North America: Optimizing In Real Time

Automation and new regulations are driving corporates to restructure treasury as never before, creating a key role for tech-savvy banks.

Managing liquidity and easing cash flows are top of mind for corporate treasurers, spurred by both a heightened demand for real-time data and a host of new tax regulations. The best banks are seizing the opportunity to address corporate clients’ need for digital capabilities that make real-time data access more routine.

“As the world moves to real time, corporate treasury departments will need to enable those capabilities within their infrastructures,” says Mike Bellacosa, global head of payments and Treasury Services at BNY Mellon, named this year’s Best Bank for Cash Management. “Effective enablement of real-time tools creates significant opportunities for corporates and their clients.”

The Best Bank for Payments & Collections winner, Bank of America, launched an Accounts Payable Optimization tool in October 2019–which analyzes corporate suppliers and chooses the best payment method to settle outstanding invoices.

Traditionally, determining a company’s end-of-day cash position was a manual process of tallying bank balances across multiple financial institutions. “This routine task can now be undertaken by robotic process automation,” says Michael Fossaceca, managing director of North American Treasury and Trade Solutions at Citi, our 2020 Best Bank for Liquidity Management. “For cash forecasting, an increasing number of corporates have turned to artificial intelligence and/or machine learning.”

Automating the movement of funds to better manage liquidity on a global scale allows corporate treasurers to focus on more value-accretive activities, says Michael Berkowitz, head of North America Liquidity Management Services, Treasury and Trade Solutions, at Citi. “Citi is providing clients with improved rails to move funds around the world, with near real-time visibility into global positions and the ability to optimize cash, interest and payments in a streamlined, efficient way,” he says.

Changing tax laws have also reshaped treasury strategies. In particular, new US rules around overseas earnings “greatly impacted the decadeslong corporate practice of accumulating offshore cash to optimize the tax structure of repatriated funds,” says Berkowitz. In 2019, new OECD guidelines targeted profit allocation to jurisdictions where digital services are consumed. The OECD also published a new Global Anti-Base Erosion proposal. “These tax changes drove businesses to restructure their legal entities, trading models and billing models,” says Berkowitz.

Banks can help clients make cash operations simpler, more global and more digital, Fossaceca argues. “This includes automating client processes by feeding data into, and allowing clients to transact from, their TWS [treasury workstation] expanding our footprint to mirror our clients’ needs and moving to real-time liquidity and instant payments,” he says. “Citi differentiates itself with hybrid ECR [earnings credit rates], virtual accounts and the most global footprint of the US banks.”

Jim Fuell, head of International Global Liquidity Sales at J.P. Morgan Asset Management (Best Provider of Short-Term Investments/Money Market Funds), says while MMF managers are accustomed to working with independent third-party technology platforms, there’s a growing preference for building platforms in-house to allow seamless integration of short-term investments for clients. JPAM’s proprietary portal, which distributes money-market funds, “allows efficient transacting in the fund on the subscription or on the redemption side,” Fuell explains. “If a corporate treasurer is sitting on their accounting or treasury management system handling a variety of other functions, and an investment happens to be something else on the list, they can do it without leaving that environment.” What could be easier?


Best Overall Bank for Cash Management BNY Mellon
Best Bank for Liquidity Management Citi
Best Bank for Payments and Collections Bank of America
Best Provider of Short-Term Investments/Money Market Funds J.P. Morgan Asset Management