Real time treasuries: Banks have an important role

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Real-time treasury is the epitome for corporate treasurers. With shifting expectations dictated by alternative payment providers like Venmo and Paypal, what should banks be doing to respond to this turbulence?

Agile business models is the need of the hour for both banks and businesses – but that doesn’t call for short-sighted, untenable digital transformations at banks and businesses. Agility needs to be driven by strategy not impetuous decisions of convenience driven by reluctance to change.  

With the advent of instant payments and increasing value limits, there is a convincing case for the value proposition of using instant payments to manage corporate treasuries. New business models like just-in-time payments and instant payment on delivery can reduce supplier risk, while promising better reach.

Undoubtedly, one of the staunch drivers of real-time treasury is open banking. APIs, or application programming interfaces are portals that help treasurers use banking services through their own, a third party’s or a bank’s interface. Banks can be the hidden challengers to help treasurers embed banking services like FX and Payments into the corporate treasury platforms and applications. This way, banks can also help offer value-added services to their corporate treasury customers, meeting them where they are.

At its ideal capacity, the management of liquidity and FX risks promises enhanced investment returns. However, patching legacy technology for APIs is no match and the benefits will not be far-reaching. The transformation of treasury into a real-time operation is a joint effort by all players in the ecosystem – banks, corporate treasuries and third party solution providers. After all, one thing is certain – there is no place for manually intensive tasks for the treasurer of tomorrow – he/she will focus on providing strategic insights to his business through value-added insights from his real-time treasury!