How API and ERP Integrations Are Transforming Corporate Treasury
This article is written by Kyriba While there are many benefits, businesses are yet to grasp the full potential of API connectivity, especially for ERP integration, and even more importantly, how non-technical teams such as treasury can take full advantage of API solutions. During KyribaLive 2023, Kyriba’s Félix Grévy, VP of Connectivity and Open API, and John Brandt, VP of Product Connectivity, explored the transformative potential of APIs. Providing updates on Kyriba’s Connectivity-as-a-Service solutions, Félix and John also shed light on how a technology partner like Kyriba assists treasurers on their API journey. APIs Empower Financial Professionals Simply put, an API is a program that allows multiple pieces of software to “talk” to each other. APIs are like “bridges,” enabling two separate applications to work together and share data. They allow developers to access certain features or functionalities of software applications without having to understand the underlying code or architecture. In the world of finance, APIs are enabling real-time treasury management and empowering finance professionals like never before. They connect internal and external systems, facilitating real-time data retrieval for use cases such as bank balance and transaction reporting, cash flow forecasting and FX exposure management, integration of trading portals, market data providers and AI tools. Building on this point, Félix and John elaborated on the three pillars of Kyriba’s API connectivity solution as an example to demonstrate how APIs can be used in finance and treasury: Looking towards the future of API adoption, John explored the untapped possibilities of APIs. John emphasized how Kyriba envisions exciting developments in how to integrate ERP with TMS, including expanding ERP integrations, incorporating third-party data sources, enabling event-driven orchestration through webhooks and even AI-generated integrations. Expanding on the topic of artificial intelligence (AI), John and Félix remarked how AI presents real opportunities for ERP integrations. Although there is still a lot of maturing to do, developments such as Open AI ChatGPT and Microsoft Copilot Artificial Intelligence show the potential for AI to assist treasurers with complex tasks. By leveraging these powerful AI tools, finance professionals can transform their daily work, ask questions on reports, uncover valuable insights and receive intelligent suggestions. APIs play a pivotal role in enabling these tools to interact seamlessly among the systems, allowing technology vendors to harness the growing power of external AI technologies and natively integrate them to their own solutions. How Kyriba Enables Embedded Treasury for Clients Recently there has been a growing interest in embedded finance and embedded treasury. John delved into Kyriba’s APIs for ERP integration, spotlighting how Kyriba already offers a set of packaged integrations that extend and embed the treasury core workflows into other business systems: Despite the high interest level for embedded treasury, clients are often lacking the expertise or IT resources to implement such integrations. Kyriba’s Connectivity-as-a-Service is designed exactly for such client needs. John overviewed the options Kyriba makes available to our clients, prospects and partners. With a versatile array of ERP integration scenarios, Kyriba guarantees the freedom and flexibility to accommodate enterprise IT complexity and sophisticated business needs. INTEGRATION SCENARIO DESCRIPTION SUITABLE FOR Bring Your Own Data (BYOD) Client handles data extraction, transformation and transmission to Kyriba. Customers with legacy applications or broad existing SFTP landscape Kyriba Packaged ERP Integrations End-to-end solution. Kyriba handles data extraction, mapping transformation and transmission via API to Kyriba. Clients with new integrations or with minimal workflow customizations À La Carte Hybrid custom integration. Allows use of individual Kyriba integration components. Clients can mix and match integration methods. Clients with complex landscapes, including middleware or legacy platforms Custom Direct API Connect Custom-built extract and mapping. Clients can use open APIs from the Kyriba Developer Portal to build workflows to meet their specific processes. Companies with complex workflows or those who desire full control of their API orchestration Transforming Treasury with API-Driven Connectivity Connectivity is key to successful treasury management and APIs are the catalysts for treasury transformation. With real-time data exchange contributing to a more connected and efficient financial ecosystem, API connectivity empowers treasurers with the latest financial information and the flexibility to meet evolving business needs. The benefits are many and the untapped potential of API connectivity, especially for ERP integration, remains a growth opportunity for treasury. With embedded ERP workflows to support core treasury needs, treasury can streamline processes and make more informed decisions. To stay ahead, it is time for treasurers to take advantage of exciting possibilities in API adoption, including AI integration opportunities. With its Connectivity-as-a-Service solutions, Kyriba offers flexible, game-changing solutions for the office of CFO to build a truly connected and comprehensive financial ecosystem. Also Read
Franklin15 Questions for Treasury to Ask Themselves & Their Vendors During Technology RFPs
