During the times of fast-changing geopolitical events and turbulent global economies, a static, siloed approach to treasury management no longer cuts it. It’s not just a strategic disadvantage anymore – it’s a critical failure point that restrains organizations from quick reaction, which is now more important than ever. An advanced cash management solution is necessary to move treasury management from reactive to proactive approach.
Where does traditional treasury management fall short?
The main problem with traditional treasury management lies in its systematic fragmentation. A multinational organization, for example, will have its cash spread across dozens of bank accounts, each with its own portal, security protocols, reporting formats, etc. This means treasury teams have to collect and report all data manually, considerably slowing down strategic decision making. Not just that, by the time a consolidated cash position is assembled in spreadsheets, it may already be outdated.
This lag introduces a lot of risks. Critical liquidity and hedging as well as other investment decisions have to be made using an incomplete financial picture. This often leads to either excess cash buffers or overborrowing, due to acting based on outdated information. It’s essentially a constant catch-up with the historic data, rather than looking ahead on real-time changes.
API-driven cash management
The solution to such fragmentation is, of course, getting rid of it through centralisation. This was always easier said than done… Until now. Organizations can now move from these isolated portals into a unified platform with the help of technology powered by APIs (Application Programming Interfaces). What this means is that the solution does not replace your actual network of banks – instead, it acts as a connector between them. It centralises all financial data from different banking partners, where you can view your account balance, transaction data, relevant statements and any other information in a single, cohesive view.
In addition to this, API-based cash management solutions typically mean you can integrate them into already existing IT infrastructure, such as an ERP system or other business management software. As such, it’s particularly quick and easy to implement (potentially under a working week), with no need to invest into a new IT environment. From there, you can immediately start viewing and consolidating all of your financial movements from different platforms in real-time.
Process optimization
Advanced cash management tools offer a range of benefits, however, process optimization is one of the most significant. First of all, true cash visibility provides more than just a consolidated balance; it offers the ability to analyze your financial positions with extreme precisions. Treasurers can view a report on cash based on different segmentations, such as legal entities, currencies, geographical locations, and other specific factors. All accessible instantaneously, in one place.
This level of detail completely transforms cash from a simple operation asset into a strategic tool for optimizing the company’s financial health. From actively managing any risks to building cash flow forecasts, the processes become far more accurate and efficient than those built on historical data.
Moreover, with traditional tools, you simply cannot automate what you cannot see in front of you. This is where real-time data feeds are another huge advantage, bringing streamlining capabilities into treasury management. For example, managers can use rule-based logic to automate the value chain or, perhaps, intelligent payment routing based on currency and balance.
Cash management solution providers
The market for advanced cash management solutions are diverse, with different providers offering different strengths. Here are some of the major players in the sector today:
- Prometeoapi: is an API-first platform specializing in secure and agile consolidation of financial data with the same format, from any bank. Offering integrations in as quick as 4 working days, their solution is a fast-track way to eliminate manual processes and optimize treasury management in organizations of all sizes.
- Trovata: A modern, API-driven platform focused on automating cash reporting, analysis, forecasting and other key tasks by leveraging open banking. Trovata holds a strong user base in North America and Europe, but offers their solutions worldwide.
- Stripe Treasury: Created by the well-known financial infrastructure platform, Stripe, the Stripe Treasury product aims to provide a scalable solution for embedding your data in one platform. It’s a banking-as-a-service API based on a modular approach.
- Kyriba: A global leader in comprehensive Treasury Management Systems (TMS), Kyriba offers a whole suite of API-driven modules that cover cash, risk, payments and supply chain finance.
- HighRadius: With a focus on AI-powered, order-to-cash and treasury solutions, HighRadius provides an API connector for existing ERP systems. Their specialty is in automating complex cash applications for large enterprises.
Future-ready treasury management
There are many uncertainties in the world right now but, if one thing is for sure, it’s that businesses will only need to become more resilient and more agile to survive. An advanced cash management solution is no longer something organisations acquire to simply better their processes. It’s an essential, strategic tool that allows them to make financial decisions faster and with greater confidence.