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Health system gains efficiency by automating receivables

A leading regional health system adopted U.S. Bank Payment Consolidator to digitize paper-based payments, eliminate manual payment posting, and accelerate cash flow, leading to more efficiency.

COMMERCIAL REAL ESTATE

Real estate firm weeds out checks with AP automation

A national real estate company in the Midwest decided it was ready to vastly improve its accounts payable process. So, they turned to U.S. Bank to deliver a powerful AP automation solution.

Digital Onboarding helps finance firm’s clients build communities.

Every new deal that this specialty finance firm makes requires the opening of a bank account under tight deadlines. Quickly opening these accounts is a key part of keeping their high volume of closings running smoothly.

Digital payments help colleges meet student needs

Students at the College of St. Benedict and St. John's University wanted to receive refunds and other payments via methods other than paper check. U.S. Bank Payee Choice lets the students choose how they get paid, plus saves money for the universities by reducing paper and postage costs.

Faster payment options propel insurer’s digital transformation.

When a global provider of employee insurance benefits embarked upon a company-wide digital transformation, it realized there would be unique challenges in upgrading its money movement technology.

National commercial real estate (CRE) developer discovers accounts payable efficiencies

With U.S. Bank experts advising on CRE-specific operational elements, EDENS has successfully leveraged virtual accounts to reduce inefficient check payment processing and earn more rebates.

AGRICULTURE

World’s largest cooperative soybean processor converts to virtual payments

Using virtual payments for certain contractor and supplier payments has saved Ag Processing Inc (AGP) hundreds of thousands of dollars and greatly reduced its risk of check fraud.

Virtual card payments help commercial real estate (CRE) firm pay vendors faster

Ryan Companies uses vendors in the communities where it works and wants to pay them as promptly as possible. They turned to U.S. Bank Virtual Pay to replace paper checks, reduce fraud, save money and holistically improve client payments.

TRAVEL & HOSPITALITY

Oregon resort adopts Zelle ® to streamline payments and make them more secure

In need of a way to save time and costs associated with employee reimbursements that were traditionally done by paper check, Sunriver Resort worked with longtime partner U.S. Bank to transition payments to Zelle ® .

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Treasury Management Case Study

Efficiency, efficiency, efficiency: how a new york developer sought to streamline and protect its financial operations.

August 10, 2024 | 5 min read

Argo Real Estate, one of New York’s leading property owners and managers, had ambitious plans to expand its real estate footprint in the 21st century. However, its operations were being hampered by an innovation from the 17th—checks. The company was printing and mailing hundreds of paper checks every month across accounts for its various properties. “We were spending way too much time, money and effort processing these transactions manually,” said Mark Feinberg, Argo CFO. “Plus, checks open a wider door to fraud. We needed help automating these treasury operations.”

The Challenge:

Automating for advantage.

Founded in 1952, Argo owns, manages and brokers real estate, with a portfolio that includes 80 buildings and more than 10,000 residential units in New York and New Jersey. While Argo operations were moving more swiftly, its financial processing faced cumbersome touchpoints which, while they may have had utility in an earlier era, were making it difficult for the company to keep its momentum.

“Our accounts payable processes had been long established and they were deeply embedded in our operations,” Feinberg said. “But interestingly enough, many other real estate companies handle their remittances the same way. We saw that taking a giant leap forward on the infrastructure side could give us a significant advantage over our competitors.”

Eager to begin the evolution, the company realized it needed a strong and experienced banking partner to help it automate payments and streamline internal processes. Agro reached out to Capital One Commercial Bank, which offered both extensive real estate and treasury management expertise.

We were spending way too much time, money and effort processing these transactions manually. -Mark Feinberg, CFO, Argo Real Estate

How Capital One Helped

“We had worked with Argo on previous occasions, so they knew us, and we knew them,” said Scott Dolinko, Vice President of Cash Management for Capital One Commercial Real Estate. “But they had not realized the vast array of treasury management services we could provide.” Dolinko’s team mapped out Argo current operations and developed thinking around what an ideal state would look like in terms of payment processing.

“Capital One set itself apart from the very start,” Feinberg recalled. “They came prepared with third-party providers, fresh thinking, and a complete package that included real-time reporting and rewards in addition to automation. We were happy with their proposal and impressed by their enthusiasm.”

The bank’s specialists were familiar with migrating paper-based treasury operations to electronic platforms, especially with respect to the unique needs of property management firms. “Every day, these companies issue hundreds of remittances to suppliers, contractors, and subcontractors across their portfolio,” Dolinko noted. “We offered true customization, tailored to Argo’s agreed upon specifications.”

We offered true customization, tailored to Argo’s agreed upon specifications. -Scott Dolinko, Vice President of Cash Management, Capital One Commercial Real Estate

The Results:

Moving accounts from payable to paid.

Capital One worked closely with Argo’s existing software provider to replace paper checks with one-time-use virtual card numbers.

“Everyone involved in the implementation was committed to its success,” Dolinko recalled. “We were always looking; how can we make this function better, how can we make this process more efficient?”

The virtual card system allows Argo to dramatically reduce the number of checks it writes and streamline reconciliation.

“Capital One is helping us create a stronger foundation to get to where we need to be,” said Feinberg. “So, we can spend less time looking at the future and more time shaping it.”

Take the Next Step

To find out how Capital One Commercial Banking can help your organization streamline its payments processes, visit capital.one/tm.

About Capital One Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $257 billion in deposits and $379 billion in total assets as of 09/30/2019. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol “COF” and is included in the S&P 100 index.

Source: Capital One reported data as of 09/30/2019, unless otherwise noted.

Capital One Treasury Management, 299 Park Avenue, 14th Floor, New York, NY 10017

Subject to credit approval. Terms and conditions apply. Products and services are offered by Capital One, N.A., Member FDIC. © 2020 Capital One.

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• Payments Optimization
• Treasury Management System – Selection & Implementation

By Hyesi Jun

Senior Advisor, Asia Pacific Wholesale Payments Solutions

By Surbhi Vijh

Senior Advisor, Treasury & Working Capital Advisory, J.P. Morgan Payments

By Hyesi Jun , Surbhi Vijh

Key takeaways

• implementation

Recent global events have permanently shifted how corporates operate and embrace digitization. To prioritize efficiency, risk management and governance, corporates have a heightened need for automated processes to support day-to-day operations through a streamlined technology platform.

Utilizing a treasury management system (TMS) can provide the clarity and visibility needed to navigate critical financial decisions.

The evolution of the treasury management system landscape

A TMS is no new solution. Historically, organizations have eluded large technology budgets for treasury, but as liquidity risk takes front stage  and treasury teams evolve to take on greater strategic roles in their companies, the clear benefits of a TMS have prompted corporates to invest in treasury technology.

