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Industry roundup: 12 February

Treasury webinar to get FX risk management in focus for corporates

Strategic FX risk management has never been more important, following a year of volatility from events such as COVID-19 and Brexit. A treasury webinar next week from AlgoDynamix is offering treasurers the chance to learn how to go quantum in currency hedging and uncover vital trends in FX risk management. 

The webinar, co-presented by long-time CTMfile contributor Ken Lillie from Lillie Associates, will look at how using the AlgoDynamix directional forecasting analytics can enable better client decision making processes. It will also cover the age old treasury pain point of how to reduce hedging costs - something that is even more important during these uncertain times, and how these analytics can very quickly be put into place by treasurers.

The importance of treasury best practices in FX risk management was highlighted last month with news that Swiss companies were not hedging currency risks more frequently, despite the COVID-19 crisis.

Credit Suisse surveyed over 1,000 Swiss companies on their economic and exchange rate expectations as well as their approach to currency risks. The companies that did undertake hedging last year had an average hedging ratio of around 60%. The majority of respondents have not increased their hedging ratio since the start of the COVID-19 crisis, with more than one-third stating that their decision not to do so was due to uncertainty about future cash flows (14%) or was intended to maintain their flexibility and to allow them to benefit from heightened volatility (22%). Companies likewise showed restraint when changing their foreign currency cash holdings, with 72% of those surveyed not making any changes at all. The figure for the export sector was slightly lower at 65%.

"Given the ongoing economic uncertainty and major importance of the euro and US dollar for Swiss corporates, it is worth noting that only 40% of companies hedge their FX risks," stated Claude Maurer, head of Swiss Macro Economics & Strategy at Credit Suisse.


Trovata launches multi-bank data lake platform-as-a-service

Trovata has announced the launch of its Enterprise Treasury Cloud product - a fully managed data lake with a developer portal for bank balances and transactions at scale. Enterprise Treasury Cloud is designed for enterprise business systems or IT teams to drive digital transformation and automate backend support for accounting, finance and treasury teams internally. The new platform follows a year-long development effort and pilot with the treasury and business systems (IT) teams of global payments leader, Square.

"As wholesale banking APIs have become increasingly available, large enterprise companies are having to step up to significant challenges in integrating and driving automation and internal data platform capabilities across their ecosystem of services," said Trovata CTO, Joseph Drambarean. "With our new Enterprise Treasury Cloud, Trovata brings to life banking data from a complex network of global institutions into a common language providing resilience, scalability, and extensibility."

The solution provides a treasury reconciliation module with automated reporting and alerts, analytics and real-time processing, large volume data searching and indexing, and expansive metadata. A manifest API and infrastructure monitors the data environment for synchronisation issues with their internal databases. The firm says that IT organisations can fast track data transformation initiatives by leveraging pre-built integrations with existing tools in their finance ecosystem built on custom data mapping provided by Trovata. Engineers can leverage the developer experience to register applications with the Trovata Platform, entitle data access to specific accounts for each application, entitle API access to specific APIs for each application, review API documentation, and utilise code gen tools for rapid onboarding.

"The challenge of accounting for the variability and volume of bank balances and transactions across our network of banking partners proved to be unique as we embarked on data transformation of our internal services," said Square's Treasury and Business Technology team. "Trovata stepped into the gaps by providing an end-to-end Platform to be used by our internal stakeholders and created opportunities for further innovation built on the power of Platform APIs."

By leveraging Trovata to access banking APIs, Square's stakeholders, including accounting, treasury, and engineering teams, can benefit from a centralised data lake and forgo routine maintenance and lengthy implementations. Bank data is aggregated in real time, stored, and fully managed to ensure quality assurance that offers the agility required to drive innovation.


CSI and Bank of the West introduce an integrated payables platform with virtual card payment optimisation

Corporate Spending Innovations (CSI) has teamed up with Bank of the West, a subsidiary of BNP Paribas, to launch V-PAYO, an evolution of their e-payables products and services for commercial customers and their vendors. This product aims to offer clients greater automation, process efficiency, and digitisation through an integrated payables experience using a virtual card optimisation process for B2B payments.

Virtual cards streamline operations enabling corporate clients to work more efficiently. They replace paper cheques with digitised B2B payments, making them more effective than traditional ACH. Expenses are reduced, and the buyer and supplier portals provide payment visibility and status with faster and more comprehensive reconciliation. In addition, virtual cards allow for an increased float period, up to 55 days, which can help improve cash flow.

V-PAYO features a single file for all payment methods including virtual card, ACH or cheque print and delivery. It has a File Transfer Protocol (FTP) with flexible file formats and Application Programming Interface (API) capabilities. Card payment optimisation aims to increase usage from the industry average of 15% to 25%+ of total payments. The solution's buyer and supplier portals provide full visibility of payment status and automated reconciliation capabilities. It also includes a centralised database with vendor information and what the firms describe as a high success rate of vendor on-boarding.

The integration with the software will mostly be through an API into a company’s Enterprise Resource Planning (ERP) system, making the accounts payable process automated, efficient, and easy to reconcile.

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