How Legal Entity Management Can Transform KYC Regulation Compliance and Optimize Client Onboarding
This article is written by Treasury4 Ed Barrie In my decades of experience in treasury professional, handling KYC regulations and smoothing the client onboarding process were some of the greatest challenges I encountered—in large part due to the siloed and disparate nature of legal entity data. Gathering relevant entity information is vital to both processes, but with the data spread between various individuals and teams across departments, it becomes far more arduous and time-consuming than it should be. The Complexities of KYC Regulations Several years ago, when I worked at a large public company, I was responsible for foreign bank account reporting (FBAR) and had to manage the issuance and renewals of legal entity identifiers (LEIs). I inadvertently let the LEI lapse for a legal entity, which delayed a tax refund from a foreign government of over $1 million. I did not thoroughly manage the company’s data and maintain the Know Your Customer (KYC) requirements of having an active LEI to complete a cross-border payment, which cost the company significant time and delayed the receipt of money. KYC regulations are ever-changing. Many of them were created to prevent money laundering and terrorist financing after the events of 9/11. Some requirements predate this as well, dating from the global financial crisis, where regulators needed look-through capabilities on the underlying exposures that financial institutions had with counterparties. Since then, regulations and complexity have only increased, leading corporates and financial institutions into perpetual, costly, and painful KYC compliance. The industry has made attempts to centralize and standardize KYC, but with limited success because it is hard to have a single global standard and develop a centralized data repository when there is no single universal standard of what’s required. There is no single standard around KYC data requirements because of the following: There is significant risk with noncompliance for corporates and financial institutions, including: How to Optimize KYC Regulation Management with Technology Corporations need to invest in people, processes, and technology to manage the underlying genome, including legal documents. They need to be able to collaboratively share data with banking partners efficiently, and they need a way to provide active notifications when that data changes. Banks in turn need to be able to consume that in a systematic way and share their own updates back with the corporate in a medium other than email. Email is far too manual, unsecure, and untimely to effectively manage such complex compliance processes. Corporations need to invest in people, processes, and technology to manage the underlying genome of legal entity data. I see a future in which KYC requirements are managed with a centralized golden copy of all the most current data in a system with a full audit trail, historical tracking, and an active alerting system that sends notifications to all relevant parties so they in turn can update their systems and action those changes accordingly. The system would also integrate the underlying dataset with relevant legal documents circulated for digital signature and stored long-term. This would ensure that these documents leverage data and workflow automation throughout the compliance process, rather than manually completed. For years, banks have asked a lot of questions of their customers. The tides are shifting, and customers are starting to ask a lot more questions of their banks. KYC requirements will continue to increase, but they are not the root cause of the friction and frustration between corporations and their banking partners. At the heart of this friction is the lack of managing data productively, in an active and collaborative process. Corporates and financial institutions could communicate and share data, including active updates and changes, in a straight-through process, by managing their legal entity data effectively. How Entity-Related Data Silos Slow Client Onboarding Few corporations are happy with the client onboarding experience because of the friction and repeated requests for data and documents. Financial institutions — such as banks, insurance companies, merchant processors, and asset managers—are held accountable by regulators and subject to fines or other penalties if their information is incorrect, even though they’re often the last ones to be notified when entity data changes, resulting in risk-averse institutions that are challenging to work with. Businesses also don’t usually have a singular owner for entity-related data. This data is often owned, managed, and dispersed across multiple teams and individuals. The treasury department is responsible for collecting relevant data and communicating it with their banking and financial services partners. When underlying source data changes, it is often not communicated in a timely manner to internal stakeholders, and these updates reach external partners like banks and financial institutions even later, creating financial risk for both the businesses and the banks. Gathering and sharing up-to-date entity challenges is an arduous process. Entity data includes underlying legal documents such as articles of incorporation, bylaws, banking resolutions, and tax certificates, for which banks need to validate the entity, what the entity is authorized to do, and who on the entity’s behalf is empowered to bind it to certain transactions or services. Consider the different places data exists external to your organization and your banking partnerships: 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. Notice: JavaScript is required for this content.