This article is written by TIS In 2023, data shows that treasury teams are expected to continue investing significantly in new technology solutions. These plans include the adoption of new ERP and TMS solutions. As well as more “disruptive” technologies like artificial intelligence (AI) and machine learning (ML). As practitioners and business leaders prepare their budgets and move forward with their selections, the following questions can be used as a guide for determining the key ingredients of a successful project. Our hope is that these tips for treasury management will help treasury refine their strategy for securing project approval, collaborating with other internal stakeholders, preparing an RFP or RFI, measuring the ROI of their project, and planning for onboarding to avoid hurdles and common sources of delay. Context: Treasury’s Technology Spend Remains Elevated in 2023 Despite the economic headwinds that have impacted much of the global business environment throughout 2022 and early 2023, data from recent months has shown that treasury groups are still planning to invest significantly in both additional headcount and new technology. As evidence, a recent TIS survey found that at least 40% of practitioners were expecting to bolster their technology stack across numerous functions in 2023, with a focus on areas like cash management, forecasting, working capital, payments, and security. Additional research from prominent industry bodies like AFP and Strategic Treasurer have yielded similar results. However, in order for these technology projects to have the desired effect and yield positive results, treasury teams must be very strategic and intentional with their approach. Because there are a variety of internal and external challenges that can obstruct an onboarding timeline, it’s critical for organizations to perform as much due diligence as possible before the project kicks off. It’s also important to collaborate with other internal stakeholders ahead of time to ensure adequate buy-in, approval, and planning. To help Treasury walk through all the potential factors that could impact their project, the following questions can serve as a point of reference: 15 Questions for Treasurers to Ask Themselves & Their Vendors During Technology RFPs & Implementations 1. What is typically included in a request for proposal (RFP) or request for information (RFI) as treasury groups begin the technology selection process? How is this process managed? How many vendors should be considered? RFIs and RFPs delivered by treasury to potential vendors often request information related to the scope of capabilities offered by each vendor, as well as info related to their size, location(s), staff count, client base / composition, revenue, and ownership structure. Additional questions related to the hosting setup, pricing schema, customer support structure, and onboarding approach are also common. Although the number of vendors included in an RFP or RFI varies, what’s important is that practitioners include enough options to establish an adequate understanding of what’s available in the market, without overwhelming themselves with an excessive number of applicants. In most cases, practitioners may reach out to 10-15 vendors before creating a shortlist of 3-5 and taking a more comprehensive look into these select few before making a final selection. 2. What other internal stakeholders should be involved in a treasury technology implementation or onboarding project? Commonly, treasury will need to work with their CFO as well as peers in accounting, IT, AP, AR, Legal, and HR to ensure a successful project. For the most part, collaborating with other financial departments will center on ensuring adequate buy-in and approval, with ample consideration of how it will benefit all of these stakeholders, and not just treasury. At the same time, treasury must plan to work with accounting and AP to determine how the new solution will integrate with existing processes and systems to streamline communication, reporting, and payment workflows. Regarding IT, treasury must pay careful attention to ensure that any required in-house configuration or support is properly planned for and documented, especially in cases where internal bandwidth is already constrained. And finally, Legal assistance will be needed to review contracts and ensure compliance, while HR teams may support by managing user permissions and admin roles as the new solution goes live. 3. How can treasury most effectively ensure buy-in from other stakeholders for their projects, including the CFO, AP, and Accounting? Showcasing the benefits that a treasury new solution will provide to other stakeholders in terms of improved reporting, more accurate data, faster insights, cost-savings, or greater control and security will all go a long way in winning approval. It is recommended that treasury approach their peers, particularly in accounting, AP, and IT, long before an RFP or RFI is launched to learn more about the needs of other departments and determine how any new solution they implement could also work to address their requirements. For instance, identifying ways that the adoption of a treasury solution that offers real-time financial reporting and payments workflows will help accounting, AP, and the CFO all better perform their own responsibilities can make a huge impact in winning their support. And if a CFO also sees widespread support for a project internally and understands that the benefits are multifaceted, there will be much greater impetus to push forward. Similarly, if IT understands up-front what their responsibilities are and has time to plan, there will be much less confusion and delay after the project begins. 4. How should treasury balance collaboration with their IT teams, banks, and vendors when handling onboarding and other configuration tasks? Given the predominantly cloud-based era of treasury software that exists today, practitioners may find that a growing proportion of onboarding and implementation tasks can be handled by the vendor’s team, rather than their own. However, there will almost certainly be tasks that are assigned to themselves and internal IT, and there’s also the potential for banking partners and other external sources to be involved as well. If treasury plans to connect their new solution with various banks and back-office platforms – including those at other entities – then the effort required by all associated teams will become more significant. For this reason, treasury should…
How to improve payment security for treasury & finance teams
