Finding the Best Cash Management Solutions in the Fintech Ecosystem


Finding the Best Cash Management Solutions in the Fintech Ecosystem

27 Feb, 2019

With an ever-increasing number of fintech solutions for treasury operations, choosing the right solutions to fit corporate treasurers' organisations is becoming harder.

The rapid growth of financial technology companies (fintechs) has been both a boon and a challenge for corporate treasurers: a boon, because today's solutions can streamline processes and make the corporate treasurer role much more efficient and strategic; and a challenge because of the sheer number of options available.

In a world with thousands of specialised solutions, how do time-poor corporate treasurers go about selecting the right ones for their cash management needs? Which vendors are reliable? Whose products will best fit their organisation and work well with current and future IT systems? And which will help them in the next three-to-six months, rather than five to 10 years down the road?

To answer those questions, BNP Paribas Cash Management set up a Fintech Lab two years ago to screen and map out a fintech panorama across Europe, to determine which innovations could bring value to the treasurer's role, with a particular focus on working capital, payables and receivables. At the same time, the bank developed several fintech acceleration programmes, taking a collaborative approach to help us build agile partnerships with fintechs and bring co-created products to our clients through our ecosystem.

Vincent Marchand, Head of Cash Management Fintech Lab at BNP Paribas, shares insights to corporate clients in Singapore

As we roll out our Fintech Lab expertise from Europe to Asia Pacific (APAC), it is worth looking briefly at what we have learned: which technologies look to be the most promising, which partnership models fintechs are adopting with banks and other ecosystem players, and the due diligence needed to determine which solutions will add the most value.

Differing maturity levels

The first rule of thumb is practicality: New technology should address immediate treasury needs. This means working with reasonably well established fintechs that have demonstrated their ability to scale and are already serving live clients.

Following the path of practicality also means excluding some technologies that may be promising going forward, but which have yet to deliver scalable products. Among the solutions that we categorise as maturing or worth monitoring are blockchain/distributed ledger technology – which has shown its value in areas like logistics and trade finance, but which is yet to do so in cash management – as well as machine learning and natural language generation.

Areas that are ready to implement, on the other hand, include application programming interface (APIs), cloud services, data management, artificial intelligence (AI) and robotic process automation. Many of these are interconnected and will build upon each other, bringing synergies and greater efficiencies in future.

Application in practice

Instead of looking at the fintech world as a whole, which would be a daunting task for time-poor treasurers, we assess fintech solutions through the corporate treasurer's eyes and key priorities to ensure the solutions being created are practical and relatively easy to implement.

Breaking down the corporate treasurer's digital journey into byte-sized solutions that address specific needs has helped us map out a practical fintech ecosystem based on how innovations will improve specific processes and resolve pain-points, by answering some frequently asked questions, such as: 

  • "How can I improve my working capital?" Treasurers typically have a fragmented view of liquidity and positions, and they spend time reconciling information across different accounts. They often cannot make use of internal data owing to a lack of tools to access and exploit it. One solution is Cashforce, a state-of-the-art forecasting tool that helps to improve control of working capital by providing real-time visibility of cash flows from all data sources, across different banking partners and various ERP solutions.
  • "How can I improve my international operations?" Reconciliation of payables and receivables remains a major headache for most companies, especially those with international payables and receivables. Duco Cube, a cloud-based self-service reconciliation tool, aims to resolve this paint-point. With an intuitive front-end that allows corporates to reconcile any type of data in any format, Duco Cube uses an algorithm which has been tested for capital market operations.
  • "How can I achieve effortless daily customer service?" Another common problem treasury departments face is tedious manual, paper-based processes such as audit confirmations which often leads to siloed views between the company, the auditor and the banks. A solution like allows audit confirmations to be obtained through secure digital communication channels. Auditors are able to use a digital platform to provide fast, secure control of data requests and responses, and to ensure easy validation of information like audits.
  • From Europe to APAC – and back

Treasurers in Europe and APAC share many grievances, including a need for transparent cashflow forecasting to ensure a better grip of working capital inputs and outputs, more tools to combat cyber-security threats and fraud detection, more transparent pricing of internal operations, and improved reconciliation tools. 

Payment systems are being revolutionised

Additionally, the pace of technological change has had a profound impact on the treasurer's role: the nature of business is changing fast, and much of it has shifted online. Payments systems, for instance, are being revolutionised. "As the speed of payments becomes instant and delivery is near-instant, the onus is on the corporate treasurer to select which technology to adopt to keep their company relevant," states Vincent Marchand, Head of Cash Management Fintech Lab, BNP Paribas.

Linked to that is efficiency in business processes such as reconciling accounts receivable, where speed has become more pressing. Where previous ERP-based solutions could not solve the 'last mile' problems of slow implementation, high cost and lengthy transition time, nimble fintech solutions provide rapid, seamless integration that allow treasury to perform its internal processes much faster.

One important area for our clients is the use of platform ecosystems that provide treasury-linked solutions, with salespeople able to generate invoices that link immediately to accounts receivable, and with automation in place to record invoice payments and link instantly to the cashflow function. Those ecosystems make the treasury function more efficient, freeing up the division to focus on delivering more value-added.

"In an environment where the speed of innovation is accelerating and regulatory requirements are increasing, businesses need to adapt constantly. Fintechs bring solutions that are central to this process. The question remains, of course, how treasurers in APAC can select the right partners," said Mahesh Kini, Head of Cash Management, Asia Pacific, BNP Paribas. As we have seen with our European clients, focusing on pragmatic technologies likely to bring short-term benefits, improving specific aspects of the customer journey and adopting the optimum usage model have proven to be an efficient approach to fintechs. This allows corporate treasurers to save time in a range of automated processes and to get strategic insights that will help transform their role within their organisations, into the corporate treasurer of tomorrow.

Head of Cash Management Fintech Lab, BNP Paribas
Head of Cash Management Asia Pacific, BNP Paribas
read more

Learning to «coopete»

Big companies and startups have a lot to learn from each other. Working jointly, they can enrich the market place with new valuable products and offerings. Pointing out emerging models,...

Co-creation, clients and Blockchain: MyCollat

Onerous paper-based reconciliation processes have long posed a challenge to clients and banks. How might co-creation and fintech provide the answer?

Excellence in Export Finance

Yasser Henda, Global Head of Export Finance at BNP Paribas, explains how ECA financing is evolving globally and how his teams have managed to remain leaders in the market.

Weekly ECM update

Dear Reader, 10 drone strikes into Eastern Saudi Arabia added a new and urgent risk factor to capital markets on Saturday. Local exchanges that were open today registered modest reactions (KSA's SASEIDX down 105bp, others...

BNP Paribas named Aviation Finance House of the Year

BNP Paribas was honored by Airfinance Journal as 2018 Aviation Finance House of the Year for the first time.

Exceptional harvest for BNP Paribas at the “Global Transportation Finance Awards 2018

BNP Paribas distinguished as "Aviation Finance House of the Year" and for the "Shipping Green Loan of the Year", as well as 10 other major Awards.

The future of alternative fuel-powered cars

The automotive industry is under increasing pressure to reduce carbon emissions originating from fossil fuels. What are the alternatives to fossil fuel passenger vehicles?

Cobalt and Lithium, the key to a successful energy transition?

As many are becoming more conscious of the importance of sustainability, companies are developing new technologies to accompany this change.

Hydrogen, an enabler for deeper decarbonation of the energy mix?

The growing importance of hydrogen for the smart city of tomorrow.