Disruptive Treasury Tech: Perspectives from BofA

Published  3 MIN READ

Technological disruption is the name of the game in financial services these days. With Bank of America’s Head of Cross-Product Solutions, Ayeesha Sachedina, speaking on a SIBOS panel later this week on the impact of AI, blockchain, automation, 5G, IoT and the like, the bank organised a press roundtable to bring some of its perspectives on this topic into focus.

Artificial intelligence

AI is one of the most talked-about technologies in many sectors, said Sachedina. BofA already incorporates it into its GTS product set. AutoFX, for example, decides whether or not to convert cross-border wire receipts, in one of 41 currencies, from a sending bank into the home currency of a beneficiary client, based on mapped patterns of behaviour.

AI will also be used to optimise client working capital, with Sachedina explaining that BofA is working on a cash forecasting product using predictive analytics to crunch data across a client’s entire multi-banking footprint. She added that a further development, in natural language processing, is being rolled out to extend self-service processing and advisory work into commercial relationships.

Application programming interfaces

Treasurers will have been force-fed the idea that APIs are one of the most liberating tools currently available. Although not new per se, their role in facilitating open banking, via PSD2, is undeniable. Tom Durkin, Global Product Head for CashPro, said the understanding of APIs has passed through the early opportunity discovery phase and is now moving into adoption mode.

“Corporate treasurers are looking to get better about using data,” he said. He believes that banks now have the wherewithal to open up and leverage a wealth of services that are housed within their back offices. “The community overall has realised the opportunity to harness better data, and APIs have become the conduit for driving that forward.”

Forced change

The environment created by the pandemic has seen even a relatively simple advance such as digital signing gain a huge amount of ground. For Durkin, having seen the immediacy that a simple tool such as this – and mobile access and push alerts – has in enabling business just to continue under stressed conditions, it will surely be a catalyst for deeper discussion on how treasury can be further elevated by technology.

Indeed, with levels of uptake of such tools unprecedented in recent months, he feels, the current environment “continues to showcase an opportunity for treasury to transform”. Are we going to go back to the old ways, he asks? “I don’t think so.”

Cross-border advances

Of course, cross-border payments are subject to many new ideas, noted Ad van der Poel, Co-head of Product Management, GTS EMEA. The adoption of blockchain or distributed ledger technology (DLT) in this space in particular is gathering momentum. “It’s a way of seeing how well it works and if it is something for the future,” he reported.

Van der Poel also referenced digital currencies. With increasing central bank activity in this space (18 different initiatives to date, the most advanced still just testing), he commented that “it will be interesting to see how these will be used – it’s one for any player in the industry to follow”.

It’s SIBOS week, so SWIFT got a mention in his cross-border payment despatches. Success in this space is down to reachability, van der Poel said. Connected community is vital and SWIFT still has the most collaborative power to deliver.

By June 2020, more than 65% of cross-border payments travelled via gpi. It’s gaining ground quickly, coming with a payment speed bonus, some 95% of gpi transactions competing same-day, 40% of these within five minutes.

With SWIFT’s plans for a transaction management platform building on gpi and ISO 20022 migration, and leveraging APIs, the community treasurers, said van der Poel, can expect a service beyond messaging, citing tools such as pre-validation, data analytics and fraud detection as a taster.

All the major card networks are upping the ante in the cross-border payments space too, he noted. Visa, Mastercard and American Express are adding non-card payments to their roster of services. “They’re leveraging their existing networks to cover ACH and wire payments, and we’re working with them to explore the possibilities.”

With banks like BofA comparing the different technology-driven options, based on factors such as client need, cost, security, and performance, van der Poel believes payments are in the midst of “exciting times”.

Although he admitted that the wider industry has been talking about technological progress for some time, he is now convinced that “we’re getting closer to deploying some of these tools, and it will be exciting to see how they all evolve”. Progress, it seems, cannot be halted.