To reap the real benefits of technology, treasurers should be thinking about an extended journey, not a day trip. Tom Durkin, Digital Channels Executive at Bank of America Merrill Lynch, explores the waypoints. See below for a summary of his recent paper, Passport to Success, which also appeared in the November 2017 edition of Banking Technology.
1. THE JOURNEY STARTS
Banks are exploring ways to digitize onboarding and other laborious processes, including KYC and changing/adding signatories. This deep transformation goes beyond simply creating electronic copies of paper documents. It’s about making these processes digital from the outset, so that banks can help clients benefit from predictive analytics.
2. KEEPING THE ROUTES OPEN
Increased competition and the arrival of FinTechs are creating a new development framework for API technology. It makes the data exchange more efficient, and opens the door for a two-way conversation between bank and client that enables a treasurer to pull richer data from a single repository.
Successful banks are already putting client data together in new ways, and using it to deliver useful insights. With rich data on working capital, counterparty payments and trading activity, banks are uniquely positioned to help clients make smarter decisions.
3. MOVING IN THE SAME DIRECTION
APIs are a means of adding value for all stakeholders, but treasurers certainly would not be interested in curating a large collection of APIs for each banking relationship. Equally, they are not going to give up on standardization as new technologies emerge.
SWIFT and the banking community remain committed to the push for standardization through programs such as the SWIFT-led Common Global Implementation (CGI) and its ISO 20022-based projects. Expanding this to APIs is feasible, given their importance.
4. AT THE CROSSROADS
As standardization accelerates, banks can become the center of their clients’ transactional data, providing a consolidated view across diverse systems and inputs.
Multi-banking corporates will benefit. If a single bank can collect all the reporting information, it can provide a standardized file to its client. This could be made possible through the adoption of APIs, giving treasurers real-time views of all their positions from a dashboard of key data.
5. THE NEVER-ENDING JOURNEY
As technology and business needs evolve, banks should shape their digital offering accordingly. But only when working with their banks to help define each leg of that journey will it result in a truly satisfying outcome for the treasurer and the business.
Whatever happens, businesses will run on deeply connected technology rails. Treasurers should begin speaking with their banks on how best to harness the opportunity.