A full suite of TMS can help automate the process of managing treasury operations, such as cash flow, assets and investments. Utilizing a treasury management system can help integrate across systems and data inputs, provide real-time cash positioning and cash flow forecasting (both internal and external) and data inputs, provide real-time cash positioning and cash flow forecasting for comprehensive liquidity management , facilitate payments from initiation to reconciliation, manage risk exposures and support investment and debt management activities.

A TMS is also used to support complex treasury structures such as in-house bank and payment factory. By automating and digitizing treasury processes, organizations can gain efficiency from cost and productivity, while strengthening governance by removing manual errors, standardizing formats and providing a full audit trail. To maximize opportunities in implementing a TMS, developing a project management plan is vital.

TMS selection and implementation approach

As a best practice, treasury teams should have an implementation plan prior to execution, which generally includes the following steps:

1. Project kick-off

• Define objectives
• Assign resources (Treasury, IT, 3rd party)
• Determine budget
• Determine functionality / scope down to task level
• Define “must have” vs. “wants” including potential future needs
• Create vendor list

3. Vendor evaluation

• Conduct vendor presentations/demos
• Consult with IT
• Request proof of concept
• Review references, with emphasis on client service and responsiveness
• Review contract terms and conditions
• Determine implementation resourcing requirements

4. Selection and design

• Select vendor and system
• Define project team and timeline with vendor
• Determine the connectivity requirements and plan with internal systems and external parties (e.g., banks)
• Gather data required to be loaded into the system

5. Implementation

• Configure modules
• Set up accounts and interfaces
• Test connectivity
• Develop test scripts and workflows

Weighing your options: efficiency gains vs. implementation effort

Spreadsheets have low efficiency gains and low implementation requirements and effort.

Online bank portal has low to moderate efficiency gains and low to moderate implementation requirements and effort.

Fintech and niche have moderate to high efficiency gains and low to moderate implementation requirements and effort.

Standalone treasury management systems have high efficiency gains and moderate implementation requirements and effort.

ERP treasury has moderately high efficiency gains and moderately high implementation requirements and effort.

Best of bread systems architecture has high efficiency gains and high implementation requirements and effort.

Homegrown has high efficiency gains and high implementation requirements and effort.

In weighing the options for a TMS, the key is to start with the company’s profile (e.g., domestic vs. global, growing vs. mature) to determine the required performance level – in addition to the specific requirements and functionalities needed, as well as the investment dollars and expected efficiency gains in the long run.

Vendor evaluation and selection should include these three areas of comparison:

1. Functionalities

• Short and long-term needs
• Integration and automation of processes
• Core TMS functionalities and value-adds
• Connectivity capabilities and experience
• Internal and third party systems
• Bank partners (SFTP/Swift/API)

2. Roll-out

• Deployment model
• Inter-facing requirements
• IT project resources required
• IT support from vendor
• Configuration expertise for proper application and maximizing utility
• One-o. implementation costs
• Software license
• Ongoing maintenance costs
• Resource savings (STP) including process e.ciencies
•  Human capital  

Key takeaways – selection

Requirements

Develop clarity around your needs and recognize that the vendor’s provision of functionalities should match all of your current and potential future needs. It is also essential to engage your banking partners at this stage to ensure the selected vendor can seamlessly integrate with your bank, reducing your development burden and enabling a faster implementation

It is important to note the latest trends in market. ERP providers have in recent years invested into their treasury modules with easier integration with the general ledger and streamlined interfaces as a key driver for adoption. Many corporates in purchasing ERP platform as a bundle may in fact, already have treasury management capabilities currently not in use. Many providers now also offer hosted options on cloud or software-as-a-service to be agile and flexible to meet clients’ needs

Multifaceted companies can mix and match models. Many may use a standalone TMS or a treasury module of ERP, but identify specific functionalities of other vendors for best of breed systems architecture (e.g., bank account management can be executed by a cloud based vendor while other capabilities are provided by a hosted vendor)

5 key phases to a successful implementation

Prior to a TMS implementation, a clear strategy of treasury’s current and future responsibilities, as well as target operating model, should be defined. Understanding the root causes of treasury’s pain points is key to ensure an investment in a TMS will deliver the desired improvements.

Early engagement and support from the three stakeholders: treasury, IT (responsible for the system implementation and maintenance) and businesses (who will consume the analytics) is critical to the successful transition to a data-driven treasury.

1. Business blueprint

• Design documentation that includes organization structure, master data, processes, reports, authorizations, interfaces and migration
• Develop a configuration plan with detailed time planning of development tasks (with assignment of durations and dependencies for tracking)
• Static data collection (business partners, bank account, general ledger, market and cash mgmt. master data)

2. Configuration

• Configurations are done to support the processes. All configurations are unit tested before being transferred to testing environment
• Create UAT test cases
• Write end user training material
• Cutover plan is created for activities to be performed prior to go-live which includes: Transport of configuration settings to production environment, data conversion (master data and transaction data)  

3. User acceptance test

• Key users test all processes configured during the previous phase
• Identify issues during testing and analyse them
• Adjust the configuration of the application to resolve the issue
• Sign-off by steering committee

4. Final preparation

• Production environment is prepared
• Data tables are populated
• Transactional information is loaded
• Training of all end-users

5. Go-live and after care

• Officially go live with the project
• Review the performance of the system
• Engage with aftercare support to quickly resolve any issues
• Ensure alignment to said SLA (service level agreement)

Key takeaways – implementation

Due diligence

Engage your banking partners, as well as key stakeholders, especially technology, early in the process – it will bear dividends in the future

Focus on the user

Don’t undermine the user aspect of TMS – be mindful of the user experience

Systems connectivity

Many use TMS as a stand-alone, but to get full benefits, it should be seamlessly connected to ERP, FX and other systems and software

As businesses evolve, client pain points relating to manual reporting, payment initiation, and reconciliation are more complex than ever. J.P. Morgan has extensive experience working with premier treasury workstations and ERP vendors for complex treasury implementations to enable process standardization and automation as part of corporate technology transformation.

To learn more about how we can support your business, please contact your J.P. Morgan representative.

The statements herein are confidential and proprietary and not intended to be legally binding. Not all products and services are available in all geographical areas. Visit jpmorgan.com/disclosures/payments  for further disclosures and disclaimers related to this content.

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How transaction banks are reinventing treasury services

Cash and liquidity have long been considered key indicators of corporate financial health, and the pandemic has confirmed the continued relevance of this fundamental metric. During the crisis, “cash excellence” proved crucial in enabling continued operations for enterprises still early in their development; and as a business matures, it becomes a key lever for releasing capital to invest in growth. Recently, liquidity metrics have received as much focus as more widely publicized measures like operating margins and EBIT.