This article is written by Nomentia Most larger companies process hundreds, if not thousands, of outgoing payments every day. These payments are crucial for the business and must be handled accurately and punctually. Yet, as the number of payments increases, their management can become challenging. Particularly when dealing with tens or even hundreds of bank accounts. Oftentimes, treasury and finance teams have to deal with a layer of complexity when they need to improve payment processes. To protect themselves against payment errors, fraud, or making payments to sanctioned beneficiaries. Which often requires implementing payment security process controls and other security measures. In this article, we’ll talk about why it’s critical to have secure payment processes in place. What threats could your organization be facing. And how treasury and finance can tackle payment security within their own scope of work. While keeping processes as efficient as possible. As a bonus, we’ll provide a fraud risk management framework that can make dealing with process improvements less overwhelming. Why are payment security and controls more relevant than ever before? Financial scams are often directed towards treasury and finance teams, making these teams important stakeholders in payment security projects. In collaboration with IT and security professionals, they play a crucial role in ensuring payment security. Trustpair, SAP, and Accenture, payment did a survey that showed payment security is a top priority for finance and treasury professionals. With the increase in incidents of fraud and cyberattacks, companies can no longer ignore payment security. As a result, most teams are now actively reviewing their organizational processes to enhance safety. The survey also revealed that 56% of US-based companies fell prey to payment fraud in 2022. IN 2022, 56% OF US COMPANIES HAD STILL FALLEN PREY TO PAYMENT FRAUD. TREASURY & RISK SURVEY COMMISSIONED BY TRUSTPAIR & GIACT The research study revealed that treasurers expect banks and system providers to take active role fighting against fraud attempts. To meet this growing demand, many advanced payment and TMS vendors have developed solutions to enhance payment security. Differentiating between the types of payment issues that can occur Even though some solutions provide the full suite of technical features for tackling payment errors, sanctions, and fraud. It is still important to differentiate between the security threats treasury and finance face because they require different approaches. Let’s consider some of the most common threats that can occur: What belongs to payment security from a treasury and finance perspective, and how can you tackle it? The question remains: what is really included in payment security from a treasury and finance perspective? And which threats can actually be fought by them? This can vary greatly, depending on the organization. The experience of teams, and the policies treasurers have established regarding security, among other factors. Different treasury professionals may have different opinions on what payment security entails. However, we have noticed some common themes that treasurers at our clients focus on from a technological standpoint: Avoiding erroneous payments Manual processes are susceptible to errors, particularly when they are performed repeatedly, leading to handler fatigue. This commonly results in erroneous payments through typos, outdated vendor master data, or mixing up beneficiaries, for example. These errors can be compounded over time. Resulting in time-consuming efforts to correct them, such as liaising with all involved stakeholders or seeking assistance from banks. “MASTER DATA IS CRITICAL FOR PROCESS CONTINUITY. DATA ARE ASSETS, AND IF WE TALK ABOUT MASTER DATA, THAT IS REALLY A KEY ASSET, AND YOU NEED TO MANAGE MASTER DATA LIKE YOU MANAGE OTHER KEY ASSETS.” MARK ROELANDS, RISK & COMPLIANCE CONSULTANT, GRC CONSULTING An automated payment system, connected between your ERP and banks, can keep your master data automatically updated. And also, avoid outdated information. You can also avoid errors by setting up rule-based process controls. Or automated matching processes for reconciling financial records with bank statements. For larger single payment sums, double verification by a second person can be helpful in preventing errors. Ensuring payments aren’t sent to any sanctioned beneficiaries To comply with regulations and ensure security, most companies must check their payments against unwanted beneficiary lists. This can be achieved by verifying payments against public lists like OFAC’s, EU’s, and other institutions. As well as private blocklists or allow lists. As world politics continue to shift, these lists keep evolving, and hence, they need to be updated regularly. Manual sanctions screening, i.e., uploading and downloading spreadsheets against sanction databases,. Or manually searching lists each time a payment batch is processed, can take a lot of time. Therefore, our customers have found that sanctions screening is most suitable as an automated step of a payment process flow in a payments hub every time payments are executed. Preventing fraudulent payments Fraud is a recurring topic for many companies and is challenging to spot when hundreds of daily payments go out to various stakeholders. However, preventing fraud is critical, as the losses can affect cash flow and liquidity planning. Organizations must tackle multiple types of fraud, each requiring a slightly different approach. Some of the most common frauds are wire transfer scams, phishing, and fake invoicing. On the one hand, most of these derive from human vulnerabilities; hence, you should educate employees to identify such fraud. On the other hand, intelligent payment technologies can recognize some of these irregularities as they stand out from ordinary payments. By scanning vendor master data automatically, for example. And, of course, larger payment sums should always be verified by several people. So that the financial loss is not too significant. To avoid internal fraud, users should be given limited rights in payment processes. There should always be several people checking payments regularly. And the consequences of fraud should be made clear in Treasury policies to avoid any ambiguity. Ensuring that payment processes are standardized and creating company-wide visibility Most companies we help have many local payment operations worldwide, where processes and systems can differ per location. This usually leads to a lack of transparency over processes and security, even the cash flow, on…
