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Working with industry leading organisations, experts, governments and universities, BCR Publications delivers expertise in factoring, receivables and supply chain finance to a global audience.
BCR has long been a beacon of innovation and excellence in the realm of receivables finance, playing an instrumental role in shaping the industry’s international landscape. Through its comprehensive conferences, insightful publications, and thought leadership, BCR has facilitated crucial dialogues and connections among industry professionals, driving forward the development of receivables finance globally.
Instant Payments: the SEPA Instant Payments rulebook is published, what’s next?
| 20-2-2017 | Boudewijn Schenkels | Sponsored content |
SEPA Instants Payments (also called SCT Inst – SEPA Credit Transfer Instant) will allow sending and receiving money 24/7 in seconds. European banking communities can go live from November 2017, the Dutch community has planned to go live from May 2019 with the first Instant Payments services. The development of the SEPA Instant Payments infrastructures of the banks and processors are in train. In april 2018 the start of the inter-CSM testing is planned, the end-to-end bank tests and the pilot phase from January until April 2019.
From our Instant Payments training classes for business professionals and IT staff, we find that participants are not fully aware of the large impact Instant Payments will have on the complete value chain and the opportunities it will bring. In order for you to understand the impact and opportunities, I will explain how Instant Payments are processed.
To give an impression of all the change aspects for users, the banks and the interbank processing side:
For corporates amongst others:
For banks amongst others:
For processors amongst others:
As the launch dates come nearer it certainly triggers managers to now thoroughly evaluate scope and time scales for (required) internal projects and ensure to be ready and steady before launch in 2019 as well as business professionals to anticipate and grasp the potential opportunities.
The key differences between the current SEPA Credit Transfer and the new SCT Inst scheme are:
Instant Payments process
In our training, we also explain the differences between the normal payment flow (SCT) and the Instant Payments flow (SCT Inst). The process flow is described below in summary and will take place in several seconds.
Figure 1. (Source: EPC Rulebook)
Several key actors are involved in the payments process:
The new process in summary:
The Originator Bank receives an SCT Inst Instruction from the Originator (Step 1). It verifies the instruction and sends the transaction to the CSM (Step 2), which verifies the message, ensures that the Originator bank has enough funds and instantly sends the SCT Inst Transaction message to the Beneficiary Bank. The Beneficiary Bank instantly verifies the payments and if it can be booked on the account of the Beneficiary (Step 3). The Beneficiary Bank confirms to the CSM if it was successful (positive confirmation) or not (negative confirmation with an immediate Reject) (Step 4). The Beneficiary can withdraw the funds (Step 5) instantly if in the previous step the confirmation was positive (and after the Beneficiary Bank has ensured that the CSM received the positive confirmation message). The CSM instantly reports to the Originator Bank if the SCT Inst Transaction had been successful (or not) (Step 6). In case the Originator Bank receives a negative confirmation about the SCT Inst transaction which indicates that the funds had not been made available to the beneficiary, the originator bank is obliged to immediately inform the originator (Step 7) and lift the reservation of the amount made in step 1.
All in seconds and 24/7!
This all means, that beside the flow of money, there is also a flow of messages between the customer and the bank. Both Beneficiary and Originator will be informed (in a few seconds) that the transaction is done (or not).
Are you interested in what the new SEPA Instant Payment will mean for your organization?
Come to our next open training (March 15 in Utrecht) or inquire about the possibilities of an in-house training.
More information at: www.paymentsadvisorygroup.com.
If you have any questions please contact us via: [email protected] .
Boudewijn Schenkels
Senior Consultant Payments @ Payments Advisory Group
GTreasury Innovation Lab Launches with Goal of Accelerating the Development and Deployment of New Treasury Technologies
17-02-2022 | treasuryXL | Gtreasury | LinkedIn |
The new business unit is a streamlined proving ground for the transformative solutions that empower modern treasurers
CHICAGO, Ill. – February 17, 2022 – GTreasury, a treasury and risk management platform provider, today announced the launch of the GTreasury Innovation Lab. Expanding and formalizing the culture of technology innovation that GTreasury has always supported within the company, the Innovation Lab is structured to bring significant and differentiated impact to customers through brand new advances in treasury management.