About the authors

This article was a collaborative effort by Alessio Botta, Reet Chaudhuri, Nunzio Digiacomo, Matteo Mantoan, and Nikki Shah, representing views from McKinsey’s Global Payments Practice.

Meanwhile, underlying trends in digitization and increased investor scrutiny are setting new standards for corporate treasury professionals. Cash forecasting is regularly cited among the most inefficient processes by small and large organizations alike. CFOs and CEOs are seeking partners to help them navigate the shift from reporting to predicting. Solution providers (whether banks or software and fintech firms) able to solve this problem will be well positioned to reinforce or extend commercial relationships.

Historically, bank-provided treasury platforms have focused on core transaction execution central to their corporate relationships. The advent of software as a service and API connectivity has made robust, multifunctional workstations far more feasible; in response, software firms and other third-party providers have grasped this opportunity to create solutions that are gaining ground with corporate clients of all sizes across an array of sectors.

Banks recognize the importance of being close to decisions around core underlying payments, investment, and financing flows that their corporate customers are making. Liquidity management tools—including treasury management, cash forecasting, supply-chain finance (SCF)—are increasingly being embedded into the new generation of corporate global transaction banking (GTB) portals. For fintechs and software players with a focus on customer acquisition and retention, banks are increasingly viewed as an important route to market and therefore potential partners. For their part, banks are clearly motivated to provide broad-based state-of-the-art support for commercial banking functions that generate over $550 billion in annual revenue, according to McKinsey’s Global Payments Map.

Banks face several strategic decisions on this front. They must first determine their desired role in this evolving ecosystem: integrators and orchestrators of a full suite of services, background service providers, or developers of proprietary front ends built in-house. Factors such as geographic footprint, client sector focus, and investment appetite will inform the best path for a given bank.

Although the classic build-buy-partner decision remains relevant, recent years have seen a decided tilt toward the partnership model within the treasury space. Banks and third-party solutions usually offer different functionality and strengths, with all groups increasingly realizing they can exist in harmony. With speed to market a unifying objective, bank distribution paired with software-firm agility has proven to be a potent combination, whether for the white labeling of third-party technology or in scenarios where banks serve as a channel for branded providers of these services.

In this article we’ll explore the evolving needs of corporate treasury functions, and the complex and fragmented provider landscape that has developed to address them. Based on direct input from practitioners we’ll also detail the factors that should inform each bank’s decision on how to proceed in the space, and offer examples of the components of successful bank-provider partnerships.

Evolving needs of the treasurer

Forward-thinking CFOs and treasurers have begun to fundamentally rethink the treasury function, shifting its role from custodian of historical cash activities to encompass a more strategic and expansive approach of “owning” the full suite of enterprise liquidity. In support of this mandate, treasurers are looking for technology platforms offering predictive liquidity and cash-flow modeling. Specifically, they need robust forecast capabilities that incorporate cross-border positions and exposure to various currencies.

McKinsey recently conducted focus groups with CFOs and treasurers of large corporate and mid-cap European firms. These conversations revealed significant pain points in cash forecasting and currency risk, invoice processing, and payment reconciliation. Cash forecasting is considered the least efficient financial workflow by both small and large organizations—in some cases requiring more than a week to gather and compile forecasting data from a variety of formats, causing further strain.

“What most interests me is the possibility to manage my working-capital operations without manual loading of data, specifically for invoice discounting and factoring, and to have the possibility, not only to have a reporting instrument, but also a predictive tool for operations,” was a representative example of such feedback. Another treasurer offered: “We are building a new digital platform, consolidating lots of data into an integrated system, to help us unlock the potential daily processes, improve transparency and access to real-time information, and enhance security standards.”

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Overall, treasurers of large corporates highlighted five primary needs:

• Timely visibility into all global transactions
• Eliminating time-consuming and error-prone manual payment-generation workflows
• Reducing exposure to nonstandardized bank documentation and other compliance issues causing significant delays or confusion
• Protecting against fraud
• Keeping pace with industry changes to formats and technologies, particularly in the payment process

These interviews further revealed that large enterprises prioritize seamless integration with enterprise resource planning (ERP) systems and the ability to make swift decisions (for instance, access to financing, short-term investments) based on underlying cash positions. CFOs and treasurers of these businesses are exploring SCF programs—involving numerous internal and external stakeholders—for an efficient and sustainable approach to circumventing supply-chain failures resulting from financial disruption. Their priorities in structuring a comprehensive SCF program include:

• Internal systems integration. The typical organization supports several ERP systems across multiple entities, necessitating integration among platforms to allow treasury management systems (TMS) to work properly. A successful supply-chain finance program requires full integration among all data sources and reporting software, enabling the treasurer and other end users to make decisions based on real-time data and analytics.
• Establishing multi-funder models. Price is no longer the sole criterion for evaluating liquidity financing alternatives; ease of satisfying know your customer (KYC) requirements, credit capacity, and platform design play increasingly crucial roles for treasurers of large corporates. Despite their typically higher nominal price, bank-independent technology solutions are becoming the preferred model given their added flexibility, ability to support a multi-funder model, and often more rapid incorporation of new features addressing evolving treasury priorities.
• Setting clear goals and objectives. Successful programs require the clear identification of targets and KPIs to create a framework for execution. With various stakeholders involved (treasury, procurement, IT, legal, accounting) the absence of common and measurable objectives can lead to cross-functional misalignment. One treasurer suggested essential elements of a successful program include a negotiation strategy for payment-term extensions, as well as a segmented messaging strategy for various suppliers. The latter point is particularly instructive: within large SCF programs, it is important to coordinate the information coded within a payment transaction based on the platforms employed by each party.

The situation in the small and medium-size enterprise (SME) space is quite different. Particularly at the smaller end of the spectrum, proprietors are less inclined to look to third-party providers for financing and treasury-management solutions, relying instead on bank offerings. Keeping pace with daily operational realities leaves little bandwidth for digitization efforts—in fact, larger B2B buyers are often the drivers behind modernization of smaller supplier partners. Nonetheless, relations between SMEs and their banks are often complicated, with lending terms frequently incompatible with client needs even when products are available. As a result, owners often elect to finance with personal funds or forgo debt altogether. McKinsey’s research identified the greatest SME need to be access to liquidity, access to broader B2B markets (with cross-border funding posing particular challenges), and transaction complexity. While the threat of bank disintermediation is not as imminent for the SME market, the emergence of a compelling third-party proposition certainly poses future risk.

The liquidity management ecosystem: Solutions addressing these needs

In response to these priorities, corporate software solutions are evolving to foster cash-excellence capabilities throughout the organization. These solutions span the full scope of CFO responsibilities and offer different functionality, each contributing to improved cash and liquidity visibility and positioning. In recent years, a number of solutions have sought to address the evolving needs of businesses’ cash and liquidity management—including ERP providers, banks, and third-party software including treasury management systems—and a wider set of players across the liquidity management space. McKinsey estimates annual global corporate spending to be $3.5 billion annually on software addressing the needs outlined in this article.