Franklin
Lessons from 10 Years of Failing to Sell My Dad Treasury Software
Is the title a bit click-baity? Yes, it certainly is. But then again, so are most of the 20+ sales solicitations that my dad – a seasoned Treasury practitioner with nearly 30 years of experience – receives every day from various software vendors, banks, and consultancies. If you’re an active treasury practitioner, I’m guessing you receive these solicitations too. In fact, you’ll probably receive one or two more by the time you’ve finished reading this article. I will personally apologize for some of the clutter, as I’m likely responsible for at least a few of those messages. I’ve helped send hundreds—if not thousands—of them over the past decade. Since 2015, I’ve attempted to follow in my father’s footsteps by pursuing a career in treasury. Not as a practitioner, but as a sales and marketing liaison for various treasury consultancies and fintech vendors. Ultimately, this means I create content and pitch products that I’m hoping would help convince my dad (and others like him) to invest in a new TMS, banking platform, or financial service. Because my dad is my target customer, I take every opportunity to collect his feedback on my projects. Over the years, I’ve pitched him on dozens of sales decks and demos, asked for reviews of countless factsheets and whitepapers, and sought his insight on almost every new piece of content I develop. Of course, due to inconvenient issues like “nepotism” and “conflicts of interest” (joking of course…), it’s not easy for my dad to justify the purchase of whatever shiny treasury solution his son spends all day trying to sell. I understand this and respect it. But because I’ve also had a front-row seat to analyze how each new vendor and bank advertises and sells to him—and what his response to each approach is—I’ve acquired a unique perspective on the process. As we enter 2025, the following insights are those that I’ve found most relevant and impactful as I prepare for my 11th year of service in the treasury sales, marketing, and content arena. To make matters worse, the security filters on most modern email platforms will send a large portion of your messages straight to spam. And cold calls? You’re lucky if the receptionist answers, and even more so if they actually transfer you to the desired extension. So, while sending emails and messages is fine, just know there’s a decent chance they might not ever be read or responded to. This shouldn’t be interpreted as a sign to just stop all sales and marketing communications entirely (although many practitioners might prefer that…). However, it should resonate that just because you have someone’s contact information or have constructed the “perfect” email does not mean it will be acknowledged, read, or responded too. Preparing yourself for this reality—and learning how to diversify your outreach as a result—is very important. Wrong. In all likelihood, that first demo call may be the only call (if it ever happens to begin with). Or, it’s the first of what will become 50+ calls over the course of not just days and weeks, but likely months and years. I’ve seen some sales cycles last as long as 3-5 years for large, blue-chip companies—especially when it involves a largescale migration of critical infrastructure, payment channels, and bank connections. There will likely be dozens—if not hundreds—of stakeholders involved across numerous departments. And due to the large number of participants and sheer scale of processes that are impacted, no experienced treasury team will ever rush a purchase. In most (but not all) cases, treasury software sales take time. Which leads us to point #3. If you’re wondering how many touch points are required to engage a corporate treasury team and maintain their interest during a multi-year sales cycle, the answer is usually hundreds, if not thousands. I don’t just mean emails and calls, but demos, workshops, dinners, events, etc. Vendors today will try to stay top of mind through any way possible, but the ones that succeed are usually ensuring that each stakeholder has all the information necessary to identify value. This usually means providing tailored material not just to Treasury but also to Accounting, IT, AP, and perhaps the CFO or CEO directly. Some might take it a step further and customize their outreach for each rung of the treasury ladder (manager, analyst, etc.), depending on the use case. Unfortunately, this multifaceted approach to sales is not easy for all reps to stay on top of, especially when it is extrapolated out across dozens or even hundreds of companies. Of course, there’s Salesforce and other tools to help with that problem, but just like in treasury, it’s never really that simple. The hard