With the market dynamics evolving, corporate aspirations expanding, mass adoption of technological advancements and regulatory changes shows that cash management business is about to see some transformation in the near future
FREMONT, CA: Cash management (CM) helps treasurers to maximize liquidity and enhance settlement efficiencies by optimal use of cash, at the right place and time. And this is an essential service that the banks offer to their corporate clients.
As corporates look to necessary institutions to provide innovative support and solutions, the banks must invest in building out more sophisticated offerings. Most banks have defined and identified their CM value propositions and have designed a transparent business model for growth. They should also identify major lending clients that would be most receptive for cross-selling CM businesses.
[vendor_logo_first]Improved Connectivity:
Along with international trading networks, corporate banks face the challenges of connectivity as well. Integration should involve not just linking up to their banks’ proprietary systems, but external enterprise financial tools offering CM functionalities which is a complex undertaking. Therefore, banks need to lay the basis of industrial-strength connectivity and consider open source technology to allow more accessible linkage between their information systems and other ERP systems.
Embed CM via “as-a-Services” Tools:
Corporates want to integrate multiple bank-provided products into their enterprise resource planning (ERP) systems to optimize risk management and efficiencies. Banks and software vendors should deliver “as-a-Service” solutions with bite-size banking functionalities connected via open application programming interfaces (APIs) into corporates’ core tools.
Corporates are gradually outsourcing their working capital management to their banks, and migrating to an ecosystem of web-based CM solutions will streamline the connections of these services and increase agility, flexibility and overall effectiveness of enterprise innovation. This necessitates the redesigning of the existing bank systems investments and reviewing issues such as user entitlements and IT security.
Expand Networks:
Clients want more advanced treasury capabilities and might not hesitate to engage in new payment providers and technology platforms that offer competitive solutions. The CM space is no longer the domain of traditional banks; corporate banks, therefore, need to seek collaborations with non-banks and expand a broader range of value-added services to improve client-serving capabilities.
Utilize Real-time Analytics to Offer Insights:
Treasures want real-time visibility on their financial exposures to improve liquidity, cash forecasting and manage funds across multiple geographies and legal entities. For their banks to provide precise real-time analytics, generate strategic insights and offer dynamic CM ideas, they need to fully integrate into the corporates’ CM businesses, so that they can move towards the value chain from assisting transactions to becoming trusted corporate treasury advisors.
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