Knowledge is Power in the Bank/Corporate Relationship

By Suzanne Hurt, Bottomline Technologies

With increasing regularity, corporate treasurers are looking to their banking partners as catalysts for driving greater strategic value inside their organizations. In order to serve in this role, banks must transform how they interact with corporate clients, pushing aside long-standing, silo-based approaches to products and services, and embrace the role of true "partner." For banks, the future course is one that no longer emphasizes the collection and aggregation of data, but one in which the analysis, optimization and allocation of liquidity in an increasingly complex global business environment takes center stage.As corporate clients expand their businesses from West to East, banking needs inevitably change, including the need for in-country advisory partnerships. Local, in-country knowledge that provides banking clients with improved efficiencies and faster time-to-market can be a critical component to forging a strong client relationship. As we move full-steam into a global banking environment, future relationships between corporate clients and banks will be predicated on a partnership designed to meet these needs and deliver both tactical and strategic value to both parties.

Up and down the financial supply chain, the role-and importance-of treasury is rapidly evolving. Today, treasurers view, approve and release payments across subsidiaries or corporate groups to better control the timing of payments, maximizing intra-day interest benefits and bundling foreign exchange payments for preferred exchange rates. At the same time, global expansion is forcing corporate treasury to support endeavors into previously uncharted territories, such as trading with new partners, opening new facilities, and supporting the financial and regulatory requirements of in-country trade transactions and cash management. The net result of this simultaneous convergence and expansion of responsibilities and expectations is the challenge put forth to banks to provide clients with a consolidated view of receivables, payables and cash positioning-both locally and globally.

Historically speaking, bank payment systems have existed in silos, based on individual product lines such as checks, ACH or wires. While this set-up has been convenient from the perspective of product development, the ongoing cycle of mergers and acquisitions, and the demands of corporate clients for a consolidated view of cash, have pushed this structural approach to its limit.

An enterprise payments hub, however, offers banks the opportunity to implement a consolidated payments factory facilitating payment origination, workflow and management, and analytic reporting across the entire enterprise, securely via the Web. Through such an approach, organizations can move away from multiple, disparate payment solutions in favor of a single technology platform that supports a convergence of transaction and information reporting activities.

Better visibility and control means access through a single view, or window, into all payments processing, without the need to toggle from one application to another. Having to download individual data files for manual consolidation serves only to disconnect corporate clients from their banks while they manipulate data into information. Delivering visibility and control requires banks to present a consolidated view of credits, obligations and cash positioning in near-real time. And tying this information to debt and investment management tools provides corporate treasury with better cash management, while ensuring funds remain in the bank.

Supporting corporate clients' needs for improved efficiency and better cash management practices also opens the door for payment-related data mining. Trending, comparative data, personalized reporting and dashboards based on job function or role now become possible, eliminating the use of time-consuming individual spreadsheets or reports. The addition of complementary services such as automated invoice matching, for example, alleviates manual intervention on the client's part, providing bank clients with better visibility into cash positioning and enabling banks to introduce a new fee-generating service.

Turning data into information that ultimately allows corporate treasurers to make better business decisions is one of the key value propositions delivered through the enterprise payments hub model. The establishment of a central payments system enables corporate clients to maintain local (subsidiary or business unit) operational autonomy while simultaneously providing central treasury with the visibility and control they need across the entire organization, enabling clients to systematically maximize working capital.

Extended services and new tools for improving corporate treasury are fundamental to any banking relationship. But for both the bank and corporate client to be successful, the technology supporting cash management products and services needs to be flexible and scalable so that new client demands can easily be addressed. In order to become the banking partner sought after by corporate treasurers, banks must be able to turn the vision and promise of the enterprise payments hub into reality.

Suzanne Hurt is VP of banking and financial services with Portsmouth, N.H.-based financial process automation technology provider Bottomline Technologies.