Payment Hub Implementation Checklist
This article is written by Nomentia In today’s digitalized financial landscape, optimizing payment operations is essential for businesses to stay competitive. Here is a comprehensive checklist for finance professionals looking to implement a payment hub. Payment Hub Implementation Start by assessing your payment operations, technology, and challenges. – Manual data entry leading to errors.’ – Fragmented payment processes across multiple systems. – Lack of visibility and control over payments. – High operational costs associated with payment processing. – Difficulty in compliance with regulatory requirements. – Inefficient routing of payments. – Define the scope of the payment hub project by outlining the specific areas of payment processing it will address, like accounts payable, payroll, or customer payments. – Identify the objectives of the payment hub project, including goals such as improving efficiency, reducing costs, enhancing security, and increasing visibility into payment processes. – Consider and map out what systems like ERPs and banks you need to connect to reach your goals. – Establish measurable metrics to track the success of the payment factory project, like reduced processing time, decreased error rates, or cost savings. – Align the scope and objectives of the payment factory project with the broader strategic goals of the organization and ensure that it supports and contributes to overall business objectives. Understanding digital transformation of payment operations Understanding the benefits of digital transformation for payment operations ensure buy-in from internal stakeholders. Here are some things to consider when making a business case for your future payment hub: Choosing the right payment hub In selecting the right payment hub, organizations face crucial decisions that can significantly impact efficiency, compliance, and strategic alignment. From technological capabilities to scalability and regulatory compliance the choice of a payment hub should be tailored to meet the diverse needs of modern businesses. – Evaluate how well the payment hub integrates with your current systems, such as ERP, CRM, or accounting software. – Consider whether the payment hub offers APIs, connectors, or plugins for seamless integration. – Assess compatibility with various technologies used in your organization. – Assess whether the payment hub can accommodate growing transaction volumes as your business expands. – Evaluate scalability options, such as cloud-based solutions or scalable infrastructure. – Ensure the payment hub supports additional features and functionalities without significant disruptions. – Check if the payment hub adheres to industry standards for secure payment processing. – Evaluate encryption methods used to protect sensitive payment data. – Assess security measures for fraud detection and prevention. – Determine if the payment hub can be customized to fit your unique business requirements. – Evaluate the flexibility to configure workflows, rules, payment methods and payment file formats. – Assess the user interface for ease of navigation. – Determine if the payment hub provides dashboards or reports for monitoring payment activities. – Evaluate user management features for controlling access and permissions. – Compare pricing plans and licensing options offered by different payment hub providers. – Consider implementation costs, including setup fees and training expenses. – Evaluate the potential return on investment based on efficiency gains, cost savings, and improved processes. Stages of payment hub implementation Implementing a payment hub is a pivotal undertaking requiring meticulous. The essential steps and considerations from initial assessment to deployment strategies ensure a smooth and successful integration of a payment hub within organizational frameworks. Continuous improvement in payment operations Soliciting feedback from stakeholders on the performance of the payment hub: Master your payment hub implementation Implementing a payment hub is a crucial step for organizations aiming to streamline their payment processes, enhance efficiency, and ensure compliance with regulatory standards. By following this comprehensive checklist, organizations can navigate the complexities of payment hub implementation with confidence. More Posts from Nomentia 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.
