Executive Director, Liquidity and Account Solutions Specialist at J.P. Morgan
As a leader in payments with nearly 150 years of experience, J.P. Morgan Payments has deep understanding of the impact of technology on Treasurers and their partners.
This technology, when implemented correctly, can enhance a Treasurer’s ability to perform their core responsibilities, and their value to the organisation.
Michael Brady, Executive Director, Liquidity and Account Solutions at J.P. Morgan Payments, says better technology and data leads to more informed decision making, resulting in better forecasting and improved control.
“At their core, a Treasurer is responsible for ensuring the company has the right amount of money, in the right entity, right currency and at the right time to ensure financial obligations are met,” says Brady.
“Having the right technology infrastructure can unlock the data and insights necessary to more accurately view current cash positions and forecast future cash needs. Ultimately, this frees up working capital, improves FX hedging, and overall capital efficiencies. Additionally, technology can reduce operational risks associated with manual processes and, ultimately, free up operation and financial resources.”
The key phrase there is “the right technology”. With so many solutions on the market, Treasurers can easily find themselves swamped with disjointed systems that lead to unnecessary complication and inefficiencies.
Brady backs this up, saying that the issue J.P. Morgan Payments encounters most often is fragmented platforms that lead to decentralised cash positions globally with minimal visibility.
Application Programming Interfaces, or APIs, allow applications to speak to one another as an intermediary, and can therefore support digital transformations such as real-time payments and real-time visibility into cash positioning. These innovations can be good news for both partners and treasurers, but they do require Treasurers to have a foundational understanding of APIs – as well as which ones are most useful when it comes to meeting business goals. Treasurers need to be able to communicate confidently about APIs with technology leaders within the organisation.
“The world of Treasury has shifted and is rapidly moving towards real-time to reduce capital buffers and create operational efficiencies. APIs are a tool that is driving this evolution,” says Brady.
“In a rapidly changing economic environment with elevated rates, the benefit of having real-time insights into cash positions is invaluable, and the flexibility the APIs provide will be transformative.
“APIs are really the present and the future. Where we see the biggest challenge is with the understanding of APIs and how to maximise it’s potential in a company’s treasury transformation journey.”
Historically, companies had to open hundreds if not thousands of accounts to achieve the level of visibility that APIs can deliver. The improved visibility not only creates natural business insight benefits, but also limits idle cash as cash concentration is native within virtual structures. Lastly, virtual structures can significantly reduce the burden of cash application and manual reporting processes.
“The key with virtual solutions is creating a flexible structure and having a banking partner that continuously invests in their platform as technology and adoption of virtual solutions evolve,” says Brady. “Here at J.P. Morgan Payments, we have built our virtual solutions platform in-house, which makes it more flexible, and we are regularly developing new features to suit our clients’ needs.”
Treasury transformation is not a one-size-fits-all, one and done approach. It is important to not just think of what you need to solve now, but rather to consider what is the art of the possible, and work backwards from that.
Read the full story HERE.
“It’s about turning it beyond building that market awareness; beyond that education to actually go after tangible, measurable, replicable claims”