truth is that many treasury sales teams try to fill their pipeline with as many prospects as possible but ultimately fail to properly establish and maintain a good relationship with each one. Today more than ever, that’s an easy way to lose the opportunity. Whenever I attend the annual AFP or EuroFinance conferences, I like to walk the floor with my dad and listen to how various booths and vendors approach him. While many do a fantastic job, a fair number also struggle to demonstrate true product or market expertise, and those conversations rarely last long. Even for those who’ve memorized the pitch for their own product, a few follow-up questions from a seasoned practitioner can easily determine who understands the market and who has simply rehearsed a script. The same goes for those who use AI to generate highly authentic emails and digital messages but then struggle with in-person communication and dialogue. These are both major red flags, and in the end, it’s almost impossible to convince a treasurer that your product is a good fit for them if you clearly don’t understand the market or industry. As a final point here, it’s worth noting that out of the 20+ treasury sales reps emailing a random treasurer on any given day, at least SOME of them will be…
isaac.zaubi
Account takeover protection strategies for your business
This article is written by Trustpair What is account takeover and how does it work? Account takeover definition Account Takeover (ATO) is when a cybercriminal manages to take control of a user’s account. ATO happens when scammers get unauthorized access to the user’s login credentials by using: The goal? Impersonating the original user and taking action in their name. Once scammers have gotten access to the account, they use it to: This can happen to different kinds of accounts, even with the best security: Account takeover is also called account compromise. It’s a form of identity theft that damages both individuals and businesses. We’ll see below examples of security measures to set up to protect your business from ATO. How does ATO work? Before we dive into account takeover protection, we need to understand how an account takeover attack works. Account takeover ATO can happen through: These are just examples—ATO can happen through a number of account takeover techniques. It’s not only damaging to individuals: your company will suffer too. Why is it important to protect your business from ATO? According to Juniper Research, account takeover fraud (ATO) cost US businesses $25.6 billion in 2020. ATO attacks can lead to CEO fraud, vendor fraud, credit card fraud, invoice fraud… Any of these schemes where criminals use spoofing to impersonate someone else and get your employees to wire them money and/or confidential information. This sensitive data will then be used to: The worst thing is? It can be months before you realise it has happened. 96% of US companies have been targeted by at least one fraud attempt in 2023. If you want to save your cash (and reputation), you need adequate protection for account takeover. The best account takeover protection strategies Let’s have a look at some measures you can take to prevent account takeover and common examples of business fraud. Strong password policy The simplest measures are often the most efficient—and yet can be the hardest to enforce. But it’s key that your employees know how to set up a strong password. Often, account takeover happens because users use the same login information over multiple accounts. Ensuring it doesn’t happen in your organization grants you a first layer of protection. Encourage your employees to use a unique, strong password for each of their accounts. Multi-factor authentications Next: use multi-factor authentication (MFA) across your organization. We recommend a minimum of two-factor authentication to ensure the person sending a request is the right account owner. This means users have to log in using their username and password but also need to confirm their identity by inputting a code or using biometric data (like their face or a fingerprint). This way, all transactions will have to be authorized twice. It’s a common method of user verification that is due to be adopted more widely with the new PSD3 regulation. Ongoing cybersecurity training One of the most important, and yet often overlooked, cybersecurity measures every organization should deploy is employee education. Ongoing and regular training is important to ensure that everyone takes security seriously. By understanding the underlying risks, employees are more likely to follow and detect fraud risks in your company. They’ll recognize the signs of phishing attacks and compromised accounts, making them more responsive. This will lower your