The scope of these offerings includes (Exhibit 1):

• Next-generation approaches to cash and treasury management. Extending beyond basic visibility and forecasting, these generate more accurate multicurrency forecasts, streamline workflows, and enable more robust hedging, financing, and investment decisions.
• Order-to-cash/receivables solutions. These streamline the accounts-receivable process, reducing days sales outstanding, increase collection rates, and further enhance visibility and accuracy of cash forecasts.
• Source-to-pay solutions. By simplifying accounts-payable and payments workflows, they generate benefits including reduced fraud losses, payments prioritization for identified suppliers, and increased visibility and accuracy of cash forecasting.
• Integrated working-capital finance, trading, and investment activities. This suite provides treasurers and CFOs with a wider range of options than previously available, including supply-chain finance, receivables financing, and short-term investment products.

Players and approaches differ by geography: for instance, the US market is driven primarily by third-party software vendors, whereas in Asia the solutions tend to be bank-led. Cloud-based solutions have made these capabilities more accessible to SMEs—even those without a formal treasury department—thereby significantly widening the potential addressable market.

The 2021 McKinsey Global Payments Report

Key success factors for banks partnering with fintechs on offerings.

Banks, which have historically not focused on the cash-management software space, increasingly realize that providing at least a portion of this functionality and embedding themselves more fully into the corporate workflow reduces the risk of disintermediation from the underlying payments, investment, and financing flows of corporate customers. Accordingly, corporate liquidity-management tools—including treasury management, cash forecasting, and SCF—are increasingly embedded into the next generation of corporate GTB portals.

Asia–Pacific focus

While the Asia–Pacific payments sector has benefited from extensive fintech activity focused on digitizing small merchants and enhancing overall business efficiency, there has been relatively lighter emphasis on modernizing treasury solutions for large corporates. Such opportunities are limited in part by divergence in infrastructure and regulatory standards across countries (currency convertibility, real-time payment rails, and market access, for example) making it challenging for banks or software providers to create solutions capable of delivering sufficient scale and value for multinational clients operating across the region.

Some banks in the region have taken the initiative to develop bespoke solutions addressing specific client needs, however—for example:

• Singaporean multinational bank DBS implemented a fully automated real-time payment system for drivers at ride-hailing firm Gojek. This created a differentiating feature recognized by the client as a recruiting advantage. Rather than waiting until the end of the week for payment (as with other taxi firms), Gojek’s drivers can now transfer funds to their bank account after each trip.
• ICICI Bank’s STACK offering provides customized digital banking services to companies in over 15 sectors, with the goal of facilitating operations across these clients’ entire ecosystem. The Indian bank also established eight “ecosystem branches” to support and expand the rollout of these capabilities across channel partners, employees, vendors, and other counterparties.

Going forward, large Asia–Pacific corporate entities are likely to enjoy features such as dynamic cash-flow forecasting, source-to-pay solutions, and multi-funder models, similar to their counterparts in more developed markets. In preparation, banks in the region should stay ahead of the curve by rethinking their treasury-services strategies. This involves determining which client groups to target (as not all capabilities will resonate equally across sectors), which features are likely to gain the most initial traction with that segment, and whether these solutions are best developed in-house or via partnership with a fintech firm.

Some banks have developed vertically focused solutions with functionality and integrations designed to meet the unique needs of strategically important customer segments. The rise of open banking, the ongoing search for new banking revenue models, migration of services to the cloud, and client demand for integrated experiences are also informing these strategic decisions. DBS has been particularly active in this arena in Singapore; for instance, using APIs and mobile apps to enable real-time payments to online merchants and delivery-service drivers (see sidebar, “Asia–Pacific focus”).

Banks face the ever-present decision of whether to build, partner, or acquire these capabilities. Recent years have seen a material increase in the partnership model, for white labeling of third-party technology as well as banks acting as a channel or seller for such services. This model enables quicker time to market and faster introduction of new customer functionality. Fintechs and software players with a focus on customer acquisition and retention increasingly view banks as a priority channel and an efficient path to market (Exhibit 2).

In McKinsey’s experience, the following key success factors optimize the potential for bank-fintech partnerships to accelerate their time to market as well as commercial impact.

• Document a commercial approach determining both ownership and roles with regard to customer engagement. As an example, while initial contact might be conducted by the fintech alone, subsequent meetings will be handled together since customers—particularly large corporations—are seeking integrated product offerings requiring expertise that extends beyond technology platforms.
• Develop a go-to-market strategy tailored to customer segments. For some segments, fintech tools may be offered as white-label solutions via bank proprietary assets, thereby differentiating the commercial offer from other segments in which the fintech offers its platform as a stand-alone suite backed by a bank acting as a counterparty for execution of payment transactions.
• Identify and agree on an IT implementation and delivery road map to serve as the baseline from which the bank will develop its commercial campaigns.
• Establish a dedicated IT-business governance team with recurring meetings to address commercial challenges as well as technology enhancements, potential change requests, or new deployments.
• Develop internal expert capabilities in the partnership products (likely in product specialist and relationship manager roles) as well as new digital tools the fintech may bring to the table as key assets. When proposing client solutions, these individuals will ask for interactive demo sessions, during which the sales network must possess the capabilities to surf the new platform and manage the end-to-end digital process underlying the new product.
• Identify KPIs by which the overall partnership will be valued and establish the proper time frame for KPI monitoring and assessment.

Partnership benefits

The following examples give some insights into how established partnerships work to enhance the offerings of both parties:

• Société Générale and Kyriba joined forces to offer cloud management solutions to their corporate clients. These services include real-time monitoring of treasury positions, payments automation, multibank connectivity, and ERP payment validation workflow management.
• Citi’s Smart Match product, enabling corporate clients to enhance straight-through-reconciliation rates in cash applications, is powered in part by AI and machine-learning capabilities from HighRadius. The parties formed a strategic partnership in 2018, 1 “Citi Partners with Fintech HighRadius to Launch Citi® Smart Match Powered by Artificial Intelligence and Machine Learning,” July 12, 2018, highradius.com. helping Citi and its clients to merge disparate pieces of payment data and reconcile payments received against invoices issued more efficiently.
• DNB’s 2018 strategic channel sales partnership with Kyriba provided the bank with a new set of updated financial management tools to centralize payments, automate workflows, and detect and prevent payments fraud in real time for more than 220,000 corporate clients. These cloud-based services also address the need for stronger compliance and data protection required by evolving government regulation.

