What connectivity conundrum? Giving treasurers what they thirst for: freedom of data

Chaired by the ACT, Bill Wrest, Senior Strategist at Gresham Technologies recently sat down with Harcus Copper, Head of Integration and Information Services at Barclays Digital Banking, for a webinar on the connectivity conundrum treasurers face and why it inevitably boils down to having the right connectivity and visibility of your multibanking relationships. Here, for The Treasurer Magazine, Bill shares his key takeaways and addresses those unanswered questions generated by the audience during the webinar.

It’s no secret that the role of the treasurer is changing. COVID-19 is placing a renewed focus on supply chain management, cash flow and protecting working capital, creating a necessary but pivotal shift among treasury from being operationally to strategically driven as the first wall of protection for the company. In turn, the quality, visibility and immediacy of data when assessing liquidity, risk and multi-banking relationships becomes absolutely vital in order to navigate this change successfully.  

Whilst COVID-19 has created barriers, there has been a lot of talk recently about digital transformation and why now is in fact the best time to address systemic risk and gaps within the treasury function. One of the ironies of the current crisis and its unprecedented economic effects is that, in a sense, it re-emphasises the sheer scale of the liquidity visibility problem that has plagued treasuries for decades. As unforeseen challenges transform into what seems like daily occurrences, COVID-19 represents a vitally important new opportunity for treasury, but one that is effectively inaccessible without consolidated multibank connectivity. 

Now is the time for treasurers to be asking themselves: What is the state of my multibank connectivity? How do I achieve 100% visibility of my multibank relationships in the face of an increasingly diverse business risk environment? How do I engage with banks and fintechs and what role do they have to play here? Those that don’t will fail to innovate and adapt in this new normal as well as future proof their business against what’s to come.

To gain further insight into the current challenges faced by treasurers, I’m revisiting questions that came out of the interactive poll during the webinar discussion alongside my two cents on how to tackle them:

• What facet of treasury concerns you most under lockdown? 36% of the audience polled favoured forecasting, followed by 33% for liquidity, with cash management following at 21%. I would say these are all umbilically joined – forecasting is a fundamental part of liquidity and cash management that is heightened during the lockdown crisis.
• Do you see the impact of Open Banking for API connectivity between corporate, banks and third parties? API as a concept is not new and a lot needs to happen in terms of consistency for it to work well for corporates. For me, it’s about requesting my data when I want it and in the way I want to – not batch processing or end of day reporting. It needs to move into a real-time “pull not push” environment. SWIFT recognise this with their GPI initiatives.
• A lot of the treasury systems still seem to be built in a rigid fashion. What is the way forward? Ultimately there is not enough enterprise wide connectivity – it is no good being able to see some of my banks and accounts. Instead, I need my whole liquidity position at the touch of a button. Treasury systems have a role to play in the more specialised and esoteric areas of treasury, but are we now looking at the need for specialised cash management systems that integrate with banks, treasury systems, ERP systems etc?
• In the past, there have been off-the-shelf integrators for ERP and banking platforms, as well as pre-integrated solutions from a bank.  Which model is more sustainable? I do not think it is about sustainability – rather, it is about futureproofing and connecting the treasury environment enterprise-wide. File formats should become an irrelevance. I do not believe this is a core competency for a Bank and should also not be the responsibility of the Corporate or their internal IT.
• With the emergence of API and Open Banking, do you think it likely that banks will be forced to compete directly with TMS providers in order to remain relevant to their clients? Or is that a line that cannot or does not need be crossed? Clients will always need their banks for traditional services and advice. However, banks do need to extend their value chain particularly in the area of cash management. The way to do this is through specialist collaboration rather than “go it alone” development.

As Harcus joined me for the discussion, I invited him to comment on my thoughts above: “For me, the key is giving Treasurers access to choices that help ensure the best solution for their needs; not presenting the proliferation of formatting and technical capabilities as if they were the choices in themselves. 

“Utopia will be to ensure that whatever the chosen back office application is (be that a full-blown ERP, TMS, Accounting Software or even a spreadsheet), it can seamlessly draw all of the data it needs from the bank for liquidity management/reconciliation/forecasting and securely instruct payments for settlement via the most expeditious route. Why should the treasurer have to deal with what format that data is in or what “pipe” it flows through?” 

We’d like to thank the audience for taking part in the webinar and hope it was both relevant and interesting. Whilst the above captures the essence of the discussion, there are clearly many unanswered questions and challenges that treasuries face in this new post-lockdown environment. If you would like to discuss the problems or issues that you have around your treasury and cash management data, reporting and integration then don’t hesitate to get in touch:

Bill Wrest, Senior Strategist at Gresham Technologies – bwrest@greshamtech.com
Barclays Corporate Banking – https://www.barclayscorporate.com/contact-us/