Nordics: Realism And Relevance

Technology and APIs will be critical to the future of treasury and cash management, as digital reshapes corporate finance.

The Nordic region is renowned for innovation and an open approach to commerce, so it should be no surprise that Nordea, winner of both our Best Bank for Cash Management and Best Bank for Payments & Collections awards, has championed open banking and the use of application programming interfaces.

“API is definitely a very important technology making a big impact in cash management,” says Erik Zingmark, head of transaction banking at Nordea. “Already we are seeing integration, implementation and time-to-market of solutions happening faster, and the pace will only increase. Corporates will also be able to implement solutions that complement the existing larger solutions they already have in place. Just five years ago, that would have been too costly and too complex to even consider.”

Zingmark singles out artificial intelligence and robotics as critical areas of innovation for the treasury. “Implementing AI incrementally to support the more simplified and accurate treasury processes will undoubtedly lead to increased effectiveness,” he says, “enabling higher-quality output with fewer resources.”

He also looks forward to AI macros based on financial policy—that can, for example, monitor foreign exchange and interest rate markets to make sure a specific mandate is followed around the clock and that financial results are optimized.

Danske Bank, the Best Bank for Liquidity Management, implemented a solution from Fluent Trade Technologies to remove latency from its in-house pricing engine and connectivity, with further plans to roll out white label passive and aggressive algorithms to ensure smarter execution of orders this year.

Making sure the corporate treasury stays relevant to the company’s strategic dialogue remains a challenge, however. “Being relevant means being part of the strategic decision-making process,” Zingmark says. “If the treasury department is not able to advise the company and also understand business opportunities and challenges in a digital context, it will not be involved.”

To play a strategic role, treasury must be able to leverage all the new technology that is becoming available—understanding which technologies to prioritize and invest in, given the company’s strategy. “We all know about the potential of blockchain, open-banking APIs and AI,” Zingmark says. “It’s critical to figure out which one is really relevant for your company.” Corporate treasury departments are still challenged, he adds, to find the liquidity management arrangement that offers the strongest straight-through processing at the lowest cost.

Banks are central to improving treasury’s overall cash-management performance by advising clients on technology. While early movers can already choose from a number of new solutions, Zingmark warns that there also might be risks in moving too fast. “The bank’s job is to help the treasury department define the technology it needs,” he says. “This requires that both banks and treasuries develop their technology skills and competencies, making sure they ask the right questions.”

This is especially true for cash-strapped small and medium-size enterprises. Growing domestic demand creates opportunities for Nordic SMEs, which rely on banks to help them navigate the road to growth. Simplicity’s Likviditet money market fund, for example, provides a very low risk at a competitive rate. Corporates can be assured that Simplicity’s funds exclude companies that exploit fossil fuels or the weapons industry.

Nordea sees its role as helping and advising treasury with the options at hand, based on a strong understanding of the company’s situation, its finance policy and the mandate it hands to treasury. “We often talk about understanding the company, but it’s also very important to understand the specific role and mandate of the treasury,” says Zingmark. “By understanding both aspects, you can avoid overshooting targets or proposing actions that will never happen in the company.”


Best Overall Bank for Cash Management Nordea
Best Bank for Liquidity Management Danske Bank
Best Bank for Payments and Collections Nordea
Best Provider of Short-Term Investments/Money Market Funds Simplicity