Strategizing Finance Projects: Setting Priorities for Success
This article is written by Cobase In this fast-paced world, effectively strategizing and prioritizing projects throughout the year is crucial for achieving organizational goals and maintaining competitive advantage. Finance teams face the challenge of balancing short-term operational needs with long-term strategic initiatives, all while navigating a constantly changing economic landscape. This article explores how finance professionals can effectively plan and prioritize finance projects over the course of a year, ensuring that resources are allocated efficiently and strategic objectives are met. Understanding the Landscape Before diving into project planning and prioritization, it’s essential to understand the internal and external factors that influence finance operations. This includes regulatory changes, market trends, technological advancements, and the overall strategic direction of the organization. A thorough analysis of these factors provides the foundation for informed decision-making throughout the year. Setting Strategic Objectives The first step in strategizing finance projects is to set clear, measurable strategic objectives aligned with the organization’s goals. These objectives should encompass both immediate operational needs and long-term strategic aims, ensuring a balanced approach to financial management. Objectives might include improving cash flow, reducing costs, enhancing financial reporting accuracy, or investing in new technology to streamline operations. Prioritization Framework Once strategic objectives are set, prioritizing projects based on their potential impact, resource requirements, and alignment with organizational goals becomes the next step. A prioritization framework can be invaluable in this process, helping to objectively assess each project. Common criteria for prioritization include: Agile Planning Approach Adopting an agile planning approach allows finance teams to remain flexible and responsive to changes throughout the year. This involves setting shorter planning cycles, regularly reviewing project progress, and being prepared to adjust priorities as new information becomes available or as circumstances change. available or as circumstances change. This approach ensures that the finance team can quickly respond to unexpected challenges or take advantage of new opportunities. Communication and Collaboration Effective communication and collaboration across departments are essential for the successful implementation of finance projects. Regular updates, stakeholder meetings, and collaborative planning sessions ensure that everyone is aligned on project goals, progress, and changes. This not only fosters a culture of transparency and accountability but also encourages cross-functional cooperation, enhancing the overall success of finance projects. Monitoring Progress and Performance Continuous monitoring of project progress and performance against predefined metrics is critical. This involves setting up key performance indicators (KPIs) for each project, regularly reviewing these metrics, and conducting post-project evaluations to capture learnings and improve future project planning. Regular reviews also provide an opportunity to celebrate successes and recognize the contributions of team members, boosting morale and motivation. Leveraging Technology Technology plays a pivotal role in streamlining finance operations and enhancing project management. Investing in the right financial management software, project management tools, and data analytics platforms can automate routine tasks, provide real-time insights, and facilitate better decision-making. Technology can also help in scenario planning and risk management, two critical aspects of financial project management. Conclusion Strategizing finance projects throughout the year requires a careful balance of strategic planning, agile execution, and continuous evaluation. By setting clear priorities, adopting an agile approach, fostering collaboration, and leveraging technology, finance teams can effectively navigate the complexities of financial management. This not only ensures the successful completion of finance projects but also contributes to the overall strategic success of the organization, driving growth and competitiveness in an ever-changing business environment. 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.
Navigating the Future: Harnessing Artificial Intelligence in Treasury for Efficient Cash Forecasting and Fraud Detection
In the dynamic landscape of corporate finance, treasurers and finance professionals are increasingly turning to artificial intelligence (AI). In order to enhance their capabilities in cash forecasting and fraud detection. While AI presents unprecedented opportunities, it is essential to recognize its role as a facilitator rather than a replacement for human expertise. This article goes into the strategic use of AI in Treasury functions. It specifically focuses on cash forecasting and fraud detection. While emphasizing the importance of a comprehensive data strategy and the key role of human oversight. 1. The Foundation: Building a Robust Data Strategy Before diving into the realm of AI, treasurers must establish a strong foundation through a well-thought-out data strategy. This involves seamlessly mapping data points from various internal systems to create a unified and comprehensive dataset. The availability of high-quality, reliable data is crucial for the success of AI applications in treasury. 