Apparently, 80% of Americans are in favour of working with “futuristic” payments technology. This means they are comfortable working with digital currencies, fingerprint scanning, facial recognition technology etc.; they can envision the benefits in the form of enhanced security, speed, and ease of use that these new technology bring to the table.
If the average man on the street is willing to embrace a frictionless payments future, why should there remain resistance in the business-to-business (B2B) sphere.
As technology becomes more ubiquitous, user-friendly and scalable, businesses can leverage on this opportunity to grow. For example, API technology has an important role to play in this story. And for some banks, like DBS, the journey is well underway.
In general terms, APIs, or application programme interfaces, are a set of clearly defined ways to communicate between at least two separate pieces of software. Banks typically use APIs to connect bank data and services to other applications and infrastructures to enable the delivery of digital solutions with faster fulfilment to the end customers. API solutions can also improve the efficiency of processes. For example, those within the corporate treasury value chain by connecting with banks.
The use of APIs allows financial institutions and corporates to be more nimble in adjusting to change, market demands and new business models. This is clearly of benefit to the client, and it also places the bank in a position to proactively respond to change.
"APIs enable banks to create dynamic new solutions for its clients in a manner that’s fast and cost-effective. Besides enabling the agility in the development of new solutions, APIs also equip banks with the ability to integrate itself into the customer’s business operating model, delivering bespoke solutions that drive the client’s digital agenda."
Raof Latiff, head of digital, Institutional Banking Group, DBS
Grab the opportunity Take the Singapore-headquartered Grab as an example. The technology company offers a range of ride-hailing and logistics services to its client. It has more than 1 million drivers registered in the network and its application is downloaded onto more than 60 million mobile devices across Southeast Asia2.
At the front end, Grab’s technology leads the track. While the company makes a concerted effort to accept cash payments – cash is still ‘king’ in the region –it offers credit card payments and electronic receipts for those who wish to go cashless. Selecting the GrabPay service enables clients to make payments via their preferred card on the Grab application.
While Grab is providing a positive digital experience to its passengers, Grab’s drivers were not able to get paid with the same level of expediency for cashless payments (i.e. credit and debit card transactions). The payment mode that supports the ‘cash out’ of funds into Grab drivers’ bank accounts is not instantaneous, and the earliest payout is usually the next business day at best.
To address this, Grab has partnered with DBS through Transfer-To to allow Grab drivers to instantly cash out the funds in their Grab wallet into their DBS or POSB bank accounts. Through the consumption of DBS’ API solution, also known as DBS IDEAL RAPID, drivers can get settlement for daily earnings in real-time, receiving funds into their bank accounts in a matter of seconds.
Furthermore, DBS IDEAL RAPID also enabled Grab to roll out an instant Cash OUT to its drivers, where all drivers with DBS or POSB accounts can instantly transfer fares collected via GrabPay into their bank accounts.
Efficiencies made in internal areas like these, enabled by APIs, can reap enormous savings. This solution also encourages the adoption of cashless transactions by drivers, improving its back-office efficiency.
Lead with digital
But for a true partnership to work in this era of digital transformation, it requires embracing change and adopting an agile approach to delivery. Not all companies have digital visionaries leading the charge, but that doesn’t mean companies cannot instill fresh thinking into the business.
This is especially true at times when many established companies are struggling to remain competitive, or getting disrupted by new digital players. A key to this is understanding that a digital strategy no longer should play a supporting role for business strategy but lead and influence other aspects of the business. It is worth looking to set your own targets for your corporate finance and treasury function to become a digital-first business.
"Emerging technology and the need for digitisation will continue to drive changes in the way businesses operate and how banks and corporates engage. APIs provide an essential means for the creation of innovative and client-centric digital solutions through its ability to plug into data and other applications. It also facilitates a more effective reach into the client’s broader ecosystem, offering instant fulfilment, improving productivity and returns. "
Raof Latiff, DBS
 Based on research conducted by PYMNTS.com
2 Source: Grab
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