Finance

Advancing the Treasury function with technology

Denis O’Brien

27 September 2022 | 4:47PM GMT

The Way Forward

Treasury departments are under pressure and must adapt to rapid technological advancement. Managing multiple liquidity pools, streamlining numerous payment types and maximising value are some of the treasury division's pressure points. With the rise of APIs and the inevitable shift to a digital-first approach, treasurers need to embrace change. This attitude has been further accelerated by the Covid pandemic and remote working, forcing institutions to reprogramme their business processes and workstreams.

If recent history has taught us anything, businesses must prepare for unforeseen disruption and the ability to manage cash flow and reserves. In a volatile economic landscape, access to real- time data and accurate forecasting is the lifeblood of a business. 

Increasingly, treasury departments manage dispersed liquidity pools across multiple jurisdictions and currencies. Yet some treasury functions are becoming more centralised. There is a delicate balance between a consolidated department and a widely distributed cash pool. Get it wrong; profit streams can quickly erode due to forex rate swings. This is particularly prevalent in emerging market economies, where currency swings can be as high as 50%.

However, technology is fighting back, and the horizon is not all doom and gloom. With the impending change within the payment ecosystem (adopting the ISO2022 standard), banks and service suppliers will be able to assist corporates in optimising their data capabilities and payment processes. Furthermore, there are APIs, open banking capability and tools to catalyse growth and change.

So, how do treasury departments evolve to cater to a fast-changing world with the future in mind? The changeover from legacy systems and manual processes to a digital-led solution does not happen overnight. Whatever technology one selects must fit into the requirements of the business units and the company. Ultimately, it is about striving for greater efficiency, automation, transparency and augmenting your cash position and decision-making. If you can achieve this, cost savings kick in, whilst automation unshackles staff to have more time to work on strategic tasks.

One such example is the rise of virtual accounts and their inherent benefits. Virtual accounts are a set of sub-accounts linked to a single ledger account, reducing the requirement for multiple physical bank accounts. They are also multi-industry. Businesses in FMCG, retail, legal, shipping, finance, hospitality, transport or healthcare sector often administer thousands of accounts daily. They need to reconcile accounts, open and close client fund positions and track payments.

By adopting Virtual Account technology, corporates benefit from greater visibility and instant control, translating to quicker reconciliation times, faster customer account management and a streamlined account process. Virtual accounts can also manage single or multiple entity structures and track, report, and settle inter-company loan positions. 

At Ceviant, we believe virtual accounts are a game changer for treasurers. Our clients can create and delete them directly from within the Ceviant platform, relieving them from branch visits or contacting an account officer. Consider pairing virtual accounts with instant payment capability and ERP (enterprise resource planning) integration, and one can start to imagine the uplift in productivity instantly. When you overlay a consolidated view of your cash position into an insightful interface, treasurers are empowered in their decision-making process.

ISO 20022 and the future of payments

ISO 20022 is a globally adopted standard for financial messaging that is changing the way payments are made and processed. Developed by the International Organization for Standardization (ISO), the standard aims to increase efficiency and reduce costs within the financial industry by enabling the exchange of structured data between financial institutions and corporates.

Efficient Cash Management for Law Firms with Ceviant

Examining the common cash management pain points that law firms face and how Ceviant's solutions can help mitigate them.

Making International Payments Easier, Faster and More Secure with SWIFT GPI

How Ceviant uses SWIFT gpi to make international payments swift, secure, and easy.

The Future of Banking is Open

Open Banking allows third-party access to multiple bank accounts via APIs, giving banks new ways to add value and enabling competition from small players. Across the EMEA, open banking initiatives create standards which banks must meet, making it the future of banking.

Dealing with the growing threat of cyber-security for treasurers

Treasurers are responsible for the financial health of their organizations, and they must now take greater care when initiating payments and managing data flow. They need to be aware that every payment, whether it is a cash transaction or an electronic transaction, carries with it the risk of fraud. The pandemic has forced businesses to rethink their operations, which is why it’s so important for treasurers to keep up-to-date with the latest trends in technology, security and compliance.

Advancing the Treasury function with technology

Treasury departments are under pressure and must adapt to rapid technological advancement. Managing multiple liquidity pools, streamlining numerous payment types and maximising value are some of the treasury division's pressure points. With the rise of APIs and the inevitable shift to a digital-first approach, treasurers need to embrace change. This attitude has been further accelerated by the Covid pandemic and remote working, forcing institutions to reprogramme their business processes and workstreams.

Easing Bank Connectivity with Fintech Innovations

Looking at the evolution of banking systems in Nigeria, it is clear there are specific services that banks in Nigeria are already offering, such as providing access to accounts and e-wallets. However, beyond creating accounts for customers, banks are often unable to effectively provide innovative value-adding solutions to customers because of a lack of technological expertise. This is exactly where fintechs fit in.

How treasury fintech is changing the way companies in Africa navigate cash management

There are several challenges for companies in Africa with regard to managing cash but fintech is developing solutions fast to help businesses address these challenges.

Banks and Fintechs: Collaboration Not Competition

Some Nigerian banks may resist fintechs because they regard them as competitors who are taking away their customers, but fintechs have a duty to explain to them that this is not the case. Banks have the banking infrastructure which is effectively complemented by fintechs’ IT solutions. Fintechs essentially help deepen the relationships that banks have with their customers by providing complementary services. Fintechs are not banks because they do not hold funds. Customers’ accounts are held in and managed by the banks and the flows through the accounts remain there.

The LEI Future - eliminating data duplication for clients and businesses

The LEI future eliminates unnecessary data duplications for clients and financial institutions. Legislators have increasingly called for greater transparency in domestic and especially international financial transactions in recent decades. This is due to the need to curb crime, notably terrorist financing and money laundering. The regulatory environment has progressively extended the list of information that must be collected and stored about customers to achieve this.

Why APIs are essential to enterprise payment optimisation

Application programming interfaces (APIs) help consolidate enterprise payments and reduce the need for third-party intermediaries.

Treasury Payments Reinvented

Streamlining payments into a simple and effective process can often be elusive to corporates. An ineffective payment system leads to inaccurate reporting, loss of valuable time and, ultimately, a distressed treasury department. These potential issues have been further amplified by the current business climate, where erratic supply chains and remote working environments have become the norm rather than an exception.

Tags

Ceviant
Finance
Treasury
Virtual Accounts
API