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Top 5 Strategies to Control Costs in Cross-Border Finance Operations
This article is written by HedgeFlows Managing finances for a business involved in international trade introduces complexities and hidden costs that can affect profitability. To safeguard your financial outcomes, it’s crucial to identify and mitigate these expenses. Here are five key strategies to help finance teams optimize costs in cross-border operations. 1. Scrutinize Foreign Exchange (FX) Rates Challenge: International business dealings often involve currency conversion, a process fraught with hidden fees. Many financial service providers profit from the opaque nature of FX markets and clients’ lack of awareness about these FX charges. Example: A company with £10 million in foreign currency turnover faced hidden fees of £100,000 annually due to an average 1% conversion fee from their bank. Solution: 2. Adopt Local Payment Methods Challenge: International B2B payments often rely on SWIFT transfers, which can be costly. For example, a business transferring £10,000 via SWIFT with their bank can incur payment fees that add 0.25% to 1% of the transfer amount, which can quickly add up for a medium-sized business. Example: A logistics company saved 90% on payment fees by switching from SWIFT to local payment methods like ACH and SEPA. Solution: Utilize “local” payment schemes such as SEPA in Europe and ACH in the US to reduce costs and streamline transactions without compromising speed or accuracy. 3. Streamline Accounts Payable (AP) and Receivable (AR) Processes Challenge: Managing multiple currencies can result in resource-intensive, error-prone processes. Example: A travel business faced inefficiencies due to manual reconciliation across various banks, leading to costly errors and delays. Solution: Implement robust technology systems that integrate with your ERP to automate and simplify AP and AR processes, reducing manual effort by up to 80%. 4. Optimize Cash Management Challenge: Idle cash balances in foreign currencies can lead to FX risks and missed opportunities for earning interest. Example: An e-commerce firm missed out on potential interest income by leaving cash in multiple currency accounts to avoid high payout fees. Solution: Open a “hub account” to consolidate and manage cash flow flexibly across multiple currencies, optimizing interest earnings and reducing borrowing needs. 5. Proactively Manage Cash Flows and Currency Risks Challenge: Surprise currency fluctuations can erode profits through FX conversion costs and payment fees. Example: A UK wholesaler faced increased import costs due to abrupt currency depreciation during the government crisis in September – October 2022. Solution: Use FX hedging techniques to stabilize cash flow and manage risks effectively. Leverage technology platforms that integrate with your financial systems to automate and simplify risk management. By implementing these strategies, businesses can effectively manage international trade costs, leading to smarter financial management and enhanced profitability. Adopting these measures will not only save money but also streamline operations and mitigate financial risks associated with cross-border trade. 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.
What is Supply Chain Finance?
This article is a contribution from our content partner, PrimeTrade Supply chain finance allows businesses to get their suppliers paid quickly without affecting their own accounting or cash flow. Sometimes it is called SCF, supplier finance, reverse factoring, or dynamic discounting. These different labels all describe a similar process: In dynamic discounting, the financier is the buyer itself. All of the discount agreed to by the supplier for early payment is earned by the buyer using its own cash. In this situation, the invoice is simply paid early, and the buyer generates additional income. A win-win SCF is a win-win for buyer, supplier, and financier: Supply chain finance enables cash to move more efficiently through the supply chain: Basic supply chain finance Basic supply chain finance is the simplest and most common form of SCF today. A software platform is used to coordinate the three parties involved (buyer, supplier, and financier). 3 things to know about basic SCF Is SCF/reverse factoring a good thing? Yes. Supplier finance, or SCF, provides all the included suppliers with the same access to liquidity regardless of location and size. There is a reported $2.5 trillion per annum funding gap for smaller suppliers in emerging markets that supply chain finance can address. But basic SCF needs an upgrade to work better. That’s because early payments are not very early, and SCF programs can be painful to run in practice. 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.
APIs vs. Open Banking: What’s the Difference?
