Future of Payments: Creating a digital roadmap in Asia
With digital transformation now at the top of the agenda for corporates worldwide, treasury teams must find viable – and reliable – payment solutions that support this ambition.
Innovation is inevitably a core element of this, but so too is the customer journey as well as the mind-set shift required to deliver on the desire for enhanced speed, flexibility and convenience.
These will also address the needs of corporate treasurers in response to the five drivers of Asia’s burgeoning payments landscape that were highlighted in the first article in this series. (Read more here)
“As the payments industry continues to evolve, the focus is to create new solutions and services that can help clients become more efficient and relevant to a broadening set of stakeholders,” said Dhiraj Bajaj, head of Asia Pacific FI and NBFI sales, Global Transaction Services, Bank of America.
Four components of future payments solutions
1. Using new technologies
As the transition to the real-time economy accelerates, companies are seeking faster, easier ways to work. Whether it’s AI or machine learning, the evolution of technology continues to play a pivotal role in the creation of a more intelligent treasury.
“Companies want to manage their payment investigations more efficiently with greater transparency in fees,” explained Bajaj.
However, the suitability of a solution will depend on certain country corridors that utilise technology to enable cross-border payments in smaller amounts at any time of day or night.
This is also where blockchain – another key emerging piece of technology in the payment space – can bring greater visibility and enhancements to the payments landscape. “This offers an alternate route for companies in different sectors to initiate payments into other markets. There is comfort from the currency conversation being done at the point of origination, with account validation and verification done within a matter of seconds,” added Bajaj.
To date, the challenges have been three-fold: first, ensuring execution that offers the required IT security; second, integrating blockchain with legacy core banking systems and platforms without any loss in efficiency; and third, commercialising the solution to ensure it is available in a widespread way.
Resolving these would give treasurers the speed, visibility and lower costs they want. “Cross-border transfers involve a combination of fees and the currency conversion, so treasurers would benefit from knowing exactly how much they are paying for a transfer at the point of origination,” said Bajaj.
One way Bank of America has used technology to improve payment efficiency is when the bank rolled out transaction tracking via SWIFT GPI on the CashPro platform. The platform, which provides digital banking access and support via desktop, mobile app and Application Programming Interfaces (API), now provides clients with the ability to track cross-border payments and access information quickly. The bank has also been investing further in APIs and clients can now have rate and payment status information in real time, and conveniently trade and settle cross-currency payments in over 140+ currencies.
2. Applying a retail lens
It is notable that advances in the corporate payments landscape are increasingly a reflection of innovations – such as mobile wallets and payment apps, among others – which have already been developed and rolled out in the retail banking landscape.
This is leading treasurers to apply a consumer lens to their corporate role; they now see what can be achieved in terms of real-time payments as part of their personal banking, so are pushing their providers to do the same for their treasury needs.
This is again fuelled by a desire among corporates to pay customers and suppliers more quickly and digitally.
“The e-commerce revolution is creating a surge in demand for more companies to manage an increasing number of payment interactions, including cross-border ones,” said Clara Wang, head of corporate payment, cross-currency and card, Global Transaction Services, Bank of America.
In response, the bank recently launched Pay to Card as a new payment solution to its suite of business-to-consumer (B2C) payment capabilities.
This allows corporates to pay consumers digitally by depositing funds directly into an individual’s or small business bank account in around 170 countries in more than 120 currencies. It therefore reduces manual processes and increases speed. “Pay to Card could bring substantial efficiencies and consistencies to clients to manage payment with enhanced digitalisation and greater security, while improving their own customers’ experience,” Wang added.
Learning from their personal banking experience, more customers are also adopting mobile banking for their corporate banking needs. This is also a key focus area for Bank of America and recent enhancements to its CashPro App have made it much more useful for corporates, with mobile logins up 77% and payment approvals rising to $184 billion.
3. Optimising the user experience
Another key aspect of suitable payment solutions is ensuring they provide an effective user experience.
This is increasingly important; as the variety and number of payment options continue to grow, treasurers have identified a growing need to centralise the process. Their ultimate aim is to have greater control of the payments processes, plus achieve automated, secure and streamlined trading and settlement processes.
“At Bank of America, we employ nearly 100,000 technology associates and are deploying AI across numerous products with a focus on improving our clients’ experiences,” explained Serina Hourican, head of commercial sales for Asia Pacific, Global Transaction Services, Bank of America.
This creates opportunities for dashboards and other routes to foster more interaction. It also taps into the value of account reconciliation data, enabling treasurers to more readily identify which accounts are the most valuable, pay on time and have the largest volume.
Leveraging new technologies like AI and machine learning to reduce manual intervention and presenting the right information at the right time to enhance the user experience is a key way that Bank of America looks to enhance its offerings.
Case study: PTTEP takes virtual approach to rationalising accounts
To keep pace with its growth and be a pioneer in innovation in Thailand, PTT Exploration and Production Public Company Limited (PTTEP)'s treasury team turned its attention to rationalising the back-end systems by adopting new solutions and technology. The goals included an alternative to reconciling accounts manually, further automation and digitisation of workflows, and greater visibility over account balances and overall liquidity.
Turning to Bank of America, PTTEP was able to devise a multi-pronged solution:
4. Creating agility in approach and mind-set
Given the acceleration of digitalisation due to Covid-19, being nimble and looking to leverage technology that is bank-agnostic is key for corporates when assessing and implementing new payments solutions.
The starting point is to differentiate which options add value to the needs of the treasury function compared with what is simply “noise”.
“Treasurers need to be clear about prioritising their objectives and the problem that needs to be solved,” explained Hourican. “They will then be able to determine which right solution actually adds value.”
The next step is being able to practically implement the solution in line with current legacy technology systems.
At the same time, a successful integration relies on transforming culture. While it is unrealistic to try to get full alignment internally, the focus should be on getting buy-in from senior management.
Putting new solutions into practice
Ultimately, for treasuries to identify and implement new payments solutions, they must prioritise business and technology resources.
Yet commitment to a solution is only the first stage; treasurers must ensure their system can continue to operate efficiently at the same time as they are implementing changes that create potential for disruption.
“We know that clients will continue to expect a digital experience that is convenient, secure and fast,” explained Bajaj. “We have witnessed this clearly through the usage of mobile, eSignature and APIs, and continued effort to broaden the platform during the year under review to offer our clients intelligent solutions that are flexible, efficient and secure.”
How can Bank of America help make your business easier, smarter and more secure? Watch this video to learn more.
For more information, please visit Bank of America Global Transaction Services