Corporates may not be adopting faster and real-time payments technologies as fast as consumers, but that doesn't mean the acceleration of payments isn’t impacting corporate finance.
In a new report released from Deutsche Bank’s Global Transaction Banking unit, analysts noted that faster payments are shifting treasurers to embrace real-time processes. One of the areas ready for real-time disruption is foreign exchange (FX) management, which is “the road to real-time treasury,” according to the report.
Real-time payment capabilities enable businesses to take advantage of faster currency conversions and real-time FX rate management. Citing data from Euromoney, Deutsche Bank noted that about two-thirds of executives report being interested in adopting automated, 24/7 currency conversions based on real-time FX rates.
For the corporate treasurer, this could mean real-time FX exposure management and the need for faster action to mitigate FX volatility risk.
But FX management isn’t the only area of corporate treasury seeing positive disruption from faster payments. Deutsche Bank’s report also pointed to liquidity management, investment, and cash application as some of the processes that benefit from faster payments and access to transaction data in real-time.
Research from NACHA - The Electronic Payments Association found that only 6 percent of the nearly 2 million same-day ACH transactions made in the first 11 days of the service were B2B transactions. But Deutsche Bank’s report suggests corporates are headed towards real-time payments disruption — even if they don't deploy real-time payments for their accounts payable operations.
“As instant payment schemes continue to roll out across the world, this not only impacts B2C companies, but also has a knock-on effect on the full value chain of globally connected corporates,” said Deutsche Bank’s global head of cash products and cash management, Shahrokh Moinian.