This article is written by Palm APIs and OpenBanking are two commonly used terms in today’s treasury world; however, a stark number of professionals do not fully understand what they are and how they can harness their firepower effectively. This blog post aims to clarify what these tools are, how they function, and the potential benefits and challenges they bring to the table. Understanding APIs and Open Banking What is an API? An Application Programming Interface, or API, is a set of rules and protocols that allow different software applications to communicate with each other. APIs act as intermediaries, enabling programs to “talk” to one another without exposing the underlying code. In the treasury world , APIs facilitate access to bank services, data retrieval, and integration with third-party applications. Systems like Palm which integrate with your banks, ERP and other TMS, utilise APIs to create quick and secure connections to surface your data in one dynamic dashboard. What is Open Banking? Open Banking, on the other hand, enables companies to access financial data with the consent of the customer. Common examples of its usage are during in-app purchases if you are directed to your own banking app to create a payment, or if you apply for a loan and chose to share your financial history with the lender. In short, Open Banking is a regulatory framework that mandates banks to open up their customer data to third-party providers, with customer consent. The goal is to foster innovation and competition in financial services, leading to enhanced products and services for consumers. Open Banking relies heavily on APIs to securely share financial data, allowing third-party developers to create new financial applications and services. The Intersection of APIs and Open Banking While APIs are the technological foundation that makes data sharing possible, Open Banking is the policy-driven approach that governs how this sharing occurs. Together, they create an ecosystem where financial data flows more freely, enabling better customer service and increased transparency. How Data is Shared via APIs and Open Banking Data Sharing through APIs APIs facilitate data sharing by creating a secure connection between different systems. When a user grants permission, an API call is made to retrieve specific information from a server. This process ensures that data is shared efficiently and securely, without compromising the integrity of the original systems. Open Banking’s Role in Data Accessibility Open Banking leverages APIs to provide a standardised way to access financial data. It ensures that this data exchange is secure, transparent, and under your control. Security and Transparency There is no need to worry about confidentiality and security risk, both APIs and Open Banking prioritise security and transparency. APIs use encryption and authentication to protect data during transmission, while Open Banking regulations require strict compliance with data protection standards. User Experience with APIs vs Open Banking APIs and User Experience APIs enhance user experience by enabling seamless integration between different services and platforms. Using Palm, bank statements and transactions are updated automatically and seamlessly. This allows you to perform complex cash management tasks with just a few clicks. APIs simplify processes, making them more intuitive and user-friendly by embedding functionality of other services in one easy to use system. Open Banking’s Impact on Consumers Open Banking transforms the user experience by providing you more control over financial data. It allows users to compare products, manage finances, and access tailored services, all from a single interface. This transparency and accessibility empower consumers to make informed financial decisions. How Palm Uses APIs to Connect to Bank Accounts Palm’s Strategic Use of APIs Palm leverages APIs to provide seamless connectivity between bank accounts and its treasury management system. This integration enables real-time data access, enhancing decision-making and operational efficiency for large corporations. Enhancing Financial Management By using APIs, Palm offers comprehensive financial insights and analytics. This capability allows businesses to monitor cash flow, manage transactions, and optimise financial strategies, all through a single interface. Continuous Improvement Palm continually refines its API capabilities to meet the evolving needs of treasurers. By staying at the forefront of API technology, Palm ensures that its platform remains robust, secure, and user-friendly, providing unmatched value to its users. Conclusion APIs and Open Banking are reshaping the treasury data world. To explore how you can utilise this technology to streamline your treasury, book a demo with today. 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.
How Freightos moves faster on decisions with real-time cash data and insights