Banks are motivated to provide broad-based state-of-the-art support for commercial banking functions that generate over half a trillion dollars globally in annual revenue. They remain in a sound position to determine their role in serving these clients going forward. Although buy and build remain valid alternatives, in most cases a partnership approach enables banks to introduce new products and functionality more rapidly in an environment in which time to market is critical.

To successfully manage partnerships with fintechs and capitalize on their opportunity to play a leading role in the redefinition of treasury services, banks need to enhance a variety of internal capabilities ranging from sales management and product evangelism, to robust commercial and IT governance, and effective go-to-market strategies.

Read the next chapter in the report, " Merchant acquiring and the $100 billion opportunity in small business ."

Alessio Botta is a senior partner, Nunzio Digiacomo is a partner, and Matteo Mantoan is a specialist, all in McKinsey’s Milan office. Reet Chaudhuri is an associate partner in the Singapore office, and Nikki Shah is an associate partner in the London office. 

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Treasury Management Case Study

Overwhelmed by banking acronyms? Unsure of the steps needed to take out a loan? Confused about different lending options? Don’t worry. We’ve got you.

We cover all these topics and more in our video series, Making Cents . Our knowledgeable associates break down a variety of banking topics, offering viewers education and clarity. Each video will leave you feeling empowered to make smart financial decisions that fit your needs.

In this edition, AVP – Treasury Management Sales Specialist Matt Rouse is joined by the CFO of Halvor Lines, Tom Quintus, to answer some rapid-fire questions from our host, Marketing Director Hannah Willis. Here’s what we learn:

• Hannah starts off by warning Tom about the perils of the Jargon Jar. He is appropriately afraid.
• Matt tries to catch Hannah in some jargon, but since she’s the host, she’s exempt. Deal with it.
• Tom gives a brief overview of Halvor Lines, one of the region’s top over-the-road trucking companies with over 900 employees.
• They run four different modes of freight. We didn’t even know there were that many kinds. 
• Put simply, treasury management is the ability to move your funds. It’s something banks offer customers who want liquidity and easy access to ACH wires … Yeah, that’s jargon. The quarter goes in and Matt tries again.
• ACH means automated clearing house, which is how employees get paid via direct deposit and it’s how businesses send payments to vendors.
• Treasury Management also includes things like cash management and company cards.
• Halvor Lines was the pilot customer for NBC’s Treasury Management program five years ago.
• It’s designed for large enterprises — big businesses with lots of employees, vendors, customers and complexity.
• Halvor Lines already had a great working relationship with NBC, but they had a number of banking accounts with other institutions as well. It was a financial patchwork and Tom, as a new CFO, needed visibility, action and efficiency. NBC provided it all.
• The process starts with a conversation to make sure you’re a good fit for our Treasury Management product. It’s important to know what your needs are and how NBC can fulfill them.
• Tom uses the product almost every single day, giving him key visibility into their capital. In business, opportunities require speed and access to capital, so easy access to that information is crucial.
• Tom sees business partnerships as transactional or relationship-based. And NBC is a relationship–based partnership to Halvor Lines. And that requires a nurtured relationship with constant communication. And the trust and understanding Halvor and NBC share has been a sizable advantage over the years.
• In a world full of competing priorities, Tom would encourage business leaders to reach out to NBC about their Treasury Management product, as he has found the investment in time to be minimal and the reward on that investment to be great.
• If you’re looking for a local, community bank with a national bank-sized solution, reach out to NBC.

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What banks can do to grow their treasury business

Research report.

• Incumbent banks’ dominance in treasury management in the US is under threat from new competition and evolving customer expectations.
• If banks continue to offer the same undifferentiated products as they do today, they may lose market share to nimble, customer-focused fintechs.
• Banks that are more agile, however, are likely to increase revenues and grow their portfolios.
• Accenture surveyed 302 US businesses cross-industry to explore the treasury management market and how banks can gain customers and grow revenue.

New competition and evolving customer expectations

Commercial banks in the US have enjoyed a prolonged era of record-breaking growth in commercial deposits. But that is changing fast as their customers respond to rising inflation and interest rates by shifting deposits to higher-return-bearing instruments. In this environment, commercial customers value quality treasury management offerings more than ever—but they also want more from their banks. 

The arrival of API-enabled solutions and fit-for-purpose fintech capabilities is likely to alter the composition of treasury management products and services revenue pools. This will influence bank strategies for years to come.

Banks should not be complacent

Accenture Research confirms banks at this time are still the preferred treasury management provider, with fintechs remaining a minority player. However, organizations are satisfied with—but not enthusiastic about—the somewhat undifferentiated set of treasury management products and services they get from their banks.

This has created an opening that hungry new fintech companies are looking to exploit. Our survey found that 44% of respondents have considered moving to a fintech provider in the past year. 

Why are bank customers considering the move to a fintech for treasury services?

Even in the face of rising customer expectations and fierce competition, banks have several levers they can pull to optimize their treasury management experiences. You can get started today by taking the following steps.

Flex offerings and experiences to customer needs

Customize your offerings and experiences to meet customer needs in their preferred environments.

Focus on value-added services

Banks that offer an ecosystem of services like real-time visibility in portals, analytics tools, and forecasting stand out from competitors.

Optimize pricing

Pricing structure and transparency are critical, as cost is a primary reason banks switch to fintechs.

Empower treasury management talent

Customers prefer human engagement with treasury solutions – don't forget it is still a people business.

Download our report to further explore these next steps and reach out to your Accenture Commercial Banking lead to learn more.

59% of survey respondents are aware that fintech providers offer treasury services that could reduce their reliance on existing banking partners.

How is treasury management changing?

The expectations of commercial banking customers are changing as treasury professionals become accustomed to the seamlessness of the tech they use as consumers. Furthermore, with treasury management becoming more strategic in a time of rising inflation and interest rates, companies are looking to treasury management providers to offer them more tailored services and higher levels of automation. At the same time, banks are facing growing competition from fintechs and other new players. They have reached a fork in the road where they have a choice between capitalizing on new developments to grow existing portfolio revenue and drive acquisition of new customers—or falling behind the market.

How do fintechs compete in treasury management?

Fintech is new to treasury management, but it’s growing fast. Emerging fintech providers are entering the market with innovative, intuitive solutions for automating payables and receivables, streamlining cash flow forecasting, and digitizing core treasury management functions for small and large businesses alike. 

Some of them integrate capabilities such as purchase order generation, invoice digitization, exception handling, and cash application into a single offering. Many fintechs integrate treasury capabilities into ERP and accounting systems to offer a superior end-user experience. They also offer solutions that address challenges in underserved vertical markets and offer streamlined onboarding processes.

What are banks’ advantages in treasury management?