The technology team at GTreasury continuously recognizes potential opportunities for treasury innovation. The company has traditionally held twice-annual hackathons to explore unique and creative ways to advance treasury technology and integrations. Now with the launch of the GTreasury Innovation Lab, each member of GTreasury’s technology team will have a dedicated cycle within the lab, gaining a purpose-built and regular outlet for putting ideas to the test. GTreasury developers also constantly absorb feedback from the customer support team, which gives them insight into the specific challenges that treasurers face. Those insights inform developers’ innovative approaches to increase the capabilities, usability, and overall efficiency of the solutions within the GTreasury platform, both for customers and GTreasury’s internal team that supports them.
“GTreasury has always been forward-looking with the technology and integration capabilities that can enable treasury and finance teams to do more and do it more efficiently,” said Ciarán O’Neill, Director – Innovation Lab, GTreasury.
“We keep one eye on where customers are right now and one eye on where they want to be. Our focus is on making sure that we’re always leveraging the latest technologies and offering future-proof solutions – it’s that philosophy that has led to pioneering creations like SmartPredictions™, our AI-fueled cash forecasting tool. The launch of the GTreasury Innovation Lab accelerates our pursuit of the innovations that it takes to develop and deliver powerful and compelling technological advances to our customers, and we’re excited to get going.”
Technologies born in the GTreasury Innovation Lab will progress through a systemic process designed to ensure the viability of a new solution. Developers at the lab first nurture initial ideas into working proof of concepts. Lab members then vote to select the solutions with the most potential to provide demonstrable day-to-day value for treasury teams. Solutions next enter a validation phase, where ideas are presented to internal stakeholders and customer representatives, including early adopters of a beta product. Validated solutions then move to a production development team to be fully built and integrated as stable enterprise-grade components of the GTreasury platform.
The GTreasury Innovation Lab already has a slate of high-potential solutions in ideation, including many in areas where the introduction of AI/ML capabilities offers tremendous potential. Initial areas for exploration include advances around BI reporting, risk analysis modules, and a reconcilement module offering more automated and accurate reconcilement between forecasted and actual treasury payments.
About GTreasury
GTreasury is committed to connecting treasury and digital finance operations by providing a world-class SaaS treasury and risk management system and integrated ecosystem where cash, debt, investments and exposures are seamlessly managed within the office of the CFO. GTreasury delivers intelligent insights, while connecting financial value chains and extending workflows to third-party systems, exchanges, portals and services. Headquartered in Chicago, with locations serving EMEA (London) and APAC (Sydney and Manila), GTreasury’s global community includes more than 800 customers and 30+ industries reaching 160+ countries worldwide.
7 Cash Management Trends for 2022
16-02-2022 | treasuryXL | Nomentia | LinkedIn |
While the show must go on and treasury and finance teams had a busy life at the start of the year, it’s time to take a look at the ever rapidly changing cash management trends of 2022.
While PWC has predicted that the top priorities for CFOs in 2022 will be advanced cash and liquidity management, technology and digital innovation, fraud and cybersecurity, and business partnering, we also internally discussed what trends we see emerging during the new year.
1. Digitalization of the processes continues
A year ago, this time, we commissioned a Forrester study, ‘Successful Businesses Excel At Cash Management’, to discover how top decision-makers see the state of cash management. We were ready for some interesting findings but what we found was even more interesting than what we expected.
Clearly, during the past years, a lot has changed as finance and treasury teams had to adjust to the new reality that the global pandemic has brought on all of us. While digitalization has been on the agenda of everybody for some time, it’s been time to speed up the transformation.
While the digital transformation has started in many enterprises already years ago, the work continues to reap the benefits of cloud-based cash and treasury management technology to improve organizational flexibility, cash management processes, and security.
Better digitalized processes do not only make the life of employees easier, but companies can also untap hidden cash, inject accurate forecasting into decision making while improving their day-to-day treasury and finance operations with automation.
While last year enabling home working and ensuring business continuity was a significant driver, for sure, we are moving towards a world where the next items on the cash management wish list will climb up the priority ladder.
2. Payment solution for cash flow efficiency
Payments are the core of every business process, but compliance is often the main driver for many to improve existing processes. It’s often the same when companies adopt a payment tool for their global payments to improve the efficiency of their global B2B payments. Having a single tool allows more control over how payments are processed, approved, and released to the banks.
Payment efficiency is also the first step for many other cash management priorities, such as better liquidity management and cash visibility
In the process of setting up a payment solution, the hardest part of working with ERPs, existing TMS, and multiple banks is also tackled and can be utilized for implementing new solutions along the way.
Adapting a tool for payment tool can also make centralized user rights management easier.