This article is written by Nilus About Freightos The $500 billion global freight market that transports nearly everything we eat, wear, and use around the world remains almost completely offline. Which means that our everyday products cost more than they should. Freightos® (NASDAQ: CRGO) makes international shipments faster, more cost-effective, and reliable, expanding global trade between the people of the world with the largest global digital freight booking platform. Using a combination of breakthrough technology, data, and a platform that spans multiple global logistics providers, importers, airlines, ocean liners, and leading tech players, Freightos Group companies—Freightos.com, WebCargo, and Freightos Data—are making global trade smoother. The challenges 1. Cash management had limited cash visibility and optimization. With five business entities and 15 banks across the globe, Freightos was scaling fast but needed help understanding its cash status across the organization. Creating weekly, monthly, and quarterly reports required a massive team effort. The manual efforts of pulling, parsing, and splitting data from dozens of accounts and payment providers across many Excel spreadsheets took time to produce. As a result, they could not create these reports more frequently, limiting their cash optimization capabilities. 2. Manual preparation of financial reports delayed decision-making. After the cash consolidation process, the Freightos finance team would analyze their cash inflows and outflows and compare their cash to their budget. They usually completed their cash flow analysis and could view their finalized data toward mid-month after closing their books. “This delayed our ability to make key decisions that would impact our cash flow,” said Freightos CFO Ran Shalev. They needed to close this gap to keep up with business decisions and visibility. 3. Siloed work for different business entities delayed daily work. Consolidating all cash data on the corporate level and then distributing the data to each stakeholder was a challenge without a single platform with one source of cash data. With the Freightos finance team distributed by entity and geographical location, a bank holiday in one location could delay one step in the information chain. A local finance manager might have to wait for others to pull their bank information before continuing their daily work. The solution As a global company with extensive coverage of banks and payment processors, Freightos highly values cash flow visibility and management. Partnering with Nilus gives the finance team better tools to deliver this value. Ran Shalev, CFO of Freightos, emphasizes the value of seeing up-to-date cash data in one place, “We can move faster and take key cash management decisions today instead of waiting for hours of manual work from my team. We’re also one step ahead towards closing the books.” The Nilus integrations connect Freightos to dozens of bank accounts and payment providers, saving dozens of hours per month. Unlike traditional software that can take months to implement, Nilus users can start connecting their banks directly on the platform. Shalev highlights, “Suddenly, you have a super easy UI to view cash balances in one place.” Automated alerts update the finance team on cash flow and liquidity. Cash visibility and anomaly detection enable the team to see real-time trends and enhance their financial planning capabilities. The finance team manages multiple entities within the Freightos Group. With Nilus, they can automate their cash management across all their entities, enabling the finance team to see the bigger picture. Yaniv Kalo, Sr. Director of Product at Freightos, describes the solution, “Nilus continuously maps historical inflows and outflows, uses AI to learn the patterns, and recommends required cash movements for employees to take forward.” Kalo continues, “Together with Nilus, we’re automating significant parts of our Treasury management. We can now access one UI with near real-time data and a recommendation engine, leading to more frequent, accurate, data-driven decision-making by the Treasury team and country finance managers.” The tighter control over Treasury operations puts the Freightos Treasury team in the driver’s seat as they scale. “But visibility is the mean and not the end goal,” notes Kalo. He explains, “As a global B2B marketplace, having the right amount, in the right currency, in the right account, at the right time is crucial when you scale, and it is not an easy task. Nilus makes it much easier for our team to collaborate and ensure all accounts are accurately funded and balanced. It saves us time and money on FX, internal yet international bank transfers, late payment fees, and interest-based deposits while maintaining a high standard of full, accurate, and on-time payments to our Sellers.” With Nilus at work, the Freightos team can better support the business as it grows in complexity with real-time data in hand. Working with Nilus benefits Freightos by providing the following: What’s next for Freightos As Freightos continues to scale, it aims to automate more and more of its financial operations. Next, they plan to reduce DSO (Days Sales Outstanding) by leveraging additional Nilus automation to apply payments to multiple invoices in their B2B workflow, including implementing a direct integration between Nilus and Netsuite. Stay tuned as we partner in Freightos’ journey of better managing, automating, reconciling, and forecasting their financials. 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.
Where companies fall short with cash forecasting, and how to avoid those pitfalls
