Real-time treasury is a combination of four factors - banking, liquidity, technology and payments - working in continuous motion. A key enabler of real-time treasury is application programming interfaces (APIs), which powered the concept during the Standard Chartered Digital Showcase.
The showcase was a demonstration of how innovation was at the core of Standard Chartered's strategy to continuously adapt and transform itself to meet the changing needs of customers in dynamic markets like Malaysia.
The benefit of real-time treasury is the ability to detect, sense and respond to events in a financial reality and respond to it in real time, said Nuno Jonet, global head of product and technology of FinLync.
The value of bank APIs is in the steady stream of data and information that gets fed to the finance systems, which enables real-time decisions, he told participants at the "Real-time Treasury: Myth or Reality" panel session.
This followed two panel sessions titled "Evolving Digital Payment Landscapes: Is Your Business Ready?" and "Modernising Trade Finance and Scaling Up Businesses", which discussed how businesses can leverage digital collections and payments as well as the challenges and benefits of embracing a digital world of trade.
APIs are building blocks akin to Lego bricks, where any structure - from houses to cars - can be built. Similarly, APIs can be assembled to create digital solutions to address specific needs or pain points of corporate clients across a wide range of industries.
For instance, clients with a focus on sustainability could look for solutions that support their environmental, social and governance (ESG) efforts. Agro-commodity clients with an integrated supply chain could incentivise smallholders when produce is sustainably sourced.
"Clients can consume our mobile wallet payment bank APIs that are able to provide payouts to the farmers in real time into their mobile wallets. With that, instant gratification and financial inclusion for the farmers are enabled," said Raji Senthilkumar, Standard Chartered head of digital growth.
"The road to adopting real-time bank APIs is not an overnight task, it's a journey. Typically, corporates get started with simple use cases, such as getting real-time status updates to do away with manual operations, and then embark on more complex use cases that enable their business model.
"From innovative business models to being able to modernise treasury and enable ESG use cases, a myriad of digital solutions is viable with bank APIs," she added.
With APIs, there is a paradigm shift in treasury with data being available on demand instead of having to wait hours or days. As a result, the industry is moving away from reactive treasury to proactive treasury. To enable real-time treasury, there needs to be the digitalisation of treasury operations with synchronous data exchange between corporates and banks in real time, enabled through APIs.
"Corporations may want to validate payees in real time prior to making payments or be able to access account balance information without having to consume end-of-day reports from the bank. All of this can be enabled with bank APIs," said Raji.
Furthermore, APIs also allow for a steady stream of transaction events that allows great customer experiences. Businesses will be able to track payment statuses in real time from the account to intermediary banks and to the destination as well as immediately send their customers receipts for their transactions.
"Once you have the data stream of transactional information that bank APIs provide, you can then do amazing things. For example, with reconciliation you can tag an invoice number, a reference number or an amount in an incoming transaction that you can immediately match against an open document," said Jonet.
"You can then immediately close the reconciliation and not have to worry about it anymore. These are very simple but big value propositions of bank APIs, especially when combined with treasury systems."
When adopting new technologies, doubts can arise in the minds of clients, such as budget, which can be an impediment in moving forward. In a world changing from file exchanges, third-party systems and middleware connectors into core systems that are directly integrated with the banks you are working with, clients understand the value of incorporating technology and how it offsets risks and costs.
"One of the major impacts of real-time treasury is discovering hidden pools of cash that you weren't otherwise seeing because you might not have been getting access to updates and statements," said Jonet.
Leaders of Innovation
Danielle Szetho, Standard Chartered head of fintech client advisory, shared the dynamics and major trends of the banking and fintech ecosystems during the "Fintech and Banks: Competition or Partnership" panel session.
Banks can harness the potential of innovative fintech companies to improve the services offered to their existing clients. As such, the bank has a specialised fintech client segment due to rapidly scaling client opportunities, the ecosystem's buying behaviour and the evolution of business models and complex risks.
"Given the shift of traditional trade across to e-commerce, and the way in which different types of transactions are conducted, the consumer experience is changing. Consumers increasingly expect to be able to make smaller transactions, through an increasing choice of different channels, and have these processed by financial institutions at virtually no cost," said Szetho.
Every market has different fintech regulations, which makes forming partnerships tricky to navigate. Every single business model case needs to be assessed individually to examine whether it fits within the regulations of the ecosystem.
Standard Chartered's strong emerging market cash footprint with 44 cash footprint markets globally, access to 100 clearing systems and connections to 21 instant payment rails allow the bank to navigate different markets.
Moreover, the bank also has leading foreign exchange (FX) APIs and financial market services trading in 100 countries with research staff in 40 countries.
"Many of our fintech partners tell us that our FX APIs and services are some of the best in the market, particularly given the breadth we have in emerging markets," noted Szetho.
As the new economy emerges, Standard Chartered invests in new innovations and capabilities such as virtual accounts, APIs, smart contracts and digital currencies. Standard Chartered aims to continue being efficient, future-proof and safe to enable its clients in Malaysia to develop a competitive edge as they expand and scale internationally.
Investments in core capabilities such as machine learning and process automations to support Standard Chartered's growth with partners in the digital economy have also been made. This allows the bank to deliver new fintech-enabled financial services safely and at a lower cost using advanced analytics, third-party data, flexible architecture and fintech processes.
"We continue to make investments in delivering a technology platform that allows our clients globally to connect on a singular platform that provides automated onboarding, simple and easy-to-use interfaces on client journeys and 24/7 digital servicing," said Stanley Sia, Standard Chartered's managing director and co-head of Asia's digital channels and data analytics for corporate, commercial and institutional banking.
"We've launched our next-generation Straight2Bank mobile app across 48 countries and our platform dashboard capabilities are enabling our clients to make informed and timely business decisions."
Missed out on the insights that were discussed in the first and second sessions? Click HERE