Cash & Liquidity Management

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Riding the Digital Wave in Cash Management The payments and cash management market is in transition. Online and mobile banking trends, as well as the ongoing digitalisation of society, are changing treasurers’ expectations.

Riding the Digital Wave in Cash Management

by Klaus Josef Müller, Head of Product Management Cash Services, Commerzbank AG

Klaus Josef MullerThe payments and cash management market is in transition. Online and mobile banking trends, as well as the ongoing digitalisation of society, are changing treasurers’ expectations. Yet banks have traditionally been slow to innovate and stay ahead of the digital curve. As such, how can they take advantage of the digital opportunity to build products and services attuned to changing customer demand?

The requirements placed on businesses are changing. With increasing digitalisation and growing pressure to become more efficient, especially with respect to their cash management and payment structures, more and more decision-makers are attaching the highest strategic relevance to the digitalisation of entrepreneurial processes.

However, digital technology has not yet transformed corporate banking the way it has other industries, and banks have a reputation for being conservative and slow to innovate, especially in a world with increased regulatory constraints and outdated IT architecture. As such, banks will have to adapt quickly if they want to keep pace with their corporate clients who are embracing technological innovation within their own businesses.

The good news is that, despite the slower transformation, digitalisation is now beginning to manifest itself, for instance, in mobile banking, the modernisation of payments standards, or the pursuit of working capital optimisation. It is also evident in the growing adoption of the Bank Payment Obligation (BPO), which provides some of the benefits of a Letter of Credit in a digital multi-bank environment.

Having recognised this strategic shift, and given the evolving modern-day needs of its technophile corporate treasurers, Commerzbank has extensively revised and expanded its digital and multichannel offering. Here we explain two digital solutions that are breaking new ground in transaction banking.

Mobile: the new payment transaction channel

Certainly one of the key catalysts for change is mobile banking, which is likely to partially displace the use of other channels as mobile internet usage explodes. Indeed, being able to access company accounts ‘anytime, anywhere’ is becoming increasingly important for corporates, particularly given that they already enjoy real-time access to their personal banking and expect all banking services to be available via the same channels.

Of course, on-the-go access is even more important for internationally-oriented firms which hold bank accounts in different countries across a number of different national banks. As such, gaining a clear overview of account balances is essential for optimal cash management, and navigating different payment formats can become extremely complex.

In this respect, Commerzbank’s original payment solution, Global Payment Plus (GPP) – an online multi-banking application launched from a USB signature stick – can help companies manage all of their global bank accounts in the relevant national format from a single application. The combination of the multi-banking function in a web-based application means corporates can retrieve information on all of their accounts (both with Commerzbank and other third-party banks), process them centrally, and manage their transactions worldwide.

Significantly, GPP clients can now use Commerzbank’s Cash Management app to see a snapshot of up to 15 accounts on their mobile device. While most banks now offer mobile banking applications which give an overview of accounts held with that individual bank, no other bank yet offers a comprehensive overview of all third-party bank account balances through a mobile application.

In this respect, Commerzbank’s Cash Management app enables GPP clients to understand whether they are long or short before they have even set foot in the office.

Treasury Tools app

Not only has Commerzbank identified payment innovation solutions, it has also developed a tool to help SMEs, in particular, to optimise their cash management, given that they are often less well equipped in this respect than larger firms.

For example, following the roll-out of SEPA, many companies are now enjoying the benefits of harmonised euro payments and centralised processes. However, the challenge still remains in quantifying the actual business gains that can be achieved by centralising their payments.

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