2. Cash Forecasting: Unleashing the Power of “Artificial Imagination” Cash forecasting has traditionally relied on historical transactions and predictive analytics. AI brings a paradigm shift, introducing the concept of “Artificial Imagination”. Unlike mere automation, this term emphasizes the creative and decision-making capabilities of AI. Machine learning algorithms analyse historical data to identify patterns, enabling treasurers to make more accurate predictions about future cash flows. While AI significantly improves forecasting accuracy, it is essential to underscore that it should be viewed as a tool to assist and increase human decision-making rather than a standalone solution. Treasurers should remain vigilant and continue to implement upfront controls, including rigorous validation processes. 3. Fraud Detection: Strengthening Defenses with AI The battle against fraud requires constant vigilance, and AI emerges as a powerful ally in this endeavour. Machine learning algorithms can analyse vast datasets in real-time, identifying anomalies and patterns indicative of fraudulent activities. However, it is crucial to recognize that AI complements existing fraud detection measures and should not replace fundamental controls. Treasurers must continue to implement robust internal training programs to keep their teams abreast of the latest fraud tactics and ensure that AI systems are aligned with the organization’s risk tolerance. Moreover, AI can empower finance professionals to focus their attention on strategic aspects of fraud prevention, such as developing proactive strategies and refining controls. 4. A Strategic Approach: Walking Before Running While the value-add of AI is undeniable, treasurers are advised to adopt a strategic approach, ensuring that foundational processes and workflows are fine-tuned before integrating new technologies. This involves critical self-assessment, aligning with organizational goals, and fostering a culture of continuous improvement. People remain at the heart of this transformation. AI is not a replacement for treasurers but a catalyst for shifting their focus to more value-added, strategic tasks. By automating routine and time-consuming activities, AI allows finance professionals to elevate their roles as business partners, contributing meaningfully to the organization’s success. In conclusion, the integration of AI into Treasury functions is a journey that requires careful consideration and strategic planning. Embracing artificial intelligence (or, as you know now, artificial imagination!) in cash forecasting and fraud detection empowers finance professionals to be more efficient, proactive, and strategic in their roles. However, success hinges on recognizing AI as an augmentation tool and preserving the invaluable human touch in financial decision-making. ALSO READ
Benjamin DefaysTax considerations in light of Transfer Pricing when setting up Zero-Balance Cash Pool arrangements
International companies are taking advantage of group synergy by entering into cash pool arrangements to support a group strategy. This strategy usually includes improved cash management and interest yields on cash. Cash pool arrangements are rarely (or not at all) found between independent parties. Such arrangements may attract the attention of local tax authorities. This will therefore be subject to scrutiny. When local Tax Authorities challenge Cash Pool arrangements, the result may be: ALSO READ Some countries (such as the United Kingdom, Germany, and Australia) have transfer pricing guidance or tax rules on the treatment of cash pooling arrangements. Other countries may lack such guidance or tax rules. Also, a cash pooling arrangement could be treated as something other than a short-term cash pool balance. If, e.g., balances have been outstanding for a long time. Or if the funds are used for a different purpose than that intended. Therefore, there is a risk of re-characterization of the cash pool transactions by local tax authorities. They can consider cash pooling arrangements as a loan or guarantee or a mixed contract with a different result. Transfer Pricing Rules and Tax Guidance in Selected Nations Below is a summary of legal cases in Poland, Switzerland, Denmark, and Norway. It illustrates how various tax authorities may scrutinize and challenge zero-balance cash pooling arrangements. Having consequences from a tax and transfer pricing perspective for companies that enter into cash pool arrangements. These cases, together with the “OECD Transfer Pricing Guidance on Financial Transactions—Inclusive Framework on BEPS,” may support companies in establishing a proper framework. From a transfer pricing perspective, to manage interest remuneration in cash pool arrangements. Having a well-documented and professional rational embedded in cash management agreements between individual group members and the cash pool leader (usually the central Treasury) may abate the drive from tax authorities to challenge the company’s cash pool arrangement; at least it will limit possible challenges and/or discussions. Please note: Cases are presented as case dates, references, and summarized court decisions. 1. Danish Revenue Authorities 2. Norwegian Revenue Authorities 3. Swiss Revenue Authorities 4. Polish Revenue Authorities Importance of Proper Cash Pooling Agreements With growing demand from governments to limit tax evasion or tax avoidance structures, revenue authorities across the globe are more and more discussing and challenging the transfer pricing elements of cash pooling arrangements (both from the perspective of te cash pool leader as well as the participants). Based on the sample cases presented above, together with the “OECD Transfer Pricing Guidance on Financial Transactions—Inclusive Framework on BEPS,” I strongly advise companies that have entered into cash pooling arrangements or are about to enter such arrangements, to ensure proper cash pool or cash management agreements are set up between the participating group members and the cash pool leader (usually central Treasury). Such agreements will require the following elements to be included: Paul Buck is a Treasury Associate with one of our partners, Percunia Treasury and Finance and is available for any project. Fill out the contact form below to get in touch for more information about Paul and his capabilities. Thanks! Notice: JavaScript is required for this content.
