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Digital transformation push expanding CFO’s role - Industry roundup: 4 August

CFO’s role expanding as digital transformation urgency increases

The role of today’s CFO is undergoing significant changes and expansions, according to ‘The Evolution of Order-to-Cash’, research conducted by global market analysis and advisory firm IDC on behalf of Billtrust. The study, administered to 622 business executives, highlights the growing importance of CFOs in managing cash, supply chain finance, insurance and commodities while working with limited resources.

Amid ongoing economic uncertainty, 90% of the respondents agreed that the CFO’s importance has significantly elevated within their organisations. This trend holds in the US and Europe, where nearly 90% of respondents acknowledged the increased significance of the CFO. The survey results also highlight the need for CFOs and financial leaders to prioritise digital transformation in the order-to-cash (OTC) process to improve efficiency, optimise cash flow and ensure long-term organisational survival. 77% of those surveyed went as far as to say that digital transformation across the OTC process is critical for their survival. 

The study revealed that 44% of respondents had significantly changed their OTC processes in the past 24 months, including payment management, invoicing and billing, and order management. Notably, 37% of US respondents and just over 50% of EMEA respondents have implemented significant OTC process changes during this period.

The report also found that while digitisation fuels bottom-line results - 94% of respondents stated that manual OTC processes would adversely affect their company’s financial performance - executives struggle to reach digital maturity. Only 15% of respondents have achieved a connected OTC process based on real-time data.

Late payments highlight the urgency of OTC, with 17% of invoices going unpaid by their due date. Additionally, outdated OTC process impact employee experience, with a majority (54%) agreeing that the lack of OTC modernisation has hurt their ability to attract and retain financial employees. Meanwhile, 30% of respondents characterise OTC employee turnover rate as high or extremely high.


Yalla Group opens sustainable account with Standard Chartered

Yalla Group, the largest Middle East and North Africa (MENA) based online social networking and gaming company, has established a sustainable account for cash management with Standard Chartered. The bank launched its sustainable accounts in 2021 to enable its corporate clients to contribute to sustainable development while maintaining daily access to their finances for critical liquidity management needs. 

Deposits in sustainable accounts are referenced against Standard Chartered’s sustainable projects, addressing some of the world’s gravest long-term sustainability threats, such as climate change. Sustainable projects are evaluated based on Standard Chartered’s Green and Sustainable Product Framework, aligned with the United Nations’ Sustainable Development Goals (SDGs) and co-authored with Sustainalytics.

“At Yalla Group, sustainability has always been integral to our corporate values,” stated Yang Tao, Founder, Chairman and CEO of Yalla. “As MENA continues to develop rapidly, we will leverage our deep local insights to broaden our business horizons and incorporate sustainable practices company-wide. Ensuring that our cash management procedures contribute to enhancing sustainability throughout the local and international economies reflects Yalla’s overall direction as well as our profound commitment to the MENA region.”


US RTP network expands Request for Payment availability

Using the Request for Payment (RfP) capability on the US RTP network, the instant payments system operated by The Clearing House, broker-dealers, billers and suppliers can now request a payment from their customers through secure bank channels and receive an instant payment in response from both consumers and businesses. Several of the RTP network’s financial institution participants now offer RfP over the network, providing billers and their customers with a more streamlined way to request and make payments.  

RfP puts the payer in control of the transaction, allowing them to review the RfP and decide whether to pay or decline it. A payer can send an RTP payment in response to the RfP exactly when they want to (24x7) or, depending on the financial institution, schedule the payment for a future date. The payment happens in seconds over the RTP network, with the biller receiving access to immediate and irrevocable funds and the payer receiving immediate confirmation that the biller has received their payment.

Bank of America, BNY Mellon, Citi, Fifth Third, PNC Bank, U.S. Bank and Wells Fargo, which provide banking services to many high-volume corporate billers, are among the RTP participants offering RfP capabilities. Many other financial institutions, such as Bridge Community Bank and North American Banking Co., have also received certification to send RfP messages on the RTP network. Numerous technology providers, including FIS, Fiserv, Jack Henry and Open Payment Network, have received certification to provide Request for Payment to their financial institution customers that are RTP Participants.

Anticipating the expanded launch of RfP, over the past year, TCH has worked with RTP participants to enhance the risk management framework for RfPs to mitigate the risk of potential misuse. TCH and the RTP network are taking a risk-based approach to introduce this capability and the use cases allowed on the network. The initial list of permitted use cases includes B2B, account-to-account, and consumer bill payments.


Brex launches AI-enabled AP solution

Brex has launched payables, an AI-enabled accounts payable (AP) solution, combining enhanced bill pay capabilities and purchase cards. The solution aims to provide the controls required by an AP team to manage procurement spend seamlessly across invoices and purchase cards, with the flexibility sought by employees for business spend. 

