Fraud Threats Underscore Importance of Real-Time Cash Flow Visibility for CFOs

More businesses have been exposed to payment fraud and cybercrime in the wake of the pandemic, and as a result, ensuring end-to-end visibility of cash flows, bank account transactions and payments has never been more important for today’s treasury and finance professionals.

According to Jukka Sallinen, CEO at Finnish corporate payment provider Nomentia, the fact that risks originate from both internal and external sources further complicates the visibility challenge for chief financial officers (CFOs) tasked with minimizing the potential of financial crime.

“There are studies showing that even half of fraud cases could be internal, and then, of course, we have to count mistakes — that happens as well,” Sallinen told PYMNTS in an interview.

To fight back, he said CFOs can mitigate these growing security risks by harmonizing payments through a single banking channel — a significant hole in today’s finance systems that many companies are looking to plug.

Read more: 59% of CFOs are Focused on Payments Digitization

“There’s still a huge market for centralized payment solutions [and] many companies are looking for modern, cloud-based ERP [enterprise resource planning] systems. And as more companies are more inclined to introduce new services provided by the banks, we see a growing need for secure payment solutions,” he said, adding that setting the appropriate approval payment limits will also give finance professionals better control over the process.

See also: Going Digital is ‘Harder than Checks’ But Essential for CFOs

The Finnish business-to-business (B2B) enterprise payment platform even goes a step further.

“On top of that, we then introduce algorithms and different kinds of controls that can automatically recognize different kinds of suspicious transactions like double invoicing or an unusual number of payments to a particular creditor,” Sallinen explained.

Best-of-Breed Solution

Earlier this month, the European treasury and cash management provider, which has expanded beyond the Nordics to the Netherlands, Benelux and the DACH area — Germany, Austria and Switzerland — announced that the value of global transactions on its payments platforms had passed €1 trillion ($1.05 trillion) in the past year.

The Helsinki-based firm noted the rapid digitalization of treasury and finance functions and the growing demand for centralized payment solutions triggered by the pandemic as key factors that contributed to hitting this record milestone.

The fact that they have avoided being a jack-of-all-trades and instead focused on their core strengths within the broader finance and treasury management domain — payments, account reconciliation, cash forecasting and visibility — has also contributed to their success, Sallinen remarked, earning them the trust of 2,000-plus clients in over 80 countries around the world.

“We don’t want to be everything to everyone, or even try to [dabble in everything] and end up being average [in those areas],” he said. “Our focus is on those things that we do best and where we can add value to the customer process. [That’s why we] define ourselves as a best-of-breed solution.”

Related news: Medius Extends Global Payment Capabilities With Nomentia Partnership

Also this month, the B2B payment processor, which offers integrations with over 10,000 banks globally, announced a partnership with Medius, an invoice automation and spend management solution provider, to simplify accounts payable (AP) and payment processes for its clients and further strengthen its Nordic market presence.

Moving forward, Sallinen said building better cash forecasting models with predictive analytics and machine learning is a key trend that will continue to gain traction in the corporate world. However, he cautioned companies and CFOs to adequately prepare before rushing to adopt these sophisticated, complex solutions.

“That’s something that companies are going to ask more of [but they need to be patient]. You cannot go into predictive analytics if you haven’t taken care of the basics first like basic liquidity management and basic short-term forecasting,” he said. “But we see that [demand] for it is definitely booming.”

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