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A Data-Led Approach to Automation and Analytics

by Cindy Murray, Head of Global Treasury Product Platforms and Digital Channels, Bank of America Merrill Lynch

As this year’s conference season progresses, one of the questions I am asked most regularly in panel discussions is ‘What are your clients’ main priorities today?’ The answer is easy: ‘Data’. However, the type of data they are seeking, and the way in which they wish to use it is multi-faceted, reflecting the diversity in treasurers’ and CFOs’ responsibilities.

Diverse data needs

While many companies have achieved efficient payments transmission, they often lack the ability to track payments during their lifecycle. Cash managers need to know quickly if payments have been delayed or returned to avoid missing cut-off times for essential payments, such as urgent supplier payments, and deal with any supplier credit issues or accounting implications. Consequently, treasurers and finance managers are seeking real-time visibility of transaction status information to identify and address problems, and refine processes and payments data to minimise delays and rejections.

Incoming flows can be even more challenging. Companies with a high volume of collections in particular, whether B2B or C2B, often struggle to identify the payer and invoice or account to which it relates, particularly if there have been partial credits or disputes, or invoices have been aggregated or netted. This often results in additional resource overhead, balances held in suspense accounts and therefore unavailable for working capital purposes, and delays in crediting customer accounts. This can damage customer relationships and hamper sales if credit limits show as fully utilised, and/or collection actions are taken erroneously. To address this, clients are looking for banks to transmit enriched information throughout the payments process, using structured fields in ISO 20022 formats to identify cash flows automatically, such as client references, account numbers, invoice numbers, etc.

Harnessing data for client advantage

At Bank of America Merrill Lynch, we manage a vast amount of client data for regulatory reporting and risk management purposes. While this is important for compliance purposes, we also recognise the opportunity to harness this information to help benefit our clients. Data in itself is not valuable; what is important to clients is receiving the right information, and in a format that is useful to them. For example, by leveraging industry-standard ISO 20022 formats, we can provide structured, detail-rich transaction information to facilitate payments tracking and reconciliation. In addition, we provide sophisticated analytics and graphical presentations of cash flow trends to facilitate working capital and liquidity planning and process optimisation. Furthermore, by understanding more clearly where errors or delays are arising, treasurers can pinpoint where processes may need to be improved, or standing data needs correcting or updating.