how API-based cash management solutions are transforming the work of treasurers

By Benjamin Wurzburger, director of operations at Ceviant,

For about fifteen years, we had to go to the bank to check our account balance or our transaction history at an ATM or at the counter. Now we can do it in seconds from our phones.

For decades, corporate treasurers with multiple bank accounts at a bank had to log into each account, access the account balance and transaction history, then manually put all that data into an Excel spreadsheet and reconcile for each individual account.

This process is time consuming and can lead to human error. In addition, as a business grows, its payment volume also increases.. Large companies with more than 20 bank accounts may need a larger team to manage cash, which leads to higher costs. As businesses grow and their operations expand into other jurisdictions, there is also a need to manage accounts in multiple banks and currencies, moving money from one location to another.

However, if corporate treasurers have a sophisticated cash management solution that allows them to have all the data fed directly from their financial institution into a real-time portal, it can help them eliminate human error and the need for Excel spreadsheets, as well as reducing costs, thus resulting in greater efficiency for the business.

This solution is found in Open Banking APIs, which establish a real-time connection between a banking institution and a cash management platform for a corporate treasury, allowing it to initiate and send payments and data on beneficiaries directly to the company’s bank.

Open banking is quickly becoming the benchmark in today’s financial services industry. The concept involves the use of publicly available “open” APIs that allow third-party developers to build custom applications around their services. Payment requests can be created directly in the cash management platform, with payment processing handled directly at the bank. This effectively eliminates the need for a third-party middleman.

Corporate treasuries around the world are beginning to adopt APIs to optimize their payment processes. We have seen this transformation happen in mature markets such as Germany and the UK. In emerging markets, it may still take some time to educate treasurers on the benefits of API-based cash management solutions to overcome some misconceptions about security and the lack of control over the movement of funds via the platform. However, the potential is enormous and these obstacles have already been overcome in other markets. Once treasurers see that they are in fact in charge of their accounts and taking action on the platform, they clearly see the benefits. For example, in Nigeria 15 years ago there was no mobile banking, and a similar perception of lack of control existed. But once people saw it worked, they trusted it.

About Donnie R. Losey

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