Introduction
As a corporate treasurer, you’re looking for every advantage to keep operations running smoothly and efficiently while optimizing your cash and retaining your top talent. Technology is often your most powerful ally in all these endeavors but knowing how to maximize its potential requires expertise.
Bank APIs are the digital workhorses that allow companies of all sizes to quickly and accurately juggle complex treasury tasks — with the right information at their fingertips, treasurers like you can make faster, more-precise decisions than ever before. In this blog post, we’ll explore 15 use cases for bank APIs to provide a better sense for how treasury teams across the globe are putting corporate bank APIs to use.
Examples of How Treasury Uses Corporate Bank APIs
In the hands of the right people, any tool can have countless uses. Bank APIs are no different. Below is just a sampling of the innovative ways that treasury practitioners around the world are actively using bank APIs today:
- Confirm payment before products are delivered. The finance team has integrated balance and transaction bank APIs, and has provided appropriate limited access to this information to their showroom colleagues. Showroom colleagues can now check whether a client has paid before providing delivery of the car. Similar to the car manufacturer, a furniture retailer checks real-time bank balances and transactions data to ensure customer has paid prior to delivering furniture.
- Parking fee collection. Similar to a request-to-pay service, bank APIs permit the company to request a payment in exchange for a parking space, preventing clients from cancelling their payments, but still be able to park their car over a weekend.
- Increase automation for debtor limits. This organization has the goal of automating every process in their back office, including actively managing client credit limits. Bank APIs allow them to assess debtor limits in real-time in order to maximize sales.
- Maximize Afternoon Receivables. To avoid idle cash sitting overnight, one of the world’s largest retailers wants to view money coming in throughout the day, and particularly in the afternoon. Bank APIs enable treasury to view up-to-the-moment account balances and transactions, and refresh bank data on-demand. The retailer can maximize this cash same-day, rather than waiting for a stale bank statement to arrive.
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- Improved decision support and confidence for hedging. One of the world’s largest industrial companies uses bank API connectivity to improve their hedging decision-making in two ways. With bank APIs for balances and transactions, they can access up-to-the-moment account balances. This allows the team to make faster decisions when prices are in their favor, and have complete confidence in the balance of the account being used to fund the purchase.
- More precise short term cash forecasting and reduce bank fees. A multinational industrial manufacturer uses bank APIs combined with JPM’s stable coin to achieve real-time settlement of intercompany transactions, all of which improves short term cash flow forecasting and avoids costly intermediary correspondent bank charges.
- Eliminate login headaches. A Scandinavian technology company avoids the hassle of logging into bank portals and tokens by using bank APIs. The bank APIs pipe their bank data directly into their TMS, eliminating the need to login to another system to access the data.
- Improve NPS and client retention. A global leader in the insurance industry wanted to boost NPS and retention ratings by addressing late claim settlements. By using bank APIs, they can send claim settlements faster including leveraging real-time payment networks and domestic payment networks, track the payment status from start-to-finish to ensure successful delivery, and offer clients more ways to receive their settlement, including PayPal, Asia’s Grab Wallet and others.
- Reduce the cost of messaging format maintenance. A large multinational wanted to reduce the costs of maintaining varying standards and bank connectivity channels. With a corporate multi-bank API aggregator, they’re able to easily connect to pre-built bank APIs and all the connectivity and messaging needs are standardized, automatically.
- Increase the rate of automated reconciliation. A global metal producer had the goal to fully automate 95% of their reconciliation, leaving only 5% of transactions needing human intervention. Pairing bank APIs with SAP-embedded treasury apps and artificial intelligence achieves the rate of automated reconciliation needed to satisfy the KPI, but also speeds up the reconciliation process since bank APIs deliver transaction data same-day, as transactions occur.
- Simplify bank account busy work. A midsized American insurance company uses bank APIs to slash administrative tasks for their bank accounts including renaming accounts, and opening and closing bank accounts.
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- Eliminate manual keying in of payments, reducing errors and saving time. An organization with a massive volume of international payments leverages bank APIs to avoid entering the banking system to key in all the payments, which saves time and reduces errors. Instead, bank APIs allows treasury to initiate payments in real-time – individually or in bulk – directly from their ERP.
- Instant payment failure alerts. A multinational retailer sent a funding request on a Friday afternoon. The payment failed, and failed again when their treasury workstation tried to send the payment a second time. By the time the failure alert was sent, the team member was already offline for the weekend. The treasury team arrived in on Monday morning to a massively overdrawn bank account and a mountain of overdraft fees. With bank APIs, this organization knows instantly when a payment fails, rather than finding out days (and many wasted dollars in fees) later.
- Automate FX hedging. A European travel company uses bank APIs to automate the FX hedging of individual travel bookings.
- Leapfrog outdated bank connectivity technology. A global technology company had been relying exclusively on bank portals. The team was on the verge of selecting a treasury workstation when they realized that it used entirely host-to-host bank connectivity. Understanding that bank APIs are actively rendering host-to-host obsolete, they quickly pivoted. Rather than spending time and effort implementing a bank connectivity dinosaur, they leapfrogged directly to bank APIs.
