54% of CFOs Consider Liquidity and Cash Management Their Top Challenge 

During these uncertain times, the primary task for treasurers and CFOs is to make sure their companies have the liquidity necessary to meet daily obligations and the working capital to respond to changing business challenges and opportunities. 

It’s no wonder, then, that 54% of CFOs cite liquidity and cash management as a top challenge, according to the Corporate Cash Management Playbook, done by PYMNTS in collaboration with Red Hat, Infosys Finacle and Intel. 

Read more: Corporate Cash Management: Banks Put CFOs in the Cash Management Driver’s Seat

“In the context of the pandemic, where it has created a new sort of paradigm in terms of working remotely, being able to have a clear, real-time view of what’s happening with your cash flows across multiple banks, multiple businesses and multiple geographies prove to be immensely important,” Rahul Wadhavkar, head of cash management at Infosys Finacle, told PYMNTS. “And we expect this [cash visibility] not only to remain a top priority for treasurers, but [also] to gain more attention.” 

Visibility, Control and Powerful Tools

These decision-makers need real-time visibility and control over a growing array of banking accounts, and they need powerful tools that can help them make projections in a time of uncertainty. Indeed, more than two-thirds of treasury officials plan to increase their investment in digital technology in such areas as real-time treasury, artificial intelligence (AI)-assisted security and predictive analysis. 

Innovations in cloud computing and application programming interfaces (APIs) have the potential to bring bank-level operations to the C-suite and enable real-time forecasting that outperforms static models. 

“For cash forecasting, the implementation of advanced analytics, including machine-learning techniques using recent and relevant events and data from the bank’s collective client pool, allows corporate treasuries to identify monthly cash flow patterns and seasonal and cyclical variations dynamically, instead of simply relying on historical data patterns,” Vincent Caldeira, chief technologist, APAC (FSI) at Red Hat, told PYMNTS. 

Tools to Manage Multiple Payment Flows 

These tools allow corporations to manage multiple payment flows from wide-ranging sources, including from digital channels, such as eCommerce sites and platforms. That’s important because payment flows are diversifying as companies expand into digital retail and B2B channels. 

They can enable real-time payment and cross-border transactions while also minding FX risks. Payment security is also a vital component of digital cash management solutions, with companies deploying AI and other advanced machine learning to detect and counter fraud threats. 

“In the domain of cash collection, predictive algorithms trained to identify potential settlement risk based on past payment behavior from clients allow corporate treasurers to identify, manage and mitigate these risks earlier to optimize their cash conversion cycles,” Caldeira said. 

Holistic Systems That Can Be Easily Integrated 

Leading technology providers offer these services not as standalone applications, but as holistic systems that can be easily integrated into enterprise resource planning (ERP) software. 

Real-time reports with crucial data points can be seamlessly made available on call, so that anytime someone wants something, their treasury system or ERP system can pull that data from the bank system. 

“We are already seeing this happen in some places, thanks to API technology and the open banking philosophy,” Wadhavkar said. “To be able to do that successfully [is] incredible from a corporate treasurer standpoint.”