Paul BuckA Guide to the Emergence of Instant Payments Globally & How to Navigate Them
This article is written by Treasury Intelligence Solutions In the ever-evolving world of financial transactions, the adoption of instant bank payments has become a catalyst for transformational change in both the corporate and consumer sectors. Today, this transition from traditional payment methods to real-time, 24/7 transactions is reshaping how businesses and individuals navigate the financial landscape on a global scale. This article will explore the evolution of instant payments within the corporate sector and more specifically, how their adoption is impacting the world of treasury and finance. We will begin with exploring the primary benefits associated with their usage before delving into the main use cases that exist in 2024. Next, we will evaluate current challenges that are obstructing the adoption of real-time payments and explore several of the leading institutions and payment systems tasked with real-time deployment across the world. Finally, we will demonstrate how the TIS cloud platform enables corporate treasury and finance teams to adopt real-time payments gradually without abandoning their traditional payments and reporting channels. Instant Payments Revolution: The Benefits Instant payment schemes have been making waves worldwide, offering unparalleled advantages for businesses and individuals alike. When we examine the underlying benefits in the corporate realm, there are several key factors driving their adoption: Speed & Accessibility: The main characteristic of instant payments is their speed. Regardless of the geographical location or the time zone, users can execute transactions swiftly, eliminating the delays and processing uncertainty associated with traditional banking hours. This immediate access to funds offers unprecedented financial flexibility. A service that is available 24 hours a day, 7 days a week. Transparency & Control: Because transactions are usually completed in instantly with very little time between a payment being sent and delivered, both the payor and payee have greater insight to the status of payments compared to methods where it might take a full day, or even multiple days, for funds to be delivered. This has historically been a major issue with the correspondent banking model, with various legacy cross-border payment systems, and even with various domestic payment options, such as checks (cheques) in the USA. Streamlined Operations: The streamlined nature of instant payments simplifies financial operations for both businesses and individuals. Whether it’s receiving salaries, making bill payments, or managing day-to-day transactions, the efficiency of instant payments improves the overall financial management for companies or consumers that leverage them. Cash Flow Management: For enterprise organisations, managing cash flows is crucial. Services like FedNow in the USA, Faster Payments in the UK, and SEPA Instant Credit Transfers (SCT Inst) in Europe all empower large corporations with the ability to transfer funds instantly between accounts. This not only enhances cash flow management but also contributes to overall financial resilience and strategic planning. Use Cases Accelerating the Adoption of Instant Payments In the dynamic landscape of instant payments, various use cases are reshaping how businesses and individuals engage and interact in financial transactions. The swiftness and accessibility of instant payments are paving the way for various applications, enhancing efficiency and responsiveness across different domains. Here are some concrete examples: Business-to-Person (B2P) Use Cases: Business-to-Business (B2B) Use Cases: In general, we can conclude that the adoption of instant payments is revolutionizing financial interactions, offering 24/7 unprecedented speed and efficiency, across diverse scenarios. Whether settling urgent compensation, streamlining business transactions, or facilitating seamless online purchases, instant payments are at the forefront of transforming the way we transact in the modern world. A Global Perspective: Instant Payment Schemes Worldwide As the benefits of instant payments and strategies regarding how best to implement them gain momentum, many countries have embraced real-time transaction systems, contributing to the global shift towards faster, more efficient financial transactions. Beyond the SEPA Instant Credit Transfer (SCT Inst) scheme in Europe, notable instant payment schemes have emerged worldwide. Here are just a few examples successfully incorporated by TIS: FedNow Service in the United States: While the United States entered the instant payments arena later with the introduction of the FedNow Service in July 2023, it represents a significant leap forward. The service, developed by the Federal Reserve, empowers financial institutions across the U.S. to provide real-time payment services, aligning with the global move towards instant transactions. Faster Payments in the UK: The United Kingdom has been a trailblazer with its Faster Payments system, revolutionizing the way individuals and businesses transfer money. Introduced in 2008, Faster Payments enables near-instantaneous fund transfers, providing a model for other nations exploring real-time payment solutions. SEPA Instant Credit Transfer Scheme in Europe: The SEPA Instant Credit Transfer scheme, operational since November 2017, has significantly influenced the European payments landscape. Covering 23 countries initially, with plans for expansion towards all 36 members, “SCT Inst” allows instantaneous cross-border transactions within the Eurozone, setting a precedent for regional collaboration. Faster Payment System (FPS) in Hong Kong: Hong Kong’s Faster Payment System (FPS) is another noteworthy initiative, introduced in 2018. FPS facilitates swift, round-the-clock fund transfers, enhancing financial accessibility and promoting a cashless society. The system has garnered widespread adoption, reflecting the global trend towards real-time payments. FAST Payments in Singapore: Singapore’s FAST (Fast and Secure Transfers) payment system has positioned the country at the forefront