This article is written by Palm Cash forecasting often takes centre stage in board meetings, strategic business discussions, and auditor reports. Having a reliable cash flow forecast model can steer the course of a business. Conversely, a neglected model can sit in a folder, unused, leaving CFOs and treasurers feeling blind and unable to make key strategic decisions. Whether you opt for a decentralised model that collects inputs from subsidiaries or have the treasury team forecast for the entire business, the level of human intervention is key in determining the efficiency and accuracy of your forecasts. This blog explores common pitfalls in cash forecasting and offers solutions to enhance your forecasting accuracy with Palm’s predicative modelling capabilities and AI toolbox. Over-reliance on External Inputs Many companies depend heavily on inputs from subsidiaries or other entities. Unfortunately, contributors often lack consistency, motivation, or the capacity to prepare accurate forecasts, making this a considerable challenge. When various subsidiaries apply different forecasting methods, it leads to inconsistency. This inconsistency can distort the overall cash flow picture, making it hard to trust the forecast. Contributors may not fully understand the importance of their input or may not have the time to dedicate to accurate forecasting. This lack of engagement can result in half-hearted efforts that compromise the quality of the data. Without proper training, employees might not be equipped to provide reliable forecasts. This knowledge gap can lead to errors that cumulatively affect the entire cash flow model. The Challenge of Combining Data Combining data from various sources can be a painful and time-consuming process. Even with standardised formats, variations in how regions classify entries and inconsistencies month-on-month can occur. Time-consuming Data Combination Merging data from different sources requires significant time and effort. This process can delay the finalisation of forecasts, making them less useful for timely decision-making. Variations in Data Entry Despite using standardised formats, regions may still classify entries differently. These variations can create discrepancies that need to be reconciled, adding another layer of complexity. Inconsistencies Over Time Month-on-month inconsistencies can arise due to changes in classification or data entry mistakes. These inconsistencies can make it difficult to compare forecasts over time, reducing their reliability. The Difficulty of Assessing Submissions for Errors Assessing submissions for erroneous figures can be challenging without in-depth local knowledge. This difficulty can lead to overlooked errors that compromise the entire forecast. However, even small errors can snowball, without providing quality feedback to those preparing the entries. Currency Challenges in Forecasting Currency challenges often arise when forecasts are prepared in local currencies. While this approach provides detailed insights, converting these forecasts into the reporting currency can be complex. Converting local currency forecasts into the reporting currency can be challenging. Using spot rates or budget rates can distort the numbers. If using a hedge rate or a forward rate, this could increase the accuracy of the long-term forecast specifically. Enhancing Cash Forecasting with Palm Palm provides a solution that addresses these common pitfalls. By consuming and analysing historical data, Palm’s AI and predictive models can generate a reliable cash flow forecast you can start using in days. Automated Data Collection Palm automates data collection from your bank statements, and TMS via API connectivity, reducing the time and effort required for manual data collection. This automation ensures that your forecasts are based on the most up-to-date information. Then, utilising AI and predictive to identify patterns and trends that are not obvious to the human brain. This gives you confidence in your forecast and numbers, by verifying your assumptions and seeing them brought to life through the cash forecast. In Palm forecasts refresh daily with all the latest information available, ensuring that your numbers remain current and reliable. Adding Human Insights to AI Models While Palm’s AI models provide a solid foundation, your insight and knowledge give Palm valuable information to help refine the forecasts in the future. Palm employs machine learning technology to take your understanding, apply it to the forecast and enhance accuracy over time based on the adjustments you make. As you feed more data into the model, it learns about your business, this continuous learning, makes Palm’s models more accurate the more of your gut instinct you share in the platform. Reducing Time Spent Updating the Forecasting Palm reduces the time spent creating, collecting, and consolidating forecasts. This reduction allows you to focus on important tasks like variance analysis. Focus on Variance Analysis Palm’s variance analysis feature highlights notable areas, helping you focus on differences where you can have the largest impact on forecast accuracy. This focus ensures that you are making the most of your efforts. By completing regular variance reviews, you can continuously improve your forecasts and iron out those deviations. Improving Cash Management for Treasurers Having a cash forecast you can rely upon allows treasurers to run tighter cash management programmes and optimise interest income or reduce debt drawings to ensure that you can make the most of your available cash. Reduce buffers held in bank accounts, and use that idle cash to generate positive cash flow into the business. Taking the Next Step with Palm If you’re interested in learning more about Palm, book a demo with the team today and see how the model works using your data. This opportunity allows you to experience the benefits of Palm firsthand and understand how it can transform your cash forecasting process. 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.
Bank statement fraud: how to avoid it?
