments (STP) as an example, he asked why it is that such technology is not being adopted more widely. Other treasurers agreed that there was a need to be more nimble, while recognising that any change to new technology will potentially be seen as a major implementation project – trust and funding will be required for treasurers to fully utilise available technology.
This is why collaboration between treasurers, banks and technology providers matters so much. As Kyriba’s Logue said: “People are now talking to each other.”
This article is based upon a recent roundtable discussion with corporate treasurers facilitated by the Association of Corporate Treasurers, hosted by Kyriba in association with HSBC.
