If our office is anything to go by, conversation around an office water-cooler is frequently dominated by the latest detective drama. In the UK, the BBC’s Sherlock series has been a prime recent example. Millions of Britons and indeed audiences in 200 territories watched Benedict Cumberbatch link tiny fragments of data and information together to solve broad-ranging mysteries. 

It might surprise you to know that a similar fascination with sleuthing is underway right here in the treasury world. The way in which transactions and payments are stored and processed has become increasingly complex, and has created an opening for ‘data detectives’ to capture the information that really matters, and uncover other detail that could otherwise slip through the cracks. 

Typically, back-end banking systems built in the last few decades are a configuration of multiple processes through which payments and transactions pass. There are currently initiatives underway to simplify the way in which data is exchanged between banks and corporates, such as XML and CGI standards plus SWIFT Corporate access. But data still has to pass through a maze of banking systems. 

Historical limitations

Due to historical payment system limitations still in operation around the globe, truncation of data cannot always be avoided. Therefore, data may be streamlined and cut down to accommodate the requirements of each system so that payments are not rejected or delayed. Like a Chinese whisper, the data that resides within a payment to begin with may not be all there, or may not be exactly the same as the data that arrives at its destination. The final recipient could be left wondering who the payment is from, and what it represents. The newer clearing systems e.g. (SEPA, UK Faster Payments, Singapore G3, etc) now meet the stringent demands of regulations which mandate complete transparency of data disallowing truncation. 

Costs of incomplete or mislaid data

There are clear costs attached to incomplete or mislaid data. Unmatched transactions can be time-intensive to resolve for both the bank and client. With the many new clearing systems in place, accurate payment data is more critical than ever. Take the UK’s Faster Payments Service for instance. Transactions enter clearing and the beneficiary’s account instantaneously. Once it has entered the first phase, there is no recall of funds through the originating bank and payment is final. Any subsequent service enquiry to amend details or recall funds must then be directed and managed through the ultimate beneficiary and their receiving bank, and this can be both complex and time-consuming. 

Expecting their bank to do it

If you cannot source and access all the data around transactions, you forfeit an important tool for developing a deeper insight into the business. Corporates are increasingly aware of this and have ever greater expectations that their bank will provide high quality data in an efficient and cost effective way. Many are asking for better real time data that confirms the delivery of high value wire payments and automates this confirmation, to minimise the risk that non-payment occurs and goes unnoticed. Fuller and timelier information on returned items is another increasingly common request. Better data means that in the case of a non-payment situation, the original payment can be identified quickly and the financial and reputation impact of a late payment to a key supplier can be managed. 

The opportunities

Looking at this from another angle – if you think about the value that data can bring to an organisation then the true impact of lost data is incalculable. There are many instances in which accurate, real time data can help reduce risk and operating expense, for example, when managing stock in a warehouse or overseeing trading partner credit. And who knows what new opportunities are missed because data elements are not linked and connected in the way they could be? 

Bank services

Improved data detection is a critical need that we feel, will quickly become an essential offer for banks too, if they are to continue to add true value to their clients. Many are already developing capabilities in this area. It requires a central super-repository that gives clients access to all the various data elements relating to a single payment transaction that have travelled through the bank. They must also be easily accessible to allow clients to extract their banking data needs in an efficient and standardised format. To enrich the existing data, such super-repositories must also be able to track back like a sleuth, and scan multiple systems to uncover every morsel of data that might otherwise be lost. 

We are fast approaching a tipping point where banks will consider data detection and super-repositories a critical capability for helping clients add value to their own businesses. And who knows, perhaps one day, we’ll see ‘data detective’ added to the job titles of treasury consultants and providers...

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CTMfile take: Psst: It will come as no surprise, BofA Merrill have the leading comprehensive data repository for corporates’s cash management data, see.