This article is written by Trustpair Last year, the FBI reported that US companies lost over $6.9 billion in cybercrimes. The bulk of those? Crimes by business email compromise, bank statement fraud, and wire transfer fraud. When hackers steal your hard-earned money and financial data, it compromises your entire business operation. Businesses stand to lose much more than cash—trade secrets and passwords can be accessed. Assets from all departments are at risk. In this piece, you’ll learn about bank statement fraud and how to protect your company from falling victim to it. What are some examples of bank statement fraud? Wire transfer frauds have been around since the internet began. But each year, businesses are susceptible to more creative hacking techniques that leave them vulnerable. The most common type of wire transfer fraud is a phishing scam. Phishing scams A phishing scam is also known as business email compromise. Scammers start by cloning your company emails or buying up similar domains for one of your suppliers. When they reach out, they are able to fool employees into believing that the email is real. They send a fake email requesting either money (via an invoice) or asking your employee to reveal sensitive information. Some examples of phishing emails include: Since the hackers use urgency techniques, employees can be fooled easily into wire transfer fraud without checking the details of the email. Moreover, sometimes criminals can gain access to the system for weeks or months before they target your people. Scammers can make their attempts sound more genuine by confirming a relationship with a certain supplier or using familiar language. How to detect and avoid phishing These days, there are a number of security or software programs that should help protect your business against unauthorized access. However, criminals can still slip through the cracks with wire transfer fraud. There are two major workplace culture ways to prevent phishing in your business. The first is to build an environment where your employees work without time pressures and trust their supervisors. This would make spotting a suspicious email easier: since there’s usually a generic greeting, spelling mistake, or problem in the sender address. Moreover, the employee would not succumb to the urgency pressures inside the email. Secondly, you can avoid falling victim to phishing scams by building in a set of controls around invoices and security. This makes it harder for criminals to steal your information, and money. For example, ensuring that invoices are validated by three-way matching and then account details are verified with the real name and address. Likewise, the authority to wire money should only be granted to a handful of individuals. Fraud training is also important. Some of the other things that your business can do to spot and prevent phishing include: What are the types of bank statement fraud in the corporate world? Corporate fraud can have similar results to phishing, with companies losing out on millions if it’s not spotted on time. The types of corporate fraud you should be aware of include: Bank transfer fraud The most common type of bank wire transfer fraud is through an authorized push payment. Most people are familiar with these since banking apps and online payments technologies are so common. How does it work? The criminal poses as your bank, an official body or another genuine payee by sending a notification. Since authorized push payments act as an anti-fraud measure, employees are usually not suspicious at all. But this is a malicious attack. Granting the payment means that the criminal walks away with your money, and as an instant payment, clear out the cash before your accountants can catch up. False supplier fraud As the name would suggest, this type of fraud leads a criminal to impersonate one of your known suppliers, or create a new supplier persona. They send an invoice for work they haven’t completed or intercept a genuine invoice by changing the bank details from a real supplier. This is another form of wire transfer fraud. Many businesses fail to protect themselves against false suppliers since the technique relies on social engineering. After initial verification, most businesses won’t continue monitoring their suppliers’ details. But this is when criminals strike – so it’s required for companies to detect and prevent falling victim to false supplier fraud. CEO Fraud This technique involves the hackers impersonating your CEO or another senior figure in the business. A version of this fraud became very popular during 2021, known as the gift card scam. Here’s how it works: Fraud on the President can also happen through invoicing, cloning the CEO’s email address and urgently requesting finance to pay a fake invoice. Luckily, we’ve created a larger resource about CEO fraud so that your people can detect it, and protect the security of the business. Click here to read it. False customer fraud There are a number of different ways that fraudsters impersonate your customers, through: False customer fraud typically affects small businesses more than large, since they use third party programs to take payments instead of their own systems. This creates a responsibility gap, leaving the companies vulnerable to unfair chargebacks. Plus, it’s harder to three-way matching the documents – which could miss any payment detail discrepancies. Internal fraud Corporate fraud includes the likes of your own employees skimming money from the business. Most commonly, internal fraud is done through expenses, where your member of staff claims false expenses or for costs unrelated to their work. This is incredibly common, with 85% of employees admitting to lying on their expense reports. And it’s even easier to get away with for those working from home as it’s harder to verify how employees are spending their working hours. How to spot a fake bank statement Financial professionals must be vigilant in detecting fraudulent bank statements. To help identify fake documents, start by examining the overall layout and formatting. Legitimate statements typically maintain consistent fonts, spacing, and alignment. Check the bank’s logo and contact information for any discrepancies or low-quality images. Carefully review account details and transaction history. Look for inconsistent numbering patterns in…
