A Hub of Activity

Unlocking Control Through Centralised Payments

As treasurers grapple with increasing complexity in payment operations, ION’s next-generation enterprise payment infrastructure is enabling corporates to enhance visibility, mitigate risk, and prepare for ISO 20022 compliance.

In theory, corporate payment processes should be straightforward. However, as organisations expand through mergers and acquisitions, treasury teams often inherit a patchwork of ERP systems and banking relationships with distinct workflows and formats. The result is a fragmented landscape that complicates consistent control and oversight.

Michael Kolman, Chief Product Officer at ION Treasury, outlines the problem: “It’s much more difficult for corporates to manage payments if the controls are inconsistent and spread across numerous platforms.”

In response, ION has developed the Enterprise Payment Hub, a solution designed to streamline payments across source systems, unify connectivity, and establish a common framework for managing payments.

A mushrooming treasury technology environment can quickly develop into a sprawling operational challenge. For example, a company could be running six ERP systems where five are connected to banking partners, but the sixth has no direct connection at all. In that case, treasury must manually upload and manage the payment files.

“In that scenario, the treasury team sending those payment messages has to manually go into the bank portal and upload all the files,” Kolman explains.

This is where the payment hub makes a world of difference by consolidating these activities and automating processes such as payment file uploads and communication between various systems. The hub’s design also enables seamless data flow in and out of the platform.

“The Enterprise Payment Hub makes integration easier because we provide API connectivity to the hub and bi-directional data flows,” Kolman affirms. This includes payment instructions, bank statements and workflow notifications such as rejections and approvals.

From fragmentation to foresight

Beyond simplification, the hub acts as a catalyst for digital transformation. By centralising payment activity, a foundation for more reliable forecasting and automation is created. This shift allows treasury teams to move towards more strategic cash forecasting.

“We’re solving for a future state where treasurers can use data to drive several insights, layer on more automation, and leverage technologies like AI,” notes Kolman. The centralisation of payment data supports these efforts by feeding consistent, high-quality data into downstream analytics tools and forecasting models.

With centralisation comes improved visibility, both internally and across banking partners. The hub supports various connectivity models, including host-to-host, APIs, and Swift. For example, an integration with Swift GPI offers valuable tracking capabilities for corporates using Swift for cross-border flows.

Payment status updates and confirmations feed into the hub where users can monitor updates in real-time, then into downstream systems, such as any of ION’s treasury platforms. Where internal systems lack this functionality, users can access status information directly through the hub’s web-based user interface or receive email alerts.

A sharp focus on cost and efficiency

Generating cost savings through efficiency gains is vital for treasurers frequently required to do more with less. Corporates that maintain multiple bank connections face an array of technical overheads, particularly when payment formats differ. However, consolidating these connections through the hub simplifies ongoing maintenance and makes onboarding new banks easier.

“For firms with various payment source systems that each has a connection to a bank, the hub enables you to get rid of multiple connections,” enthuses Kolman. “The company has one connection to the hub, and the hub manages all the various bank connections.”

The hub also eliminates the need for manual workarounds that introduce additional costs and complexity to payment processes. “Manual interventions add additional operational work and risk in addition to the fees associated with providing access to the bank portal for all the extra people,” Kolman highlights.

Structural savings are also possible. With greater oversight, corporates may use the hub to support in-house banking or virtual account structures, potentially reducing the number of physical accounts and the associated costs.

Consistency in fraud defence

Payment security is another huge consideration for treasurers. This can be stretched to breaking point when managing myriad bank connections through different technology platforms. The Enterprise Payment Hub applies consistent fraud controls across all payment flows, regardless of the source system.

“If all payments are ultimately following the same route, all payments can be provided with the same services,” assures Kolman.

These services include payment anomaly detection, verification of payee and sanctions screening. For example, anomaly detection can highlight outliers in amount, counterparty or workflow. Verification services will confirm that the intended beneficiary matches the account owner, which reduces reliance on time-intensive manual callbacks.

Of course, integration is not just about sending payments. The hub also receives bank statements, acknowledgements and payment status updates and routes this data back to the source systems. This two-way communication allows treasury teams to act on the most current data.

“If we run a fraud check and it fails, there is communication back to the source system to alert both the treasury and the payment requestor that the payment has been flagged for potential fraud,” Kolman points out. Payment rejections and even holiday-related date adjustments are also pushed back to the originating systems.

Tomorrow comes today

Two crucial developments in the finance space are accelerating the treasury business case for payment centralisation. The first is the growing use of AI in finance, which relies on structured, consistent data.

“We’re starting to see not just hypothetical opportunities in leveraging AI, but real, practical ones,” reveals Kolman. “For treasurers, the sooner they get started, the faster they will see results, and it’s all to do with data.”

The second development of note is the financial industry’s migration to the ISO 20022 payment format. This is reshaping the way payment information is structured and exchanged.

“ISO 20022 introduces richer, more detailed fields and removes character limits, improving data quality,” notes Kolman.

For corporates, the transition to the new payment format also serves as a timely incentive for their digitisation efforts. “The ISO transition is a nice catalyst for treasurers to invest in modernisation, as corporates will have to adopt this format,” he adds.

By serving as a single source of truth for payments and connectivity, ION’s Enterprise Payment Hub positions treasury teams to meet today’s demands and prepare for what’s next.