Citi: Faster Payments Help Treasurers Extract ‘Last Drop’ of Liquidity From Financial Ecosystems

Corporate treasurers once were relegated to the back office, manipulating spreadsheets, preparing audits, handing printed reports off to more senior management — the folks charting the company’s course ahead.

But as Ambrish Bansal, global head of Liquidity and Cash Concentration Products, for the Citi Treasury and Trade Solutions business, told PYMNTS’ Karen Webster, the role of the treasury department is changing at a rapid speed.

Now, the treasurers are tasked with navigating through choppy seas of interest rate volatility and geopolitical uncertainty. The cost of inefficient cash management escalates in such an environment, where every dollar counts, and transparency into where money is, where it’s headed and what’s coming into the coffers is determinative of whether companies thrive, or even survive.

Armed with the right data, which gets delivered, analyzed and acted upon across departments, treasurers can help explore the regulatory, tax and other nuances of worldwide developments in ways that help their firms meet their business objectives over time.

Squeezing the Juice

The advent of instant payments and the always-on connected economy, he said, can help extract the most value from financial interactions, to move cash flow forecasting from a simple “point in time” exercise to a fluid, real-time endeavor.

In turn, he said, the same speed and surety of modern, instant payment systems can improve the customer payment experience of their own end users. A benchmark to how companies are evaluated, he said, can be found in what he termed the “customer friendliness” of those transactions.

But the demands of faster payments — and a shift in underlying infrastructure — means that businesses must adapt by integrating advanced payment processing systems and employing real-time cash flow monitoring systems in place to make those treasury functions more dynamic.

“Many treasurers are thinking, ‘Well, how can I extract that last ounce of juice from my financial ecosystem?’” Bansal said.

To get there, he said, treasurers are eyeing the use of cloud-based technologies and APIs to ingest information and speed transactions so they can balance their exposure to various currencies, if they are operating internationally, and centralize their cash operations as efficiently as possible.

Necessary Shifts

Embracing faster payments and fostering treasury’s role as strategic adviser, Bansal said, demand a multipronged “combination of technology readiness, process readiness — and a cultural readiness too.”

That means making sure that treasury workstations and ERPs are upgraded to ingest data at the speed of what businesses want (technology), managing liquidity on a 24/7 basis (process) and understanding/adapting to the pace of change in an enterprise’s chosen competitive landscape (that’s the cultural aspect).

If those aspects are managed well (and managed simultaneously), cash becomes more accessible, productivity improves and entire industries — particularly in B2B — evolve.

Security also is on the agenda, and banks have an important role to play in developing new protocols tied to their cloud-based systems.

Providers such as Citi, Bansal said, with APIs and treasury management solutions, are well positioned to act as a “global network bank” that helps clients adapt to the connected economy.

“We are creating a hyper-efficient network by bringing in technology, by bringing in innovation and building on top of an already solid foundation through our geographic presence,” he said.

With those partnerships in place, Bansal noted, Citigroup’s clients are “able to extract efficiencies and do more with less.”

We’re in an environment where treasurers can fund payments anywhere from a central pool of liquidity, minimizing risk along a given “last mile” of transactions — no matter if that payment is happening in Australia, Hong Kong, Singapore or Mexico with Citi’s network and cross-border, cross-currency pooling solutions.

Looking ahead, Bansal said, the mindset of treasurers is generally “positive” as they examine what the “treasury of the future” looks like with the potential to leverage Citi’s blockchain, cloud and API solutions.

“I see the role of treasury becoming more central to [the enterprise’s] business strategy, to the growth strategy, to the expansion strategy — and quite frankly, to the sustainability strategy. The treasury team plays a pivotal role,” he told Webster.