Banks hold insurance and regulatory certifications that allow them to offer services which fintechs cannot easily replicate. Their size, stability and access to low-cost capital are important to many commercial customers. Banks also have gateways to clearing and settlement financial market infrastructures and central banks, which fintechs lack.

Are treasury management fintechs a threat?

Fintechs threaten banks’ treasury management business with commoditization and disintermediation. Some banks might choose to collaborate with fintechs to access new customer pools. However, such a relationship might see the fintech owning the customer interface, while leveraging the bank’s back-end functionality, balance sheet and regulatory power. This could erode a bank’s fees and diminish its relationship with its customers.

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DNB Bank Optimises Cash Management Solutions for Customers

The DNB Group is Norway’s largest financial services group and one of the largest in the Nordic region in terms of market capitalization. DNB is a leader across diverse financial services. The group offers a full range of banking services, including loans, savings, advisory services, insurance and pension products for retail and corporate customers. In addition, DNB is Norway’s largest internet bank with more than 1.3M users across multiple sectors and industries.

With over 220,000 corporate clients globally, DNB decided to rollout a digital treasury solution in a phased approach internationally. To achieve this, DNB required a treasury solution that would:

• Meet specific Nordic banking and regulatory requirements at time of launch with the added ability to be responsive and easily adaptable to other markets — all on one platform
• Provide a single software engine to deliver treasury solutions that would make DNB’s corporate banking clients more efficient
• Be compatible with DNB’s existing online banking portals
• Support DNB’s end-user’s multi-bank banking structure, not just those that bank with DNB
• Have the ability to be deployed quickly and en masse
• As the leader in on-demand, high-performance, digital treasury solutions, only Bottomline Cash Management and Payments was able to deliver on DNB’s unique and complex requirements.

Project highlights

DNB deployed the Bottomline Cash Management and Payments white label solution in just under 20 weeks

Launched the market-ready “DNB Finsight” solution at EuroFinance Copenhagen in October 2019 to great fanfare and positive industry reviews

DNB Finsight’s promise is “Simplifying Treasury”

Completed the First Wave of pilot clients (100) in less than 60 days after market launch

Target to reach 2,000 clients on the DNB Finsight platform

Our clients trust us to deliver solutions that make their banking and treasury management easier. Bottomline provides the engine that allows us to do this. We chose Bottomline because of the quality of their solution as well as their flexibility. By partnering with this leading technology innovator, we will continue to add valuable treasury services to our clients now and in the future. Anders Grevstad | Executive VP Category and Transaction Banking | DNB Group

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Cash Management Strategies in an Evolving Economic Landscape

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How Delivery Hero digitally transformed treasury management

By combining technology with a spirit of innovation, the food delivery network is setting new standards in treasury.

• 1. Better question
• 2. Better answer
• 3. Better working world
• How EY can help

The better the question

Could treasury processes become as real-time as transactions?

Delivery Hero processes more than 140 million food orders per month. With these volumes, traditional treasury systems quickly fill up.

I n April 2021, Delivery Hero broke another record: processing 100 orders per second on a single day. That’s 100 servings of pizza, pasta, sushi, schnitzel and curry — whatever hungry customers desired — per second. In the first quarter of 2021, Delivery Hero handled more than 650 million food orders overall. Orders that were cooked in local restaurants, processed through the Delivery Hero platform, ordered, and paid for by hungry customers across about 50 markets.

These numbers tell an impressive success story that Delivery Hero has written, over recent years. Founded in Berlin in 2011, the start-up grew from 12 to more than 29,000 employees globally. Today, Delivery Hero is the largest food network outside China and has been a member of the DAX-30 since 2020.

Traditional treasury approaches reached their limits at Delivery Hero

All those millions of food orders worldwide, every day, make for a significant amount of money coming in together with a large amount of corresponding payment transactions being carried out. For the treasury function at Delivery Hero, the great success of the business also created great challenges, because traditional approaches and systems could hardly keep up with growth figures on this scale.

"We found that the existing software solutions could no longer meet our requirements for mass processing, automation and transparency. So, we worked with our long-time advisors from SAP and EY to determine how we could get an innovative and efficient treasury solution deployed," says Thomas Boully, Senior Director Finance Systems at Delivery Hero.

Christian Schmahl, Treasury Director at Delivery Hero, explains: "On the one hand, there is the incredibly high and steadily growing volume of transactions themselves. We must keep this in mind. On the other hand, payments always involve risks that need to be addressed. The technological infrastructure must grow with the business."

A tall order: An innovative and ambitious solution

“Developing and implementing an innovative and ambitious treasury solution like this was a tall order for the team at EY and for our alliance partner SAP," says Thomas Schmidt, Head of SAP Treasury Consulting GSA, Ernst & Young GmbH. Schmidt and his team specialize in adapting SAP solutions specifically to customer environments and challenges.

"Delivery Hero's business model would push even mature finance departments in large corporations to the limits of their treasury management performance. It is even more remarkable that Delivery Hero has sought not only a suitable solution, but also an innovative and ambitious one," says Schmidt.

The better the answer

A dynamic digital system for a dynamic delivery environment

The full range of SAP solutions plus the pillars of unification, integration and automation formed the cornerstone of the transformation

How EY can Help

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With the role of the treasury function evolving, EY can help you to have the right tools in place, and to improve risk management, hedging, and derivatives and commodity trading.

Unification, integration, automation — these are the pillars of Delivery Hero's treasury function transformation. The approach was to unify existing systems and data landscapes in an overarching design and take advantage of all the possibilities that technology offers.

"With growth rates of approximately 100%, we always have to ask ourselves whether we are responding to economic growth with additional headcount or by investments in technology to keep up pace and momentum," says Seda Kavaklipinar, Senior Manager Finance Systems Delivery Hero. "In the case of our treasury function, we wanted to implement this comprehensive digitalization strategy directly, in as many process areas as possible," adds Gerald Taylor, Senior Manager Treasury at Delivery Hero.

To achieve this, Delivery Hero first had to create a strong foundation. "The success of any treasury project ultimately depends on the capabilities of the banking partners and the variety of banks and accounts to be integrated," says Schmahl.

To lay the right foundation, Delivery Hero's treasury department developed a global banking strategy in 2018. As a result, the previously highly diversified banking landscape was consolidated into five core banks. These could then be integrated into a new payment infrastructure.

Based on an existing SAP S/4HANA oneERP system, the EY team, the finance systems and treasury departments helped to implement the entire spectrum of treasury applications from SAP step by step. "The core requirements were cash management, risk management, payment automation, liquidity planning and treasury analytics. So, a wide range of treasury applications from SAP were included," says Kavaklipinar.

The recipe for success: Openness to innovation

Delivery Hero successfully introduced the latest innovation of SAP Analytics Cloud (SAC) for treasury. This makes it possible to record payment flows worldwide and plan analytically. As a result, both transparency and centralization have increased.