of the global instant payments movement. Launched in 2014, FAST enables individuals and businesses to transfer funds seamlessly, reinforcing Singapore’s reputation as a financial hub with cutting-edge payment solutions. PromptPay Thailand: PromptPay was launched in 2016 as a payment system enables customers in Thailand to send or receive Thai Baht funds via digital channels in real time. New Payments Platform (NPP) Australia: The NPP (New Payment Platform) is a new platform launched in 2018 that gives Australian consumers and institutions a new way to make everyday payments. Today, the NPP allows Australians to make low-value payments 24 hours a day in less than 30 seconds. The system operates seven days a week, 365 days a year, with no holiday breaks. The below graphic also offers more insight to various instant and real-time payment schemes in development globally. NOTE: This is not a complete list. Many other instant payment schemes are in development or have been recently…
ChatGPT for Treasury: The Good, the Bad, and the Scary
This article is written by Kyriba ChatGPT, the experimental chatbot dominating the headlines, has some interesting—and, in some cases, dangerous—implications for Treasury management. This blog discusses the good, the bad, and the scary about ChatGPT for Treasury. What is ChatGPT? ChatGPT is a generative artificial intelligence (AI) natural language processing tool created by the San Francisco-based research lab OpenAI. In January 2023—just two months after its launch—the chatbot reached 100 million monthly active users. OpenAI and ChatGPT gained further notoriety by recently partnering with Microsoft for a multi-year alliance valued at $10 billion. At its heart, ChatGPT is very simple. It writes natural language (e.g., paragraphs and articles) using data it was trained on, including various books, articles, and websites. ChatGPT is capable of crafting rather impressive, conversational prose. It can cover everything from blog posts to essays to poetry. These often appear as if they were written by a real person. It’s so efficient that it recently passed a Wharton MBA exam. Google has also taken notice. Even though ChatGPT is not a search engine, it is already being viewed as competition for the online search giant. Google’s management has developed a chatbot of its own. Though in a recent demo, it made a mistake that has already cost the company $100 billion in market value. Are you an experienced treasurer or someone looking to enhance their knowledge of financial management? We extend a warm welcome to TreasuryMastermind.com. Join our vibrant community and become a valued member of a network that prioritizes collaboration, expertise, and the pursuit of excellence in corporate treasury. Let’s initiate discussions and together elevate the art and science of treasury management! From a Treasury perspective, here are some interesting applications that Kyriba is monitoring to understand more about ChatGPT for Treasury Management: 1. Payments Fraud Prevention It’s been well documented that AI is being used regularly for both payments fraud and payments fraud prevention. Generative AI has now become the latest tools in fraudsters’ arsenals. Cybersecurity firm Darktrace shared with Fortune’s Eye on AI. Cybercriminals are using natural language AI algorithms to help increase the linguistic complexity of phishing emails. Interestingly, Darktrace reports that the overall volume of phishing schemes it has observed has decreased by 50%. Which in more complex schemes have increased by close to 20%. Unfortunately, this makes sense. Check Point, another cybersecurity firm, noted that using ChatGPT helped it create an end-to-end social engineering campaign. From phishing emails all the way to embedded malware within an email attachment. The result was disturbingly convincing. It is assured to break down the traditional barriers of defense that Treasury and finance leaders have erected to detect fraud. In response, cybersecurity experts all say the same thing: use automated systems to detect and prevent cyberattacks at machine speed. In Treasury terms, this means using AI within our payment processes. This is to ensure payments are compliant with all payment policies and employing AI-driven adversarial networks to detect suspicious payments. The good news is that these tools exist today and can be embedded within your payment software. As well as Treasury and ERP-to-bank connectivity. 2. Treasury Management Systems (TMS) ChatGPT can also be used within a Treasury Management System (TMS), where the user gives instructions to the system using keywords or questions. With a user experience (UX) that has been optimized for natural language processing, the TMS can respond to basic queries such as “Show me global bank balances converted to USD,” or “What is my exposure to the Yen?” to more complex requests, including “What caused the variance in my forecast last week?” or “How many days of liquidity do we have left?”. One example Kyriba is testing is for bank reconciliation, where ChatGPT and similar generative AI tools would identify forecasts based on actual variances and automatically reconcile those transactions that would typically have been manually processed in the cash management module of any TMS. For the daily user, ChatGPT or similar technology could replace mouse-clicking to reach a menu item or open a screen, as well as offer a next level of treasury automation such as robotic process automation (RPA), which is offered by some treasury teams today. For the executive user, the benefits could be even more interesting, as many CFOs and treasurers do not login to TMS or ERP platforms. Yet, they would be more than willing to ask questions of their treasury software. When it comes to ‘workflow’ systems like TMS, ERP and other multi-screen applications that treasury relies on, ChatGPT offers the next level of extreme automation. 