The Future of Faster International Payments: What It Means for Corporate Treasurers
In today’s interconnected world, corporate treasurers face increasing pressure to streamline cross-border payments. As global businesses expand, so does the need for faster, more transparent, and cost-effective international payment solutions. A recent update on the European Central Bank’s TARGET Instant Payment Settlement (TIPS) service reveals promising steps toward global payment interoperability, with significant implications for treasurers managing complex multinational cash flows. The Need for Speed in Treasury Traditionally, cross-border payments have been slow, cumbersome, and costly, often taking several days to clear. This can disrupt cash flow, delay supplier payments, and increase financial risk due to fluctuating exchange rates. Corporate treasurers constantly look for ways to mitigate these issues, seeking payment solutions that align with their companies’ liquidity needs. The expansion of fast payment systems like TIPS represents a game-changer for Treasury departments, enabling near-instantaneous settlement across borders. TIPS and the Global Payments Ecosystem TIPS is designed to support real-time euro payments, but its latest initiatives aim to go beyond Europe, connecting with other global fast payment systems. According to the ECB, this will reduce fragmentation in the global payments ecosystem, a challenge that corporate treasurers regularly encounter when managing cross-border transactions. Interoperability between systems not only promises to reduce transaction times but also cuts costs—essential factors for improving overall working capital. Here are the core initiatives related to TIPS’ global expansion: 1. Cross-Currency Settlement via the OLO Scheme: This involves implementing cross-currency settlement, allowing payments between the TIPS platform and other fast payment systems without the need for direct links between them. For corporate treasurers, this would mean smoother cross-currency transactions, lower FX exposure risks, and more predictable cash flows. Having instant access to funds in multiple currencies is invaluable for managing daily liquidity needs. 2. Joining Project Nexus for Multilateral Payment Networks: Project Nexus, spearheaded by the Bank for International Settlements, aims to connect fast payment systems from countries such as Malaysia, India, Thailand, and Singapore. By linking with Nexus, TIPS will evolve into a hub for instant payments in and out of the eurozone. For treasurers managing global operations, this simplifies cross-border payments, cutting down on the number of intermediaries, which often delay transactions and increase costs. 3. Establishing a Bilateral Link with India’s UPI: India’s Unified Payments Interface (UPI) is one of the most advanced and heavily used payment systems globally. A bilateral link with UPI would unlock significant potential for treasurers, especially those handling payments in or out of India. Given that India is among the top ten recipients of remittances from the euro area, corporate treasurers can benefit from seamless euro-to-INR transfers, helping them manage both outgoing and incoming cash flows with unprecedented ease and speed. Use Cases for Corporate Treasurers The adoption of faster payment systems has several direct applications for corporate treasury functions: Faster settlement times mean that treasurers can better predict and manage daily cash flows, ensuring sufficient liquidity across global operations without having to rely on costly short-term borrowing or holding excessive reserves. Cross-currency settlement services help mitigate the risk of currency fluctuations, allowing treasurers to execute transactions at near-real-time exchange rates. This can also reduce the need for complex hedging strategies that often consume time and resources. For multinational corporations, having access to a unified payments ecosystem can drastically reduce the complexity of cross-border transactions. Instead of navigating different payment systems in each country, treasurers can rely on the interoperability of TIPS and other linked networks to ensure faster, cheaper, and more transparent payments. Fast payments ensure that suppliers are paid promptly, potentially improving negotiation terms and fostering better partnerships. This is particularly important in industries with tight supply chains, where payment delays can disrupt production. The Road Ahead: Interoperability and Instant Payments The ultimate goal of these initiatives is to create a globally interconnected instant payment network, aligning with the G20’s vision of faster, cheaper, more transparent, and accessible cross-border payments. For corporate treasurers, this means a significant shift towards more efficient international financial management. As systems like TIPS expand, treasurers will be able to make quicker decisions, improve cash management, and enhance their companies’ global financial strategies. Treasurers should stay informed about developments in the global payments landscape and consider how these advancements could fit into their broader liquidity and risk management strategies. The future is fast, and corporate treasury must be ready to keep pace. 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.
