The Innovators 2020: Cash Management

Our innovative cash management institutions have all introduced new products and services that give customers greater flexibility and greater control over their cash.

Uncertainties raised by Brexit and a rash of global trade disputes were forcing companies to evaluate how they manage cash flows even before the coronavirus accelerated the need for cash visibility. The fact that many banks and businesses are now operating remotely puts further strain on their capabilities. Application programming interfaces (APIs) allow banks and their corporate clients to access best-of-breed solutions at lower cost and with faster implementation. They also provide flexibility, enabling treasurers to pay only for the services they use but scale up at a later date if required. Flexible solutions help companies manage cash capabilities; companies that can provide them may command a competitive edge going forward.

The common denominator of this year’s Most Innovative Cash Management Banks is that their offerings put power in clients’ hands, giving corporate treasurers greater flexibility and greater control over their cash.

Abu Dhabi Commercial Bank’s Virtual Accounts phase 2 API integration, for example, promises flexibility to open, change, close and monitor a large number of virtual accounts in almost real time. Improving reconciliation of financial statements that cover numerous clients and suppliers, by creating virtual accounts under just one physical account, promotes clarity and cost savings without compromising functionality or reporting, ADCB says.

ING’s zero-knowledge proof notary service, which runs on the Corda blockchain, can evaluate the validity of a transaction without revealing anything about it except whether it’s valid. “Even with the use of private permissioned ledgers, we believe there are still key privacy challenges to tackle in relation to DLT” says Benoît Legrand, chief innovation officer at ING. “For instance in Corda consensus currently a choice must be made between a validating notary and non-validating notary, and with that a trade-off between security and privacy”.

Instead, he says, with the zero-knowledge proof notary, “we can ensure both the correctness of a transaction as well as the confidentiality of its contents in the consensus process. Furthermore, we also have plans to develop the solution further to offer a privacy solution for historic transactions as well, specifically the chain of provenance which follows a transferred asset.”

Adapt with APIs

Immediate settlement and accurate information management are two attributes corporate treasuries are going to emphasize as they adapt their cash management operations to the new norms arising from the Covid-19 pandemic, says Raof Latiff, group head of digital at DBS Institutional Banking Group. “At DBS, our range of digital solutions enables real-time payments and collections, enhances accuracy of forecasts, facilitates automated reconciliation and tightens management of credit extensions to customers,” he says. “With our range of APIs covering various types of services, clients can also plug and play banking services into their systems and processes efficiently, without hefty investment costs and technical integration. This has provided our clients with improved control over cash flow, optimized working capital and deepened relationships with their key suppliers.”

We selected two DBS quick response (QR) code innovations that simplify both payments and collections. DBS MAX Business2Business facilitates cashless and immediate collections via QR codes from retailers, while at the same time enabling real-time credit confirmation and automated reconciliation. DBS MAX Client Integration is a QR collection solution that allows merchants to generate and display a dynamic QR code on their business platforms to facilitate instant domestic collection and payment capabilities.

First Abu Dhabi Bank’s Global Cash Position mobile app provides near real-time visibility. Clients across multiple banks in the United Arab Emirates and globally can view cash positions worldwide by bank, product and various currencies. The app includes a drill-down capability for viewing individual account balances; while executives can view overall cash liquidity positions across the group in seconds, eliminating the need to log on to electronic banking platforms across numerous banks.

Integration for Opportunity

Bank of America integrated an Apple Watch token app with its CashPro ecosystem, allowing mobile users to pair their Apple Watch with their mobile token to generate a one-time password so they no longer have to jump between the two or carry a physical token. That means treasurers can check balances or approve a payment wherever they are using their Apple Watch. BofA’s users reportedly made $160 billion in mobile transactions in 2019, including a $1.6 billion transaction executed via CashPro.

BofA also made additions to its foreign exchange rate/payment solution, FX Trade and Pay, allowing users to trade via API and settle via Swift, or trade via mobile and settle online, for example, to manage their global payroll and subsidiary funding operations. APIs also helps correspondents make competitive FX payments, BofA says, by enabling payment processors to tap into FX Trade and Pay.

Security Bank Corporation’s’ Salary Advance (Salad) app is a fully automated mobile instant cash facility, allowing customers to access cash 24/7. Employees can request salary advances via text message, and loan proceeds are credited to their payroll accounts within 10 minutes.

Taishin Bank’s direct-link API platform, iHUB, allows the Taiwanese bank to offer new products and services including real-time automatic and multichannel payments. Taiwan has many different payment channels, each with its own checking rules and time limits; iHUB’s API modules enable customers to utilize all of these channels according to their needs. For example, connecting Taiwan’s top three convenience-store payment systems with iHUB via API means customers can produce and pay their bills on their mobile devices at any time. Prior to connecting to iHUB, convenience stores needed at least five days from delivery of a paper bill to reconcile a store account.

Another bill payment solution, this one from Kotak Mahindra Bank, C2B will operate on the back of BBPS-BOU (Bharat Bill Payment System—Biller Operating Unit), Reserve Bank of India’s one-stop payment platform, to offer consumers interbank bill-paying capability. Additionally, Kotak Mahindra’s launch of an updated version of National Payments Corporation of India’s United Payments Interface enables customers to mandate recurring payments. Integrating this capability with BBPS-BOU creates a powerful collections solution for Kotak’s corporate customers.

In solutions such as these, APIs act as a bridge between banks and third-party applications. As APIs share data in real time, they also give corporates a real-time view of their cash position across all of their banking relationships. Since APIs don’t require endless bank logins, they save time in addition to providing quality, real-time cash data. That’s innovation that delivers for both banks and their clients. 

Cash Management Innovators 2020

Abu Dhabi Commercial Bank Virtual Accounts Phase 2 API Integration
Bank of America Enhanced FX Trade and Pay
  Apple Watch Token App
DBS DBS MAX Business2Business
  DBS MAX Client Integration
First Abu Dhabi Bank Global Cash Position Mobile App
ING Zero-Knowledge Proof Notary on Corda
Kotak Mahindra Bank C2B Platform
Security Bank Philippines Security Bank Salary Advance (SALAD)
Taishin Bank Taishin Direct-Link API – Smart Payment & Collection