"In principle, this has paved the way for the provision of cash management dashboards with real-time data. The management board can use this to make faster, better decisions in a dynamic and competitive food environment, far beyond increasing compliance," explains Schmidt.

One system. Constant extensions

Today, the entire system is based on a hybrid solution consisting of SAP S/4HANA and SAP Analytics Cloud. Further adjustments to this system structure are currently being introduced. For example, with foreign exchange management, Delivery Hero is in the process of tying incoming 360T foreign exchange trading transactions to SAP S/4HANA using SAP trading platform integration. The use of bi-directional communication to transfer trading requests to 360T is also in progress. In this way, the entire action cycle can be processed automatically, at an early stage. In addition, existing requirements for speed, efficiency and compliance are fully met, and manual transmission errors are avoided.

System-based transparency and security aspects were particularly important in the overall structure because enabled compliance standards to be scalable throughout continuous acquisitions and expanding business activities.

Communication with banks, payments to restaurants, monitoring of cash flows: Delivery Hero wanted the complete package

In addition to compliance, the most important functional element of the treasury solution developed for Delivery Hero was the automation of processes to banks and restaurants. The challenge here was to create standardizations to avoid manual effort later on, when processing payments.

"Given the huge payment transaction volumes and the number of different countries, we have achieved a high level of automation and standardization. We have also filled existing functional gaps in the relocation of payments from bank portals to SAP-based advanced payment management and bank communication management solutions used by Delivery Hero. These are good examples of continuous improvements that Delivery Hero and our partners are working on,” says Boully.

"We have managed to map out the entire cash cycle in the SAP S/4HANA system and thus make use of the latest automation standards," adds Schmidt.

The better the world works

Setting the pace instead of keeping pace - even during a pandemic

Continuous co-innovation between SAP, EY and Delivery Hero created a unique solution that is continuously evolving.

Even after many months of cooperation, there is still plenty of innovative energy in the collaboration between Delivery Hero, SAP and EY. The latest SAP solutions are tested in current pilot projects and continuously improved. In so doing, they create additional value for other SAP customers. Delivery Hero is also considering cloud-based solutions so different functions can benefit quickly from new releases.

"No one in the sector has seen such a complete and innovative payment platform. When it comes to treasury, Delivery Hero is simply setting standards. We are proud Emmanuel Thomassin, Delivery Hero’s Chief Financial Officer (CFO), and his team have entrusted us with this forward-looking and innovative task," says Schmidt.

The project shows how technology can be the lever to transform treasury into a strategic-analytical consulting aspect of the CFO’s role, while creating significant benefits for the operational business.

"Even in uncertain times during the COVID-19 pandemic, we were able to implement modern and scalable solutions through the use of EY and SAP, which increase transparency and security for us. At the same time, we were able to take the efficiency of our cash forecasting as well as the liquidity management, which is so important in the crisis, to a new level. In this way, we don’t just keep up, but also determine, ourselves, the pace in our market,” says Christian Schmahl, Treasury Director at Delivery Hero.

Emmanuel Thomassin, CFO of Delivery Hero, agrees: "I am very grateful for the great commitment and results of the joint team from Delivery Hero, EY and SAP. In our business, intelligent, scalable solutions are a competitive factor against which we, as a globally active company, are ideally positioned."

