Treasury Function: Unlock Immediate Cash Flow
- this article discusses how the rise of real-time payment systems and API banking are fundamentally changing treasury management.
- * Instant Payments are Expanding: Real-time payment rails (RTP, fednow, SEPA Instant, faster Payments) are moving beyond emergency/consumer use and are now being integrated into core B2B processes...
- In essence, the article argues that treasury management is evolving from a reactive, end-of-day function to a proactive, real-time capability, and banks are playing a crucial role in...
Summary of the Article: “End of ‘Good Enough’ Treasury Management”
this article discusses how the rise of real-time payment systems and API banking are fundamentally changing treasury management. The traditional “good enough” approach - focused on efficient end-of-day reconciliation – is becoming obsolete.
Here are the key takeaways:
* Instant Payments are Expanding: Real-time payment rails (RTP, fednow, SEPA Instant, faster Payments) are moving beyond emergency/consumer use and are now being integrated into core B2B processes like supplier payments and intercompany funding.
* API Banking Enables Real-Time Data: Banks are providing APIs that give treasury teams continuous access to critical data (balances, transactions, FX positions) in near real-time, rendering traditional file transfers outdated.
* New Definition of “Good” Treasury: Success is now measured by the speed and confidence with which cash can be deployed, liquidity rebalanced, and responses made to events as they happen.
* Challenges for Treasury Teams: Existing treasury teams and their control frameworks were built for slower cycles and may struggle to adapt to this faster pace. The bottleneck is frequently enough the connection between the TMS and the banks, not the TMS itself.
* Incremental Conversion is Key: A complete overhaul of systems isn’t usually necessary or justifiable.Rather, teams are layering real-time capabilities onto existing infrastructure.
* banks are Central to the Solution: Banks are increasingly offering API-based services that provide these incremental capabilities without requiring clients to abandon established processes.
In essence, the article argues that treasury management is evolving from a reactive, end-of-day function to a proactive, real-time capability, and banks are playing a crucial role in enabling this transformation.
You can find more information in the linked article: Making Sense of the Liquidity Hub Treasury Model