Cash forecasting

Corporate Treasury Payment Service Provider Relationship Management

Report date: 
24 Oct 2023

Commentary

“May you live in interesting times” goes the old Chinese curse. Whether we are cursed or not, we are certainly living in interesting times.

This call focused on one area of the information revolution – Payment Service Providers

(PSPs), but it was an illuminating insight into the challenges treasurers face. The multitude of payment methodologies and PSPs are forcing treasurers to deal with many different approaches, companies and formats. Today digital sales are mostly for B2C transactions, but this is spreading to B2B as business models evolve.

As treasuries move to APIs, bots and other less structured forms of communication, everyone will face the issues discussed in this report (the full 18 page report is available to premium subscribers - enquire here for details).

The biggest issues participants raised are:

  • Ownership. Treasury clearly owns the relationship with traditional banks. But many treasurers find that marketing or other functions (notably IT) sign up the company for a PSP relationship, and then leave it for treasury to resolve the issues. Participants are beginning to lay down rules for approving new relationships, usually involving marketing and IT.
  • Management system. One participant has a rigourous process which involves marketing, IT and treasury to make sure all aspects are covered.
  • Local vs global. Some PSPs are global, while others are regional, or purely local. The purely local ones are usually left to local or regional teams to manage, while global ones are typically managed from HQ. In some cases, only local options are available: this is a challenge for centralised treasuries.
  • Global PSPs. The main providers mentioned were PayPal, Ayden and WorldPay. No-one finds they can
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Topics covered in this report: 
PSP, API, Cash forecasting, Risk - counterparty, Virtual accounts, Receivables

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AI & Robotics in Corporate Treasury

Report date: 
9 May 2023

Commentary

This call was organised in the midst of media hype about AI (Artificial Intelligence), with several banks having banned the use of ChatGPT, and highly convincing fake videos being created and going viral. The first question was whether our members share the banks’ concern over the danger of tools such as ChatGPT running out of control and executing highly credible frauds. The answer was “No” - in the sense that it was not on anyone’s radar screen.

The second question was about the adoption of robots to automate treasury processes: these typically execute pre-defined processes, with no decision-making function. There are high levels of interest in this, and increasing levels of adoption. 

AI is of interest for areas such as forecasting, where an increasing number of applications are available which look at historical data and use it to predict future patterns. However, only one participant is currently using it for cash forecasting. But:

  • Banks are increasingly using AI to screen transactions, and highlight unusual ones. This is good – but one participant saw valid, but unusual, transactions fail to execute on time as a result.  
  • AI’s ability to handle large data lakes or oceans inside companies is a positive - but it is hard to be sure all the relevant data has been included. 
  • One participant is concerned that the questions being asked on ChatGPT could potentially be tracked, leading to confidentiality breaches.
  • The same participant is also concerned that the inability to track and verify the source of data in this tool could lead to unintentional copyright infringements. Usage rules are being put in place to manage these risks.

On the other hand, most participants are actively using robots for various tasks:

  • Allocation of
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Topics covered in this report: 
Robotics, AI, Cash forecasting, Technology

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