Developments such as instant payments, digital currencies, and enriched data services are poised to shake up treasury management. In a recent podcast, TMI spoke to three experts to understand how, by working together, corporates and financial institutions are set to usher in new value-added services that benefit all parties. But treasurers are warned, don’t try to implement all these innovations at once!
The pace of change in payments can be daunting for corporate treasurers looking to improve their internal processes. Among the variety of trends that will dominate the next few years, some of the most critical are instant payments, central bank digital currencies (CBDCs) and enriched services from payment services providers (PSPs). They all offer the potential for treasurers to enhance their cash management processes yet present specific challenges and risks.
Instant is becoming the ‘new normal’, particularly in the 56 countries that are already live with real-time payments, according to the FIS Flavors of Fast 2020 report. Faster access to cash and richer data to analyse is an appealing prospect for treasurers, but moving away from the end-of-day and intraday liquidity statements to a 24/7 ‘on demand’ treasury is perhaps an intimidating prospect.
Wim Grosemans, Head of Product Management, Payments and Receivables, Cash Management, BNP Paribas, comments that treasurers engaging with instant payments are doing so on a use case basis. “Where corporates and institutions are actively adopting instant payments is where they see a direct integration with their business processes,” he says. “This could be claims handling for insurance, for example, or as an alternative to B2C [business to consumer] acquiring payment service providers. This touches both payables and receivables.”