Supercharging Treasury with Industry 4.0 Technology
By Eleanor Hill, Editor
Artificial intelligence (AI) and robotics are no longer pipe dreams for treasury. As attendees at HSBC Global Liquidity & Cash Management’s recent Treasury Forum in London discovered, leading treasury functions are already deploying these ‘Industry 4.0’ technologies to make their operations slick, lean and intelligent – without significant budget or disruption.
“For a corporate to maximise its return on Industry 4.0, it needs to invest in Treasury 4.0 to support it.” This was the clear message from Lance Kawaguchi, Managing Director, Global Head – Corporates Global Liquidity and Cash Management, HSBC, during his opening address to over 90 corporates at the bank’s recent event entitled ‘How the Fourth Industrial Revolution is Driving Treasury Evolution’.
Kawaguchi also emphasised the growing need for treasurers to think creatively around new technologies in order to add value to their organisations.
Revolutionising correspondent banking
Next to take to the stage were Ryan McAuliffe, SWIFT Payments Innovation Specialist, SWIFT and Andrea Feay, Group Treasury Manager, NSG, to explain how SWIFT’s global payments innovation (gpi) is leveraging technology to change the face of cross-border payments.
Feay began by outlining the challenge: “Cross-border payments are a bugbear, since there is a total lack of clarity. You send the payment and simply hope for the best, and if it doesn’t arrive on time, you have to try to track it down, via the originating bank,” she explained. “We recently had a payment that was untraceable for seven weeks so to be ready for situations like this, we build in cash buffers in case a payment doesn’t arrive. This is inefficient from a liquidity standpoint but SWIFT gpi for Corporates is changing that and helping treasury departments to be as slick as possible,” she enthused.
McAuliffe went on to explain the benefits of gpi, from faster use of funds to transparency and improved remittance data. He explained how, rather than being just a DHL-style tracker for the banking industry, gpi goes further. “Our unique end-to-end transaction reference (UETR) number, which is created upon origination and maintained throughout the entire payment chain, not only provides complete visibility on where a payment is and when it has arrived, but also on deductions and FX. To help corporates with reconciliation, we also ensure remittance data is not modified throughout the chain,” he noted.
According to McAuliffe, SWIFT gpi represents a “rejuvenation of correspondent banking for the digital era – and works for the benefit of banks and corporates alike.” He shared some interesting statistics with the audience, stating that:
- 3,500 institutions have committed to adopt gpi
- 500+ of those are live and sending gpi transactions on a daily basis
- Live traffic is happening in 130 currencies across 1200 corridors, with over $300bn moving on a daily basis
- 40 % of those transactions occur within five minutes and over 90 % within 24 hours
Bringing these numbers to life, Feay explained that, although NSG is early on in its SWIFT gpi journey, the company now has a portal where it can track payments, rather than ringing up its bank(s). NSG chose to work with AccessPay on this solution. “We generate the UETRs in our TMS and then Access Pay displays that information. All MT199s are also displayed there,” she commented. “The ideal solution would be to have this straight into the TMS, and I know SWIFT is working on that with other gpi for Corporates customers, however we are pleased with the progress we have made thus far.”