Optimizing Liquidity Amidst Rising Interest Rates: A 2024 Outlook
This article is written by Cobase After the complexities faced in 2023, the financial landscape presents both challenges and opportunities for businesses aiming to optimize their liquidity in the face of fluctuating interest rates. Reflecting on the events of 2023, it becomes clear that understanding market trends and preparing for the future have never been more crucial. This blog post offers insights into the current economic environment and strategic recommendations for liquidity management in these dynamic times. Reflecting on 2023: Setting the Stage for 2024 The year 2023 was a rollercoaster for global economies, marked by continued recovery efforts from pandemic-related disruptions, geopolitical tensions, and varying responses from central banks worldwide. These factors contributed to an environment of uncertainty, with interest rates experiencing significant adjustments as part of broader efforts to control inflation and stimulate economic growth. 2024 Economic Outlook: The Interest Rate Conundrum Looking ahead, the consensus among financial analysts for 2024 suggests a continuation of the trend towards rising interest rates. This forecast is predicated on ongoing efforts by central banks to manage inflation without stifling economic recovery. For businesses, this means a landscape where the cost of borrowing could increase, impacting strategies for managing cash reserves and investments. Strategic Approaches to Optimizing Liquidity Navigating the Future with Informed Decisions The ability to adapt and respond to changing market conditions will be key to navigating 2024 successfully. Businesses that prioritize flexibility in their financial strategies, leverage technology for better decision-making, and stay informed about market trends will be better positioned to manage liquidity effectively in an environment of rising interest rates. Conclusion The outlook for 2024 presents a nuanced picture of challenges and opportunities for businesses focused on optimizing their liquidity. By adopting a strategic approach that includes dynamic cash management, technological investment, and a keen understanding of market trends, companies can navigate the uncertainties of rising interest rates with confidence. The journey through 2024 will require vigilance, adaptability, and informed decision-making to leverage opportunities for growth and stability in the ever-evolving financial landscape. Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.
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10 Things You Need to Know about APIs for Treasury
This article is written by kyriba APIs for treasury continue to be one of the most talked-about technologies as finance leaders look to make their treasury and payments operations more real-time and responsive to market volatility. APIs are critical to the future of bank connectivity, yet they offer significantly more value than connecting treasury systems and ERPs to banks. In a recent webinar, Celent’s Head of Banking and Payments, Patricia Hines, and Kyriba’s Global Head of Marketing Strategy, Bob Stark, explored how APIs are transforming the ways corporate finance teams access and use data. They discussed the many benefits of API adoption, including connectivity, reporting and analysis, accelerated payments, and more. 1. On-Demand, Real-Time Connectivity APIs, or Application Programming Interfaces, are sets of protocols and tools that allow different software applications to communicate with each other. They enable different systems, including banks, ERPs, payment networks, treasury management systems, data lakes, data warehouses, and other internal and external systems, to connect and exchange information on-demand and in real-time. APIs seamlessly embed this data within various workflows across treasury and finance, enabling a complete enterprise picture of cash and liquidity. 2. Up-to-Date Reporting and Analysis Real-time data connected and unified from multiple streams means the most up-to-date information is available for reporting and analysis. APIs can feed into reporting that delivers comprehensive, instant visibility into where your cash is and what actions you need to take. By enabling seamless communication beyond ERP-bank-API connectivity, APIs offer many benefits for reporting and analysis, including: 3. AI and Data Science Because APIs unify and connect data in real-time, they provide clean, solid data and also allow organizations to access more detailed data. APIs help create a data platform, or a “single source of truth,” setting the table for the use of AI and empowering organizations to make data-driven, informed decisions. As Bob emphasized, “You don’t have an AI strategy without a data strategy, and you don’t have a data strategy in treasury without APIs.” The uniform, enterprise-wide data delivered by APIs allows organizations to leverage other capabilities for automation, predictability and analytics. 4. Automatic Translation of File Formats With many different types of formats for bank reporting and payments, format transformation can be challenging, time-consuming and costly. Many banks also have their own file formats and their own communications protocols, presenting challenges for technical on-boarding. Additionally, banks may limit file format options (e.g., BAI or EDI), and the various channels for interaction (host-to-host, SWIFT, domestic networks) add complexity. Further complicating matters is the SWIFT MT to MX migration and the adoption of ISO 20022. By automatically converting formats for seamless communication between disparate systems, APIs help solve the challenge of translating the multiple bank reporting and payment formats used to exchange payment instructions and reporting information. Source: Celent (Copyright © 2023, Celent, part of Oliver Wyman) 5. Accelerated, Secure Payments API technology is revamping how companies manage their payment journey by enabling machine-speed transactions, efficiently and securely. Beyond delivering automated format transformation and streamlined connectivity, APIs enable automatic checks of payments before they are sent to banks. APIs facilitate standardized payment controls, such as digital signatures, additional levels of approval, single sign on (SSO) and audit trails. Additionally, APIs improve payment governance with real-time fraud detection, sanctions list screening, bank account verification and digital policy compliance. Any suspicious activity or detail within a payment instruction means the payment is instantly quarantined, ensuring security and comfort that the right payments are being transmitted to banks. 6. Streamlined Corporate Processes APIs enable improved business outcomes. They can streamline processes, delivery, and intelligence for cash and liquidity management, investing, borrowing, foreign exchange, accounting, supply chain finance and payments. APIs provide the opportunity to re-explore existing processes, encouraging corporates to ask: What can we do with richer information? With faster information? How can we better present information for ourselves and our colleagues? What do we want to do differently and better than we are doing today? 7. Easy to Adopt Instead of creating custom integrations for each bank and payment provider, developers can leverage existing APIs, saving time and resources. API development and implementation is now easier than ever with API marketplaces where the hard work has already been done. Many banks and technology partners offer API marketplaces with pre-built, pre-developed and pre-tested APIs. Organizations can leverage these pre-built solutions to decrease implementation time from months to days. For example, with Kyriba’s API gateway, clients can seamlessly connect via Kyriba to over 1,000 global banks, supported by an extensive format library of 50,000 pre-developed and pre-tested payment scenarios. 8. Avoid the Rip-and-Replace Approach APIs augment, complement and improve–but do not necessarily replace–existing systems. Choosing API solutions doesn’t require a complete overhaul of existing systems. Businesses can integrate API functionalities like real-time reporting and instant payments alongside their current ERP systems without disrupting established workflows. The goal is not a massive rip-and-replace project, but rather the opportunity to enhance existing treasury operations with more on-demand capabilities, facilitating real-time decision-making. 9. Flexibility to View Real-Time Data Whenever, Wherever APIs offer the flexibility to access real-time data from treasury systems and other sources. Combined data from different streams can be fed instantly for viewing in your treasury management system, your ERP, your desktop or your phone. You can consume data where you want and how you want, on-demand and in real-time. 10. How to Get Started with APIs Taking the first step toward adopting APIs involves engaging with your banking partners. While it might seem like a daunting discussion, approaching it as a conversation about connectivity–and exploring the possibilities APIs can deliver beyond ERP-bank-API connectivity–can be insightful. Many forward-thinking banks treat APIs as a product, offering support and sales assistance. Understanding the potential outcomes and benefits before entering the conversation is crucial: APIs offer the opportunity to accelerate and enhance your business processes. Collaborating with your banking partners, ensuring alignment with your technology stack and envisioning the improvements you seek will help you successfully navigate your API journey. Also Read Join our…