A new white paper from Deutsche Bank outlines how the possibility of a real-time treasury, incorporating instant payments, real-time liquidity management, FX management and cash flow forecasting, is becoming a reality.
‘The road to real-time treasury’ combines views from global treasurers with an examination of how new developments in technology are driving progress, highlighting that systems that enable real-time FX conversion and hedging, as well as real-time cash forecasting, are already up and running.
“Many treasurers see real-time treasury as a long-term vision – nice for the future-gazers, but with no short-term, practical implications,” says Shahrokh Moinian, head of cash products at Deutsche Bank.
There are tangible steps that treasurers can take now to start building their real-time treasury capabilities
“This is far from the truth. There are tangible steps that treasurers can take now to start building their real-time treasury capabilities – whether it’s integrating instant FX conversions and even instant hedges, or establishing instant cash concentration through solutions such as virtual accounts. These solutions can all add value today.”
A Euromoney survey commissioned by Deutsche Bank indicates that demand for real-time treasury capabilities is on the rise, with almost 85% of respondents stating that they would value the ability to move cash around the clock and in real time. Just under 87% believe that 24/7 instant payments will have a positive impact on liquidity planning, forecasting and placement.
“For us, it’s a question of letting the market know that most of the technology needed to power real-time treasury is already available,” says Paul Cuddihy, director of cross product solutions at Deutsche Bank.
“Real-time payments and Open Banking are already being combined to remarkable effect – enabling solutions such as “push” payments, which can reduce transaction fees and eliminate traditional settlement periods of two to three days incurred by merchant acquirers.”
It’s a question of letting the market know that most of the technology needed to power real-time treasury is already available
“The goal is within reach,” concludes Moinian. “Industry bodies have laid the foundations with instant payments schemes and Open Banking regulations, while SWIFT’s recent global payments innovation (gpi) for corporates pilot serves as a readymade real-time treasury solution – enabling businesses not only to initiate and track cross-border payments to and from multiple banks in a single format, but also to integrate these flows into their ERPs and TMSs.
“Whether it’s been noticed or not, the industry has assembled the pieces for businesses to begin constructing their own real-time treasuries. For treasurers, it’s a question of reaching out to their partner banks and working in tandem to piece the jigsaw together.”