Real-Time Treasury Revolution: Interview with Automation Boutique on Their New Partnership

“We think every company with treasury activities can gain value from real-time connectivity”

Find the partnership announcement on which this interview with Jan-Willem Attevelt is based here.

How does Automation Boutique see the growing importance of real-time treasury management?

In our opinion, the use cases for more real-time treasury management are not new. When making treasury decisions, it is always best to look at all the most up-to-date data, e.g., the current cash position and the cash flow forecast. Basing decisions on outdated data can lead to suboptimal outcomes.

What is relatively new is the technology. Bank, fintech, and ERP data are increasingly becoming available through premium APIs. For older systems that do not offer APIs, software robots can frequently extract data, allowing for more real-time aggregation of data and treasury management.

Although the technology is there, making use of it is often not so easy for corporate treasury. APIs often lack standardization, which means that integrating APIs from different banks requires different implementations. So, for companies that are multi-bank, API aggregators like Necto (which aggregates premium bank APIs) solve the standardization problem. The reason for this is that companies only need to integrate the API once and can then connect to all their banks.

We do notice corporate treasury often lacks the technical expertise to capitalize on better connectivity and real-time treasury management. Integrating these APIs, whether it be with the ERP, TMS, a data lake, or a reporting tool like Excel or Power BI, unfortunately, requires quite some technical expertise. This is an impediment to the adoption of APIs and one of the reasons Automation Boutique exists. We think companies will increasingly move to real-time treasury management over the coming years and are actively helping them get this right.

Which specific treasury operations or company sizes do you see benefiting most from this real-time API partnership solution?

We think every company with treasury activities can gain value from real-time connectivity. Better cash visibility is something that might not be much of a problem when complexity in the company is low, but will become more challenging as the number of banks and bank accounts in the group grows. Real-time cash visibility has many benefits for companies of all sizes:

• Detection of Overdraft Balances: It allows companies to fund accounts promptly to avoid overdraft charges.
• Liquidity Management: It enables companies to allocate surplus funds more effectively, maximizing interest earnings or investment returns.
• Fraud Detection: Immediate visibility into transactions can help detect and respond to fraudulent activities quickly, minimizing potential losses.
• Reporting: It provides up-to-date cash position information, allowing for more accurate and timely financial reporting.
• Cash Forecasting: Having an up-to-date forecast at all times allows any company to make better decisions.

How can this partnership help us improve cash forecasting accuracy with real-time data?

More real-time data allows us to create better cash forecasts, both short-term and long-term.

• Short-term Forecasts: Real-time connectivity through APIs enables frequent updates on short-term forecasts. Transactions on the bank accounts can be updated almost instantaneously in the company’s systems (e.g., ERP and TMS) and tools, allowing for fast reconciliation and a better view of Accounts Payable and Accounts Receivable. Combine this with real-time updates on bank balances and companies have a lot of ingredients to improve short-term cash forecasts.
• Long-term Forecasts: If we take longer timeframes, known cash flows are often not sufficient, and adding extrapolation of historical data is valuable. APIs, mostly being ISO20022 compliant, offer richer data than SWIFT messages, which allows for categorization of historical cash flows. This allows companies to detect seasonality patterns and trends per cash flow category, which they can use as a data source for the long-term forecast, but also for evaluating forecast quality (actuals vs. forecast analysis).

The partnership between Necto and Automation Boutique is established to offer a full set of services to companies. While the real-time premium API connectivity with banks is provided by Necto, we at Automation Boutique add value by helping companies get the most out of the possibilities these APIs provide. That means we do not only integrate the connections in the company’s systems and tools, but also help companies improve their treasury processes now that they have better connectivity.

Thank you for reading!