The phrase real-time treasury is not new. In fact, many organizations think they are real-time yet are still using batch processing. So what is real-time in practical terms? Real-time treasury is when banking, liquidity, technology and functional systems, like payments, operate in a continuous motion. This continuous motion creates an always-open channel connecting your accounts to the financial systems you use, providing you with an unparalleled level of insight, clarity and control over your financial operation.
Real-time treasury enables everything from open banking to harnessing AI to improve decision-making. It’s also about integrating all these initiatives to create smooth processes and maximize the value of your data. In a nutshell, real-time treasury enables your organization to harness the power of the data already residing in your accounts and core systems, further optimize liquidity management, and makes it easily and immediately consumable so that you can make the best financial decisions for your business – on demand.
How can you tell if you are really real-time? Review the comparison below:
Real-time treasury delivers functional benefits, including:
Gain confidence in your cash balance information. Bank API connectivity means you can instantly refresh information on your currently available balances and make sure enough cash is available to process payments and confidently make the next investment or borrowing decision.
Connect directly and harmonize data across all your banks via multi-bank APIs and gain comprehensive visibility. Host-to-host bank connections and individual bank portals do not directly embed your account data in your ERP as bank API connectivity does. By eliminating the need for SWIFT, Host-to-Host, or bank portals, treasury can turn a previously complex connectivity challenge into a simple plug-and-play process. You get rid of bank files and middleware but get all the connections you need, plus real-time data and expanded data points, without having to manage the connectivity.
Avoid bottlenecks due to incidents and exceptions while reducing fraud risk. With transaction information flowing via APIs, instantly updating the data, you can detect questionable transactions as soon as they happen instead of finding out about them the next day. Any exceptions can be handled in the moment since your data is fully auditable, transparent and updated in real time. In addition, enforcing tight-access management controls, implementing automated workflows, and reducing the number of hands a payment touches can all reduce the risk of both internal and external fraud.
Instantly refresh stale data. Rather than relying on out-of-date information, you can keep data fresh using bank APIs—meaning you always know how much cash is on hand and what your financing options are. This is vital in times of crisis, when it’s essential to keep management and the Board fully up to date with the company’s financial position on a day-by-day basis.
Reduce manual labor, decrease errors, and improve the decision-making abilities. Getting data from all sources in real time reduces manual labor, decreases errors, and improves the decision-making abilities of treasury and those who depend on it for forecasting and other crucial operations. Because data is instantaneously available – and easily consumable in a central location – treasury teams can focus on optimization and addressing, in real-time, market needs for their business rather than the time-consuming focus on data collection inherent with legacy and middleware systems.
Access enriched data points you can’t get anywhere else. Because the data connection is always on between your banks and ERP, the data you receive is richer in the data points it delivers and not limited to what is in a traditional bank file. Any data available from the bank via its API is instantly available to you and can be cross-purposed with the data housed in your ERP.
Get total integration between ERP and bank data. Your ERP and banks hold the core critical information on which your business runs. With a direct connection using APIs, you are able to fully maximize this data by having a continuous flow of the most up-to-date data at all times.
Improve KPIs with up-to-the-minute information and details. While dashboards showcase data, real-time and always-on data gives treasury the ability to see, in greater context and detail, the information behind the dashboards, delivering higher value for improved decision-making.
Unblock work for the entire treasury team. Treasury and finance professionals want to advise the business, instead of being stuck collecting data for hours every day. With real-time total data integration and the reliability of APIs, your team can focus on the value-add activities that will advance your business. No more time wasted on labor-intensive activities that don’t drive value for your business.
Gain on-demand decision making capabilities that drive forward-facing results with predictive analytics and AI. Your team will no longer be stuck using stale data that only allows them to deliver backward-looking results. Real-time delivers the most current and accurate data available from which to make decisions.
Drive a brand-new level of analytics for decision-making. By joining new tables of data between ERP and bank data via real-time, your team will be able to deliver actionable results based on the most current and accurate data available.
Improve visibility of bank fees. With more visibility of bank fees for your cross-border payments, you can identify the total cost of a transaction with each bank. This transparency puts you in a better position to negotiate with future partners.
Accelerate payments by revamping manual processes. By processing payment requests faster with automated approval workflows, you can speed up the time it takes to pay those invoices. This can improve relationships with your vendors, who may be more willing to extend credit or offer a better deal in the future.
Optimize security with end-to-end encryption. Because the core data resides in your ERP and Bank systems of record and the applications are embedded, the data is protected by the security measures in place for each of those systems. The security protocols for your ERP and for your bank data eliminates the need for the “extra” security you would need if you were using middleware to access the data. It’s a direct connection that sits behind the firewalls of each of these core data houses.
Turn maintenance into something you don’t have to worry about. Because apps are embedded into the ERP and directly connected to banks via APIs, real-time eliminates the need for the kind of maintenance project traditionally found in system updates. Updates are “lightweight” because they don’t impact the systems of record core data on either side.
Create always-on, instant bi-directional data. Establishing a real-time treasury means turning on data that flows bi-directionally between your ERP and Banks – all of the time. There is no “push-pull” of data that you must enable, rather, the data flows continuously between the two systems without any manual intervention. You are continuously up-t0-date with the latest, most accurate information at all times.
Refresh data on-demand anytime; no more waiting for bank files. Does anything more really need to be said? Data is available at all times whenever you want it, eliminating the need to wait for bank files to arrive. You work on your schedule, not the bank’s.
Read more about real-time treasury in our free ebook: