Wrapping Treasurers’ Heads Around A Real-Time Ecosystem

The world is moving faster, and corporate treasurers want in on the acceleration.

Finance leaders are seeking technology and services that can give them insights on demand so they can execute operations like reporting and payments more quickly, too.

Data remains at the heart of these capabilities, and thanks to open banking, financial institutions (FIs) are embracing the opportunities that can be found in unlocking the data they hold. But how to move that data into the enterprise, and what to do with it when it gets there, remain unanswered questions for many corporate treasurers — or, at least, the answers they find are still evolving.

FinLync Chief Technology Officer Peter Klein said data has always presented challenges for treasurers.

“What’s really plagued treasury teams for decades is the data, and the integration of data, sitting at their banks and how they marry that with this ocean of data they have in their core systems,” he told PYMNTS in an interview.

To achieve that integration, and to gain the most value out of that data once it is unlocked, the ecosystem must embrace a mindset shift, he said.

Unlocking Real-Time Data

There are plenty of ways of unlocking data that sits within bank systems and integrating it into corporate treasury platforms like enterprise resource planning (ERP) systems. For years, this method has involved treasurers simply waiting for their banks to send statements in the mail, or via email, and manually entering that information.

But with B2B payments embracing real-time functionality, and with treasurers needing to keep pace with accelerating operations, these finance leaders are no longer willing to wait for weekly or monthly insights that are not seamlessly added into their systems.

Open banking has been able to facilitate real-time data connectivity between banks and ERPs, but it has required a mindset shift in the corporate banking space.

“There is the mindset that it’s the bank’s data and not their data,” said Klein.

Yet as open banking proliferates, banks and treasurers alike have embraced the concept that data that sits within the banks are owned by the treasury clients themselves.

The question then turns to how to actually facilitate the movement of that data.

“I think it’s the responsibility of the treasurer to get their data from their banks,” Klein noted. “However, the challenge is in the technology. The technology has made that very challenging to do, so there’s a lot of reliance on the bank.”

Open banking has also driven adoption of application programming interfaces (APIs), and for FinLync itself, also encouraged a mindset shift. While the company had initially invested in blockchain infrastructure to move data, the market has shifted in a way that recognizes the power of APIs to more efficiently migrate information into back-office systems. What’s more, APIs can do so instantly, supporting treasurers’ need for real-time visibility into their finances.

Rethinking Operations

As the corporate financial services world navigates the logistics of how to support treasurers’ need for real-time data, those finance professionals are also engaging in their own internal debates about what to do with the power to access insights in real time.

On one hand, a treasurer may not need to obtain insights and analytics in a non-stop cycle of instant automation. After all, what use is a financial report if access to real-time data will mean that the insights on that report change from moment-to-moment?

But as Klein noted, it’s not merely a valuable advancement for the purposes of reporting. Real-time data integration empowers treasurers to participate in an economy that is moving faster in other ways, too.

“Real-time payment networks are now ubiquitous around the globe,” he said. “This means that your multinational corporation is getting paid in real time. But how do you get visibility on that in real time to know where you have cash and where to attract cash?”

API data connectivity provides visibility into insights about when and where companies have been paid, allowing treasurers to make more agile investment decisions in everything from customer credit to shipping and logistics. It also supports real-time reconciliation and, thanks to the ability to consolidate data, can unlock insights not just for the treasurer, but for the enterprise at large.

Klein said he is confident that a real-time payments ecosystem will “revolutionize working capital” for corporates. But it won’t occur all at once.

There are the logistical challenges of ensuring payments, banking and treasury infrastructure can facilitate real-time operations and data integrations. But at the broader level, there is also the mental challenge of wrapping treasurers’ heads around concepts like real-time liquidity management, faster investment decision making and on-demand analytics.

Historically, treasurers have not had such capabilities despite advancements in technology. And according to Klein, it’s something that will take a bit of time getting used to.

“It’s such a mindset shift,” he said. “One of the biggest challenges is just the appreciation that this is happening. The treasurer is highly skeptical of solutions they’ve adopted in the past that haven’t always given them what has been promised. But if it works, and it provides them this value, we’ll see a massive acceleration in adoption.”