Optimize Your Cash Forecasting with AI
This article is written by Kyriba Imagine a world where manual processes and guesswork don’t bog down forecasting. Instead, your forecast is created easily using real-time data and predictive analytics. This is the potential of artificial intelligence (AI) in modern financial operations; this is the power of AI in cash forecasting. AI’s ability to process vast amounts of financial data in real-time, predict cash flow trends, and provide actionable insights is already changing the game for Treasury teams. These advancements enable organizations to navigate economic volatility with unprecedented precision and confidence in the accuracy of their forecasts. Traditional Cash Flow Forecasting Methods Contribute to Liquidity Gridlock Cash flow forecasting is a cornerstone of Treasury management. Traditionally, the process has relied heavily on historical data, manual data entry, and complex spreadsheets, requiring Treasury teams to spend considerable time consolidating data from multiple sources, which leads to inefficiencies and inaccuracies. The time-intensive nature of these traditional methods means that treasury teams are often operating one step behind and with increasing volatility in the market, that can be detrimental to future growth. Staying ahead of the curve demands a more efficient, accurate, and dynamic approach to cash forecasting–one that AI is uniquely positioned to deliver. By leveraging AI, organizations can become better equipped to handle economic uncertainties and make informed decisions. The shift from simple forecasting to a broader liquidity planning approach involves surrounding traditional cash flow forecasts with real-time data from diverse sources. This expansion allows organizations to formulate a true enterprise liquidity strategy, helping them understand and manage liquidity risk while ensuring financial stability and resilience. It All Begins with a Data Strategy A critical component of AI in cash forecasting is having a robust data strategy in place that specifies how a company collects, stores, manages, and analyzes its data. Having the right data strategy is a game changer and an essential first step for integrating AI, and real-time insights, into your cash forecasting. By tapping into real-time data processing, treasury teams can craft a full picture of their company’s liquidity and thus are better equipped to make quick, informed decisions, and optimize their liquidity performance. Additionally, introducing real-time data into the cash forecasting process helps mitigate risks- something any CFO would be happy to hear. Through scenario planning and sensitivity analysis, companies can gauge how changes in the economy, environment, and customer behavior might impact their financial position, allowing them to tweak their strategies, hedge against risks, and stay one step ahead. Connect All Data Sources to Activate the Full Benefits of AI Once a data strategy has been established, the next step is connecting all of your data sources to a single source of truth a.k.a. a data lake. By ensuring seamless integration and communication between banks, ERPs, applications, and data trading platforms, you provide the fuel AI uses to leverage intelligence capabilities effectively. This approach is specific to your organization which means that the outcome is hyper-relevant and extremely context-rich. With a data lake in place, AI tools can quickly analyze vast amounts of integrated data. This provides context-rich insights that enhance the precision of your forecasts and make it easier to achieve financial stability and business resilience. Leveraging AI for cash forecasting and liquidity performance management has enabled organizations to achieve remarkable outcomes: $1.04M average net interest benefit from 47%+ reduction of idle cash $55M average free cash flow per $1B revenue from Supply Chain Finance program 87% reduction in overall risk impact with BI-enabled exposure management Source: Kyriba Value Engineering Analysis of 341 Corporations Top Applications of AI in Cash Forecasting The integration of AI in cash forecasting extends beyond basic financial management, offering solutions that are as varied as they are impactful. Some key applications where AI is making a significant difference are: These applications enhance the accuracy of cash flow forecasting and broaden the scope of overall financial strategy, making it more powerful and responsive to both internal and external changes. By harnessing AI, organizations can both improve their immediate financial forecasting abilities and strengthen their strategic planning capabilities to set themselves up for future success. Just Scratching the Surface In a recent webinar, Kyriba’s Viena Swierczek, Solution Engineer, and Lisa Husken, Value Engineer, highlighted how AI, especially as it relates to cash forecasting, refines existing processes and paves the way for groundbreaking approaches in financial management. “AI is not just about automating existing processes,” Lisa Husken, Kyriba Value Engineer, said. “It’s about enabling entirely new ways of thinking about financial strategy and execution.” “We are just scratching the surface of what AI can do in the financial sector,” Viena Swierczek added. “The next few years will be crucial in defining how deeply integrated AI becomes in our everyday decision-making processes.” This forward-thinking perspective invites finance leaders to consider the broader opportunities of AI beyond immediate operational improvements. 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