Payments & Banking

For a corporate treasury, payments and banking services form the essential operational infrastructure. This function, often called Transaction Banking by financial institutions, encompasses the day-to-day movement, management, and security of corporate money. It is the practical execution of treasury strategy, ensuring suppliers are paid, customers can pay, cash is visible, and liquidity is optimized.

Core Components: What Treasury Manages

The corporate treasurer’s interaction with banks centers on three interconnected service pillars that support global business operations:

The Evolving Ecosystem: Banks, Fintechs, and Platforms

The provider landscape is no longer dominated solely by banks. Corporate treasurers now manage relationships across a diverse set of players.

• Traditional Banks: Remain foundational, providing global networks, regulatory expertise, and balance sheet strength for core lending and risk products. Their offerings are becoming more digital, with a focus on API connectivity.

• Fintech & Specialist Providers: Challenge incumbents by solving specific pain points. Examples include platforms for cross-border payments (often with better FX rates and transparency), B2B payment initiation, e-invoicing, and automated reconciliation.

• Banking Platforms & Aggregators: Offer a layer above individual bank accounts. These Treasury Management Systems (TMS) or multi-bank portals aggregate information and transactions from multiple banking partners into a single view, simplifying control and reporting.

This shift means treasury must be an adept integrator, connecting best-in-class solutions from various providers into a coherent, controlled, and efficient operational stack.

Strategic Considerations for Implementation

Managing this ecosystem requires active strategy. Key questions for treasury include:

• Bank Relationship Strategy: Are you consolidating to a few global partners for simplicity or maintaining a diverse panel for redundancy and competitive pricing? What is the right mix of global, regional, and local banks?

• Technology & Integration: How do your banking providers connect to your ERP and TMS? Are they offering modern APIs for real-time data and automated payments, or relying on older file-based (e.g., host-to-host) connections?

• Payment Modernization: Are you adopting new standards like ISO 20022 for richer, structured payment data? Are you evaluating instant payment schemes (like SEPA Instant in Europe) to improve supplier relationships and cash flow?

• Security & Fraud Prevention: As payment initiation moves digitally, robust controls are mandatory. This includes payment approval workflows, fraud detection systems, and employee training against business email compromise (BEC) scams.

In essence, the payments and banking function has transformed from a utility into a strategic area. A modern treasurer must act as an architect, designing a resilient, efficient, and transparent financial operations infrastructure that supports the business’s global ambitions while rigorously managing cost, risk, and security.