3. ChatGPT for Treasury Documentation A challenge for many treasury teams is fully documenting treasury processes and procedures, especially when implementing a treasury transformation inclusive of a TMS. Documentation, how-to manuals, and even “when I’m on vacation” instructions take time and effort to compile. This is typically done manually and is a key reason why treasury system implementations can drag on for months. Formal treasury policies are also particularly challenging. For these policies to be effective, they need to be detailed yet broad enough that they don’t allow employees to find loopholes they can exploit. Regular updates may also be needed as key risks (FX, interest rate, fraud, etc.) continue to evolve. This generally requires a lot of manual work that treasury practitioners would rather avoid. Fortunately, ChatGPT and similar generative AI models can do all the writing for you. Given a minimum amount of information about your policies and the technology platforms that you are using to automate your treasury and payments, the AI model will write your treasury documentation for you. An additional treasury documentation example would be RFPs. “I love writing RFPs” is a phrase that no treasury professional has ever said. Fortunately, ChatGPT can write RFPs for you, from sharing company background and communicating requirements to suggesting questions that vendors can respond to. 4. Use ChatGPT for Treasury Education Services ChatGPT may also prove useful for treasury professionals seeking to expand their knowledge of the profession. Treasury is an ever-evolving field as technology and economic conditions change. And it can often be challenging for…
Balancing Innovation with Fundamentals for Lasting Value
In the always-changing world of finance and treasury management, the landscape is constantly changing with new technologies and trends. As a treasurer, you’re inundated with terminology and buzzwords. Yet you may find yourself unsure of how to effectively leverage these tools to drive value for your organization. If you’ve ever felt this way, rest assured, you’re not alone. Are you an experienced treasurer or someone looking to enhance their knowledge of financial management? We extend a warm welcome to TreasuryMastermind.com. Join our vibrant community and become a valued member of a network that prioritizes collaboration, expertise, and the pursuit of excellence in corporate treasury. Let’s initiate discussions and together elevate the art and science of treasury management! “Building a solid foundation is key” It’s essential to acknowledge that building a solid foundation is key before diving headfirst into the latest innovations. AI, automation, and other advancements hold tremendous potential. But they are most effective when built upon a bedrock of fundamental principles. Far too often, treasurers become fixated on adopting the latest technologies without first understanding their business thoroughly. This includes careful documentation operations, identifying inefficiencies, and implementing strategies for improvement. Creative destruction, the process of eliminating outdated practices to make room for innovation, is a powerful tool in this regard. Consider the many reports that consume valuable time and resources without clear utility—a prime target for streamlining efforts. I will always remember a great (and rather simple) piece of advice from a former boss. To whom I asked whether this and this report were really needed. “Stop doing it and see what happens. If nobody comes at you, it means nobody cares.” I followed his advice, which saved me two days of work every week for my team. Of course, I wouldn’t apply it without thinking if I were you. Ask around you before stopping a reporting activity. “Without a solid framework in place, even the most advanced tools may yield limited results” Prioritizing initiatives such as business continuity planning (BCP), staff education and training, and making clear roles and responsibilities within the Treasury function are essential precursors to technological integration. Without a solid framework in place, even the most advanced tools may yield limited results. Once these basic elements are in place, treasurers can begin to optimize their existing processes using a combination of technology and strategic planning. Implementing workflow tools to manage end-user requests, developing key performance indicators (KPIs), and establishing your own BIC for better banking relationships are all steps in the right direction. “Treasurers can unlock significant efficiencies and cost savings” A treasury management system (TMS) serves as the linchpin for many of these optimization efforts, providing greater visibility into cash positions, improving payment management, and facilitating intercompany transactions. Also, by centralizing cash management and leveraging in-house banking capabilities, treasurers can unlock significant efficiencies and cost savings. In the realm of foreign exchange (FX) management, transitioning from direct bank trading to an FX platform offers enhanced pricing, transparency, and security. These platforms seamlessly integrate with TMS systems, further streamlining FX transactions through automation and advanced reporting capabilities. “Treasurers can unlock valuable insights” As treasurers continue to modernize their operations, artificial intelligence (AI) and application programming interfaces (APIs) emerge as powerful tools for enhancing cash forecasting and integration with internal systems. Leveraging machine learning algorithms, treasurers can unlock valuable insights into cash flow patterns and optimize liquidity management strategies. API integration extends the capabilities of TMS systems, enabling seamless communication with other critical systems such as data hubs and ERP platforms. By aligning treasury functions with broader data strategies and automating accounting entries, treasurers can drive operational efficiency and ensure compliance with financial reporting standards. In essence, the journey toward financial transformation requires a strategic approach that balances innovation with basic principles. By prioritizing operational excellence, leveraging technology strategically, and embracing continuous improvement, treasury professionals can navigate the evolving landscape with confidence and drive lasting value for their organizations. To conclude, walk before you can run! Also Read