Real-time cash flow movements and a prompt overview of liquidity and FX assets: using Application Programming Interfaces (APIs) provides entities with improved liquidity management, process control and risk control capabilities. By providing real-time data, the treasury is increasingly becoming a driving force for management. Previously, data required had to be retrieved from various, often non-integrated, systems at the reporting date. APIs can help this situation in the future. Initial applications show that data can be exchanged quickly and without disrupting the flow of information. This also creates new opportunities within entities. APIs not only allow the smooth exchange of existing data, but they can also be used to initiate processes, such as transactions, and thereby improve the customer experience elsewhere in the entity.
This can be illustrated using the example of a European airline. Online travel agencies make a kind of deposit with the airline, which is used to pay for the tickets they have booked. When the airline's accounts receivable registers the receipt of payments, the ordered tickets are allocated. Previously, this allocation was carried out as a separate process taking up the corresponding time and resources. Integrating a Corporate Reporting API into the airline's funds transfer system creates an end-to-end process that eliminates the need for manual intervention and quickly handles the corresponding bookings. At the same time, it provides complete transparency at all times about the status of the transactions, but also about the airline's liquidity and foreign currency positions, which simplifies corresponding dispositions (e.g. FX hedging). Reducing the interfaces also reduces the susceptibility to errors.
This simplified automated processing is also conceivable in other areas. For example, insurance companies could run pending payments that are generally considered legitimate via a pre-authorised API without the need for further approvals. This way, customers would receive their payments more quickly.
The examples show the possibilities of simplified data exchange via APIs for business units outside of the Treasury. Continuous communication between entities, banks and external service providers and advisers is crucial to identify and exploit these potentials. Since there are no blueprints, the customer's pain points are important. What particular requirements are there? What obstacles make implementation difficult? Which processes are cumbersome? Collaboration often makes use cases that were not initially thought of more apparent. Of course, in the end, potential ideas always have to undergo a profitability audit, because tailor-made solutions for each individual use case are not practical. But even standardised solutions can often be adapted to specific requirements.
The Treasury department usually has a good overview of what data is available. If close ties are achieved with other business areas, the Treasury will become a more strategic partner that can deliver what other areas need to succeed as an entity.
Author information
Andreas Gottlieb is Director of Transaction Services at ING Germany. andreas.gottlieb@ing.de
Laurens Schretlen is the Global Head of Product Management for Payments & Collections at ING Wholesale Banking. laurens.schretlen@ing.com
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