overall risk of fraud in business, from internal fraud to money laundering. Showing employees the importance of changing their passwords, maybe even using simulated attacks, is paramount to your overall protection. Training should be regular to stay top of mind and relevant with the latest fraud schemes—fraudsters take their own training very seriously and constantly upgrade their skills. Anti-fraud software Last but not least: using anti-fraud software. Even with the best account takeover protection measures, the risk of fraud still looms over every organization: Mark Zuckerberg’s own Facebook profile has been hacked several times. So, what’s the solution? Using fraud detection and prevention software. Using Trustpair means even successful account takeover attacks won’t lead to third-party fraud. Our software does automatic and ongoing account validation in real time. We check that: Three-way matching means that even if a cybercriminal manages to change your suppliers’ credentials manually (like in our previous example from the SF-based non-profit), the money won’t be sent. We use AI and predictive modeling to accurately conduct fraud detection. If we detect any bank accounts with suspicious activity, we block the transaction before it is sent. This means you are 100% protected against third-party fraud risks. Trustpair integrates with the main software (CRM, ERP, accounting software) to make your experience seamless and secure.We work with many large international companies, so we can check your vendors’ credentials across the world. We make international account validation easier, having access to otherwise hard-to-reach data. Key Takeaways: Account takeover protection should be taken seriously to avoid fraud in your business. Setting up a few measures (strong password, multi-factor authentication, employee training) can protect you against those risks. But the ultimate protection comes from using Trustpair, which effectively blocks any unauthorized transaction even in case of account takeover. Read More from Trustpair 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. Notice: JavaScript is required for this content.
Should You Diversify Corporate FX Liquidity Providers?
This article is a contribution from our content partner, Just Foreign Exchange (FX) is the largest and most liquid financial market in the world. And navigating that market with as little risk as possible is easier said than done, particularly with repeat fluctuations giving way to challenges like: However, avoiding these setbacks requires solving a wider challenge your business is facing: relying on a single liquidity provider. Otherwise, you will be opening up your treasury team to obstacles including limited market depth, a lack of competitive pricing, and potential counterparty risk. Having a more diverse set of liquidity providers isn’t just about limiting your exposure risk either—a wider range of choices boosts your chances of achieving lower cost of trading and transparent margins in the long run. At Just, we’ve established a reputation for bridging the visibility gap in interbank market data for corporations. This enables more informed bank negotiations and access to more transparent rates. We’ve identified a parallel gap in how these businesses understand their liquidity options, and are poised to offer solutions to address this need. Here, we will cover why diversifying your corporate FX liquidity providers should be front of mind in the new year—and leading best practices you should be following to see that through. Exploring the benefits of diversifying liquidity providers Ranging from large banks and financial institutions to specialised non-bank financial entities, all corporate FX liquidity providers have the primary purpose of facilitating currency trading for businesses like yours, offering competitive buy and sell prices for currencies — essentially acting as market makers. But while you may feel that your current provider is fulfilling the above purpose, exploring other available options can uncover multiple, further advantages, particularly if you’re handling a variety of trades. Let’s explore these benefits in more detail: Best practices for diversifying your liquidity providers With the pros of diversifying your portfolio of providers covered, the only remaining question is: how? The short answer is to invest in a marketplace tool that can give you a complete look at the scope of providers available. With the right technology supporting your business, you can begin your diversification strategies by: 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. Notice: JavaScript is required for this content.
Treasury Contrarian View: Banks vs. Fintechs – Should Treasurers Bet on Smaller Players?