3. Security is an unavoidable topic
When we are talking about payments, we must discuss security. During last year, financial fraud cases have been making headlines globally. For compliance, organizations must have the basic security measures in place, but finance and treasury are departments that need more advanced risk mitigation capabilities to tackle financial crime and fraudulent attempts to safeguard the company’s funds and financial stability. To tackle security concerns, partnering up with the information security team and finding the right vendors can provide you with the necessary precautions.
Companies are starting to utilize artificial intelligence and machine learning for catching suspicious fraudulent activity or to spot manual errors.
As all companies could be subject to financial crime, investing in fraud prevention should be a no-brainer. It’s almost like insurance for minimizing the risk of an actual incident.
4. Outsourcing bank connectivity
You will rarely meet someone that would say that bank connectivity is not a challenge. Yet, it’s something that everybody must have in place. In the Forrester study, 76% of the respondents believed that bank connectivity for fetching statements and intraday material is valuable for their treasury and cash management activities.
Connecting to banks is a challenge due to the different communication protocols and file formats. When banks make changes on their end, the existing connectivity should reflect on that too.
This is only part of the challenge. On the other end, there should be a connection to ERP systems (like SAP or other) or to a TMS to fetch all the accounts payable data instantly. This requires working with another communication protocol and another data format.
Between the two different data formats, there must be a data mapping to make sure that the communication between the bank and the organization works flawlessly.
It is challenging enough to set up a bank connection with a single bank. Imagine doing this process with multiple banks
That’s why most organizations are opting for bank connectivity as a service where companies like Nomentia have already over 10 800 bank connections established and expertise to take care of the rest.
Ps.: We have also created a cool video on how easy it can be to outsource the management of your bank connections:
5. We are saying goodbye to spreadsheets
Let’s be honest, cash forecasting with excel is challenging:
Two of the main reasons that are holding back companies from purchasing a solution for liquidity management is the cost and the perception that it’s easy to create cash flow forecasts with spreadsheets and that is how it’s been always done. However, the trend is shifting and more companies start to realize that an actual liquidity management tool would have more benefits.
Using a tool for liquidity makes collecting forecasts and actuals automated and the data can be collected from multiple source systems to help to understand the organization’s current, past, and future liquidity positions to optimize cash flows and FX positions to optimize internal and external funding.
Liquidity management software today is extremely user-friendly and intuitive to use so that users can create reports easily to create accurate reports.
6. Reconciliation for all
Comparing bank statements against your accounting to make sure the amounts match each other is not too difficult for small firms where their clients and cash flows come from fewer sources and banks. In enterprises, reconciliation may not be so straightforward. In our Forrester survey, 61% of decision-makers say it’s challenging or very challenging to reconcile payments.
Thus, we expect that automation of the reconciliation process will be the star of 2022 so that organizations can streamline the process for faster month-end closing.
7. Alignment between treasury, finance, and IT
According to finance executives, the lack of alignment is the top barrier to better cash management. This is something that at Nomentia we’ve been experiencing firsthand. In a recent interview with TMI, Jukka Sallinen, Nomentia’s CEO said the following:
“Lack of collaboration between different functions within the organization is one of the significant hurdles. There should be more roadmapping and alignment between treasury, finance, and IT. Many solutions provided by software vendors have grown into do-it-all monolithic systems. That, unfortunately, often leads them to be mediocre at best and none of the three departments is entirely happy to work with them. In addition, while there has been lots of talk about open banking and standardization to improve the efficiency of cash management processes, most of these promises have remained unfulfilled.
I believe treasurers want more flexible and fast solutions that can solve their specific challenges and integrate well with their core treasury management system (TMS) and other systems. While it is obviously everyone’s responsibility to look at the big picture, maintaining the growing number of systems and surveying the providers’ landscape is often left to IT. Greater collaboration would be preferable.”
Setting up new solutions, bank connections, or improving security requires cooperation between the different stakeholders and in 2022 they will need to strengthen their alliance for actualizing the strategic benefits of cash management.
Cash Management tools are becoming more democratic
Cash management solutions becoming more accessible for businesses of all sizes. As it’s time to digitalize treasury and finance, there are affordable options available for anybody for all the solutions mentioned above. A payment factory, liquidity management, or reconciliation can be easily implemented for a fair price tag in almost any business. The trend has been moving from one-size-fits-all solutions to a hyper-modular approach: you take the solution that you need and integrate it into your existing solution stack so that you can pick the best solutions from different vendors.
Of course, implementation of new cash management solutions will require cooperation and alignment between different departments, prioritization, as well as finding the right strategic vendor that can support the organization’s finance and treasury roadmap.