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Intermediate Level. Library of 7 Courses Dynamic, Interactive e-learning Familiarity with basic financial concepts For online purchase, visit   How Treasury Prime Got BaaS Right Case studies. Future of Banking: Bangor Savings Bank Future of Banking: Emprise Bank Fintech Focus: Mayfair Fintech Focus: Sydecar Fintech Focus: Zeta Future of Banking: Grasshopper Bank Fintech Focus: Apollo Fintech Focus: MaxMyInterest Fintech Focus: Fortress Trust Company Treasury prime in the news, treasury prime expands bank network through partnership with omb bank, treasury prime accelerates embedded banking with new bank-direct initiatives, high circle partners with firstbank and treasury prime to launch new suite of high-yield commercial checking accounts for high net-worth individuals and businesses, ready to get started. Helen Sanders Cash Management in a Credit Crisis: A Case Study A case study By helen sanders, editor. Every treasurer has been forced to review how they manage their cash and liquidity since the crisis first struck. In this case study, we use a real-life example of a global insurance company and explore how treasury has dealt with the changing marketplace. Cash management background As an insurance company, the firm has substantial operational cash flow together with fiduciary money owed to insurance carriers. With such high cash balances managed by the company but owed to third parties, the financial and reputational risk of counterparty default is huge. Cash management and short-term investment is a priority for treasury, and principle preservation is the primary investment objective. With many of the banks experiencing a downgrade in credit rating, treasury is increasingly finding that it needs to spread its bank exposure risk. This is easy to do for short-term investment activity such as deposits, but it becomes more difficult when it comes to cash management. Corporates need to make decisions about the banks they want to work with based on those that are most likely to be around in the future. Like many other firms, the company has needed to focus carefully on where to place the company’s cash. Even in situations when a national government has stepped in to support a bank, and not every bank can be bailed out, it could easily take three to four months to retrieve the cash, creating potentially serious liquidity problems, FX risk and a loss of return over this period. A company in this position may have to borrow to cover the liquidity gap or lose out on business investment opportunities. Short-term investments Treasury has considered government securities as investment vehicles; however, these are typically only issued in three currencies which normally create the fewest difficulties. It uses money market funds (MMFs) in Latin America, Europe and the United States. It is important to be familiar with the investment portfolio in each fund, so treasury receives regular updates on fund assets and reviews both individual holdings and asset classes to ensure that there is nothing of concern and that decisions comply with internal investment policies. Sign up for free to read the full article Already have an account? Download our Free Treasury App for mobile and tablet to read articles – no log in required. Latest from our Treasury Leaders Europe’s New Trading Partners: Managing FX Risks and Shifts in 2024 Exposure Meter Treasury and E-invoicing Music to a Treasurer’s Ears One Step at a Time as Central Banks Plot Reduction of Restrictive Rates Both Sides of the Digital Coin The ABC of CBDCs Castrol Collaborates on Industry-First Insurance for Asian Bikers Latest articles, ancient and ultra-modern . Discover how close commercial ties in the Middle East and Africa are propelling both regions into a new era of trade. 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With the evolution towards borderless business, effective treasury management that takes advantage of enhanced digital capabilities is imperative for new economy companies to address their growth prospects, explains Deutsche Bank’s Kriti Jain It’s not exactly a new term since it’s been mentioned since 1990s when referring to the internet, but new economy is the buzzword right now. The new economy sector comprises of new high-growth industries that are on the cutting edge of technology and digital connectivity, which is a significant driving force of economic growth and productivity today. It demonstrates a new way of doing business with the emergence of new and exciting sub-sectors, such as fintechs and digital assets. It also paves the way for the emergence of shared economy, streaming economy, gig economy and blockchains coming through mobile web services, which are radically changing the business landscape. “The new economy players are reshaping the nature of work, including how we work, as well as breaking boundaries,” says Kriti Jain, Asia-Pacific head of new economy, fintechs and platforms, corporate cash management, at Deutsche Bank. Indeed, the new economy sector underpins a fundamental shift in the global economy. “New economy is actually becoming a key driver today and it has actually outpaced the growth of the rest of the global GDP by 2.5x during the past 15 years,” adds Jain. “Some of the new economy players are becoming much larger than the traditional manufacturing companies. It kind of redesigned the capitalist system around more environmental and social goals.” One of the key trends defining the new economy sector is the emergence of borderless commerce. Businesses are recognising that they need to be where their customers are, which is pretty much digital anywhere around the world. Another trend is the creation of the ecosystem, with partnerships between various players, such as technology providers and cloud computing blockchains. “We are seeing cloud customer service solutions happening as companies scale up and quickly deliver optimally to their customers. We also noted last-mile logistics fulfilment companies and financial institutions coming together to enable this rapid growth.” “Treasury teams are now shifting from just being cost centres to be strategic partners and enterprise-wide collaborators” Kriti Jain, Asia-Pacific Head of New Economy, Fintechs and Platforms, Corporate Cash Management, Deutsche Bank The objective is all about providing a full digital experience and a full digital value chain. Says Jain: “The customers are increasingly demanding a digitally-enabled experience, which has come up a lot more in the post-Covid-19 environment when everything is done online and through the e-commerce platform. We are seeing a lot of digital interaction between suppliers, and manufacturing and service companies. The key requirement is real-time communication with customers, integration to real-time information, and end-to-end systems on transactions and reconciliation which are enabling this business model.” So how is treasury imperative in the new economy? As Jain points out, treasury is playing a key role in supporting the growth of the new economy sector. “The treasury teams are now shifting from just being cost centres to be strategic partners and enterprise-wide collaborators,” she notes. “They are providing input into their strategy and ensuring the growth is sustainable and financially-efficient, which is key because the growth prospects are 10 times than what a traditional company would see. It is important that whatever you do in your treasury systems, or how you design your treasury workflows, because they’re in such close contact with the customer, you have to ensure an end-to-end transaction flow. And while the systems as well as the region are complex, what the customers need is a simple digital workflow. That’s where treasury comes into play.” In terms of managing their treasury flow, the new economy companies face a lot of issues and challenges, which are mostly related to globalisation. “When everything is moving towards global digitisation and being borderless,” Jain says, “the customer expectations and behaviours are varied in different countries and in different markets”. Navigating regulatory environment So how do businesses, while trying to be global and standardised, meet these different expectations and behaviours in different markets? Certain markets in Asia, such as Vietnam and Indonesia, for instance, are still pretty much cash-oriented, whereas markets such as Singapore and Hong Kong are completely digital and moving towards a cashless society. At the same time, the regulatory environment and the payments infrastructure are very diverse in Asia. Jain explains, “The regulatory and political landscape in Asia is very different and in the face of globalisation, it is also facing a lot of diversifications. We see a lot of cross-currency controls being put in place. So, when we talk about cross-border transactions being seamless, how do you manage that in a situation where there are local currency restrictions in different markets and the instant payment systems are all domestic in nature? These are some of the big challenges that new economy players in the region are facing.” Indeed, diversification, according to Jain, is the key challenge for new economy companies when navigating the regulatory environment. “We have different jurisdictions in Asia that have different agendas,” she says. “And there are multiple regulators in each jurisdiction that have different sets of rules when it comes to managing payments, whether it’s for e-payments, payment service providers, or even for securities.” “Banks know how to seamlessly integrate the various accounts across various jurisdictions, how to manage liquidity or how to inject liquidity into the system” The regulatory environment adds a layer of complexity for business as new economy companies scale up beyond their home market. “It is important to understand how to comply with the requirements so that you can effectively expand in new markets,” Jain adds. “It also underpins how do you effectively manage your cash management and liquidity.” Some of the key areas the new economy companies face in different jurisdictions are the barriers to enter the markets: The incorporation of the business; The stringent controls in doing business; The different taxes that are being applied; Whether it has to be a resident account structure or a non-resident account structure; and What are the activities that are restricted whether it’s offshore and onshore. Understanding all these nuisances on regulatory landscape and regimes is important,” she reflects. New economy players are also facing issues relating to foreign exchange as they scale up their businesses regionally and even globally to capture opportunities. “The ability to pay and collect cross-border seamlessly and at scale to manage the related cross-currency and liquidity risks, while catering to local markets, are the other challenges the new economy players are facing,” notes Jain. With the evolution towards borderless businesses, Jain calls for the new economy treasurers to deepen their collaboration with their service providers in order to navigate the different payment and collection systems as well as market infrastructure in various countries. “The banks are knowledge warehouses,” she points out. “They know how to seamlessly integrate the various accounts across various jurisdictions, how to manage liquidity or how to inject liquidity into the system. The new real-time connectivity also helps when leveraging on open banking framework, with the API (application programming interface) connectivity. Having a strong banking ecosystem gives the treasurers access to all of these options. It helps them reduce costs, increase the operational efficiency and the time to market.” This article was first published in The Asset 16 January 2023 here , together with two explanatory videos from Kriti Jain, Asia-Pacific Head of New Economy, Fintechs and Platforms, Corporate Cash Management, Deutsche Bank providing further insights around treasury management in the new economy Watch videos You can watch Kriti Jain explaining more about the importance of treasury in the new economy in the following two videos How important is treasury management in the new economy? How is treasury imperative in the new economy? Asia-Pacific Head of New Economy, Fintechs and Platforms, Corporate Cash Management, Deutsche Bank Cash management solutions Explore more Find out more about our Cash management solutions Stay up-to-date with Sign-up flow newsbites. Choose your preferred banking topics and we will send you updated emails based on your selection Subscribe Subscribe to our magazine flow magazine is published twice per year and can be read online and delivered to your door in print YOU MIGHT BE INTERESTED IN CASH MANAGEMENT, TECHNOLOGY From open banking to open finance from open banking to open finance. 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Treasury management in the new economy With the evolution towards borderless business, effective treasury management that takes advantage of enhanced digital capabilities is imperative for new economy companies to address their growth prospects, explains Deutsche Bank's Kriti Jain. It's not exactly a new term since it's been mentioned since 1990s when referring to the internet ... assignment essay homework paper phd report resume review thesis