In the corporate treasury world, large global banks have long been considered the go-to partners. They bring a reputation for stability, deep balance sheets, and an established track record. But in recent years, fintechs have emerged as serious challengers, offering nimble, innovative solutions that many traditional banks simply can’t match. So, here’s the question: Are treasurers limiting themselves by sticking to the perceived safety of big banks, or is it time to rethink the role fintechs could play in your treasury strategy? Beyond Safety: What Really Matters? Yes, safety and stability are key priorities, but they shouldn’t be the only factors in the decision-making process. Treasury teams also need functionality, speed, and solutions that solve real-world challenges. Here are some areas where fintechs might outshine their larger counterparts: The Case for Big Banks Of course, big banks bring undeniable strengths to the table: What’s the Right Balance? Treasurers don’t need to choose either banks or fintechs. In fact, the best approach may lie in diversifying partnerships to get the best of both worlds. For example: Your Turn Let’s open the discussion! To spark the conversation, we’ll include comments from our board members and insights from treasury vendors and fintechs already disrupting the space. Watch this space for their thoughts—and add your own below! Dan Kindler, CTO and Co-Founder at Bound, comments: I don’t see this as an either-or situation. Especially not for larger corporates. Many already use fintechs alongside their banking relationships – and I don’t see this trend slowing down. The banks handle the corporates’ core cash and liquidity needs while fintechs offer specialised tools, like automated FX hedging, that help them manage their day-to-day treasury operations more efficiently. Think of it this way: banks are like the solid foundation of a house – essential, reliable, built to last. We’re more like the smart home system, adding layers of automation, control, and visibility that make everything work better together. Eleanor Hill, Freelance Content Creator at Treasury Storyteller, comments: The tide is changing. I see many more treasurers working directly with fintechs these days. By ‘directly’ I mean not through a bank collaboration with a fintech (partnership being the ‘safer’ route). Of course, the appetite for direct fintech relationships varies according to the size and maturity of the corporate, but it also differs quite significantly by geography. In India, for example, there is huge appetite among the treasury community for fintech solutions. To the point that many treasurers say they would be happy to spend as much on fintech solutions as a TMS (audience poll conducted by me at Treasury Khazana 2024 Conference). That fintech versus traditional tech space is perhaps where the most interesting battles are still to unfold. Lorena Pérez Sandroni, Head of Treasury at PayU GPO, comments: Fintechs are considered a viable alternative to big banks in treasury operations because of their innovative solutions and agile development processes, which allow them to quickly adapt to market and business needs. Specific partnerships with fintechs cannot be disclosed for obvious reasons. However, the biggest opportunity for fintechs is seen through collaboration rather than disrupting traditional banking, as the main challenges for fintechs are linked to regulatory compliance. Recommended Reading Join our Treasury Community Treasury Mastermind 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.
Cash Efficiency—How to Get the Most Out of Your Cash
This article is written by Palm A common issue we hear at Palm is that businesses are aware of their idle cash but lack the time and resources to manage it effectively. This can range from the minor inconvenience of maintaining a small balance in an unused overseas account to a larger problem of having unutilised funds scattered globally. Treasurers have always strived to have their cash in centralised accounts, whether using cash pools or virtual account structures. However, in more recent years, with the rise of interest rates, this topic has been given much airtime in board meetings and leadership conversations, as idle cash represents forgone interest income. This blog explores the concept of idle cash, its origins, and how we are on a mission to give treasurers the tools they need to forecast and manage their cash proactively and prevent idle cash balances from occurring in the first place! What is Idle Cash? Idle cash refers to money held by a company that isn’t being actively used for business operations, investments, or other productive purposes. While maintaining some level of cash reserves is prudent for liquidity and unforeseen circumstances, excessive idle cash can represent a missed opportunity and become a drain on company resources. Causes of Idle Cash Several factors can lead to the accumulation of idle cash: The Risks of Idle Cash While having cash on hand might seem like a good thing, excessive idle cash can pose several risks to your business: Deep Dive into Trapped Cash Trapped cash specifically can be a headache for treasurers, the time spent completing paperwork to ‘release’ the cash. Trapped cash refers to cash and liquid investments held by foreign subsidiaries that cannot be easily repatriated to the parent company due to tax implications, regulatory restrictions, or other factors. Countries Where Cash is Often Trapped While the specifics can vary based on a company’s global footprint and the nature of its operations, some countries are notorious for making it difficult to move cash out: Risks of Trapped Cash Having large amounts of trapped cash can pose several risks: Strategies for Managing Idle and Trapped Cash Given these risks, what can you do to manage idle cash more effectively? 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. Notice: JavaScript is required for this content.