Revealed: Three fintech solutions to ease your cash management pain

The fintech world is an exciting, but daunting place for time-poor treasurers.

The sheer rise in new specialist products available is both a boon and a challenge: a boon, because today’s solutions can streamline processes, making the corporate treasurer role more efficient and strategic; and a challenge because of the sheer number of options available.

So, how do time-poor corporate treasurers go about selecting the right ones for their cash management needs?

As BNP Paribas rolls out its Fintech Lab expertise from Europe to the Asia-Pacific region, here’s what we learnt about the most promising partnerships fintechs are adopting with banks and other ecosystem players; the due diligence needed to determine which solutions add the most value and, more importantly, who is providing those solutions.

Vincent Marchand, head of cash management Fintech Lab, and Mahesh Kini, head of cash management, Asia Pacific, at BNP Paribas highlight these fintech innovations that could potentially solve a corporate treasurer’s most pressing management questions.

Q. How can I improve my working capital? 

Treasurers typically have a fragmented view of liquidity and positions, spending time reconciling information across different accounts as they cannot make use of internal data owing to a lack of tools to access and exploit it.

One possible solution is Cashforce, a state-of-the-art forecasting tool that helps improve control of working capital by providing real-time visibility of cash flows from all data sources, across different banking partners and various ERP solutions. BNP Paribas and Cashforce entered into a partnership in September 2018 whereby the fintech’s next-generation digital cash forecasting and treasury management solutions will be available on CENTRIC, BNP Paribas’ integrated digital banking platform.

Cashforce optimises the visualisation of data, aggregating internal sources and providing drill-down functionality to cash flow drivers. It also uses smart algorithms to improve accuracy and suggests actions to boost optimisation. The result is considerable savings in terms of costs and time – as well as the development of insights across geographies or business lines that allow treasurers to add strategic value.

Q. How can I improve my international operations? 

Reconciliation of payables and receivables can create a major headache.

A cloud-based self-service reconciliation tool such as Duco Cube can be considered, to help relieve this pain-point. With an intuitive front-end that allows corporates to reconcile any type of data in any format, Duco Cube uses an algorithm that is already extensively used by large banks to match their capital market deals.

Duco Cube has proven to reduce IT running costs due to its Software as a Service solution (SaaS) deployment model, as well as operational savings via a more effective matching engine, reducing breaks, and improved investigation management.

Most invoice and bank reconciliation processes are still done manually, with the use of large spreadsheets, which may be prone to human error. The new technology empowers end-users to manage complex reconciliation and data problems in a fraction of the time required by traditional systems.

Q. How can I achieve effortless daily customer service? 

Another common problem for treasury departments is tedious manual, paper-based processes such as audit confirmations. These often leads to siloed views between the company, the auditor and the banks.

A solution such as Confirmation.com allows audit confirmations to be obtained through secure digital communication channels. Auditors can use a digital platform to provide fast, secure control of data requests and responses, and to ensure easy validation of information like audits.

Digitising this administrative process adds value by cutting the time, costs and fraud risks associated with other forms of data validation – as well as providing more visibility to the audit trail. This solution has been integrated in BNP Paribas’ ecosystem in North America and some European countries.

Of course, there many other highly suitable solutions available. So when on the hunt for the right one, ensure you lay out a clear method for narrowing down the field effectively.

DIFFFERING MATURITY LEVELS 

The first rule of thumb is practicality. New technology should address immediate treasury needs. This means working with reasonably well-established fintechs that have demonstrated their ability to scale and are already serving clients.

This also means excluding technologies that may be promising, but which have yet to deliver scalable products.

Solutions the bank categorises as maturing or worth monitoring are blockchain/distributed ledger technology – which has shown its value in areas like logistics and trade finance, but which is yet to do so in cash management – as well as machine learning and natural language generation.

Key technologies impacting cash management

Source: BNP Paribas

Areas that BNP Paribas finds ready to implement include APIs, cloud services, data management, artificial intelligence and robotic process automation. Many of these are interconnected and will build upon each other, bringing synergies and greater efficiencies in future.

FOCUS ON SPEED AND USABILITY

Vincent Marchand

Speed and efficiency in business processes such as reconciling accounts receivable is become more pressing. “As the speed of payments becomes instant and delivery is near-instant, the onus is on the corporate treasurer to select which technology to adopt to keep their company relevant,” states Marchand.

Where previous ERP-based solutions could not solve the ‘last mile’ problems of slow implementation, high cost and lengthy transition time, nimble fintech solutions provide rapid, seamless integration that allow treasury to perform its internal processes faster.

One important area for BNP Paribas is the use of platform ecosystems that provide treasury-linked solutions, with salespeople able to generate invoices that link immediately to accounts receivable, and with automation in place to record invoice payments and link instantly to the cashflow function.

These ecosystems make the treasury function more efficient, freeing up the division to focus on delivering more value-add.

Mahesh Kini

“I“In an environment where the speed of innovation is accelerating and regulatory requirements are increasing, businesses need to adapt constantly. Fintechs bring solutions that are central to this process. The question remains, of course, how treasurers in APAC can select the right partners,” said Kini.

BNP Paribas’ European Fintech Lab found that by focusing on pragmatic technologies, corporate treasurers are likely to gain short-term benefits, while also improving specific aspects of the customer journey.

Adopting the optimum usage model has proved to be an efficient approach to fintechs. This allows corporate treasurers to save time in a range of automated processes and to get strategic insights that will help transform their role within their organisations, into the corporate treasuries of tomorrow.

More insights are available here

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