The product leverages AI across the lifecycle of an invoice, from receiving and matching to approving and coding, offering real-time visibility and control of expenses globally across cards, ACH and wire. And combined with Live Budgets, Brex’s pre-approved spend controls, the solution is designed to enforce bespoke expense policies per vendor or project and track budgeted versus actuals in real-time.

AP teams get access to high-limit yet controlled purchase cards (P-cards) that offer the flexibility and security of a credit card with the transaction-specific controls required of high-balance spend. P-cards are corporate credit cards often provisioned for specific use cases, including those for departments, vendors, teams, and indirect procurement, such as operational spending. Brex’s P-cards operate on the Empower platform, with the same AI-enabled transaction reconciliation tools provided by Brex’s expense management software and employee credit cards.


Deutsche Börse acquires outstanding shares of FundsDLT

Global market infrastructure provider Deutsche Börse Group will acquire the remaining shares in FundsDLT. The Luxembourg-based company is a decentralised platform based on distributed ledger technology (DLT) for end-to-end fund distribution and processing. The acquisition is expected to be completed in the fourth quarter of 2023 or the first quarter of 2024, subject to regulatory approval.

In March 2020 and via its post-trade infrastructure provider Clearstream, Deutsche Börse Group joined forces with the Luxembourg Stock Exchange, Credit Suisse Asset Management and Natixis Investment Managers to invest in and further develop FundsDLT as the first platform to carry out fund subscription on blockchain infrastructure. Credit Suisse Asset Management and Natixis Investment Managers have contributed significantly to developing the FundsDLT platform as significant clients. 

As a key strategic partner and significant minority shareholder of FundsDLT since its initial stages, Deutsche Börse Group says it has always shown a strong commitment to the company and the relevance of the digital strategy and technology in the fund distribution and processing chain. It has helped the platform to grow, driving efficiency and transparency for Clearstream clients. The former shareholders, Credit Suisse Asset Management, UBS Asset Management and Natixis Investment Managers, remain committed as clients, helping Clearstream drive the use case development further.

The acquisition of all outstanding shares of FundsDLT by Deutsche Börse’s corporate venture capital arm DB1 Ventures will make FundsDLT technology and services a part of Clearstream’s fund service offering. This step will enable the technology to move to a more industrial scale and should complement and strengthen Clearstream’s current fund processing and distribution offering. The integration will drive existing live blockchain-based end-to-end fund transactions backed by Clearstream’s fund processing platform Vestima.


Stripe tool aims to simplify tax compliance for millions of businesses

Financial infrastructure platform Stripe has launched Stripe Tax for platforms, enabling platforms using Stripe Connect to offer their customers the tool as a service. Thousands of software platforms such as Mindbody, Squarespace, and WooCommerce are built on Connect. They operate in virtually every industry and provide millions of businesses of all sizes access to the online economy. Tax for platforms aims to make it even easier for these businesses to sell cross-border by providing a no-code solution for the complex tax requirements that international expansion brings.

The cross-border challenge is enormous, mainly because the tax landscape is constantly changing: last year, there were more than 600 sales tax rule and rate changes in the US alone and an even more significant number of VAT changes in the EU. A recent Stripe report found that 18% of businesses cite tax complexity as why they are not pursuing international expansion.

Stripe Tax, launched in 2021, automatically calculates and collects the correct sales tax, VAT, and GST across more than 40 countries and all US states but has only been available to direct Stripe users, not those using Stripe through a platform. The new offering means that platforms can now offer Tax to the businesses that run on them, allowing them to automatically meet their sales tax, VAT, and GST obligations. Tax also provides platforms with the opportunity to offer a more unified solution, differentiate their offering, and tap into new revenue streams.


Kuwait International Bank unveils new corporate banking platform

Kuwait International Bank (KIB) has announced the launch of its Corporate Online Banking platform for corporate customers. The bank says this launch aligns with its commitment to digital innovation and expanding its modern banking solutions.

The platform offers customers a holistic view of their financial activities, from high-level insights to granular details, to help them make well-informed decisions and take their businesses to new heights. Corporate customers that sign up to the platform can tailor their access to match their role within their organisation by choosing to access relevant features only, optimising their time and allowing them to remain productive. With the Redirect Requests feature, the platform’s users could forward their requests to any superior within their organisation to better streamline the approval process.

The platform’s POS Dashboard gives users a centralised view to track and manage cash flow across all payment methods, including MasterCard, Visa, and KNet. The Hide Amount feature enables users to work in open spaces while ensuring complete privacy and security. The Tracking Dashboard, meanwhile, allows users to view all their interactions with the Bank in one place, while the platform’s Advanced Salary Portal is designed to simplify and streamline any payroll system with features such as file upload and error guidance.

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