Pandemic risks eclipse treasury priorities as businesses diversify investments to mitigate impact

The Covid-19 pandemic has shunted aside existing challenges to sit atop treasurers’ priority lists, according to “The resilient treasury: Optimising strategy in the face of covid-19”, a survey run by the Economist Intelligence Unit (EIU) and sponsored by Deutsche Bank.

The results show that treasurers are looking to diversify their investments in a bid to mitigate the pandemic impacts, including heightened liquidity, foreign-exchange and interest-rate risk. As many as 55% plan to increase investments in long-term instruments, with 48% increasing investments in bank deposits, another 48% in local investment products, and 47% in money-market funds.

Despite Covid-19 looming large, other challenges wait in the wings. Notably, the replacement of the London Interbank Offered Rate was identified by 38% of respondents as the main challenge of their function. Technology, meanwhile, continues to be a pressing issue, with treasury teams becoming increasingly reliant on IT solutions. Here, data quality is rising up the list of concerns. Already highlighted as very or somewhat concerning in 2019 by 69% of respondents, the figure rose to 78% in 2020. Acquiring the necessary skill sets to realise the full benefits of this data and technology is also a continuing priority - with some progress registered from last year. In 2020, 30% of respondents say they have all the skills they need to manage technological change, up from 22% in 2018.

“Treasury’s focus on technology is not only helping teams operate more efficiently in a remote-working environment, it has long played - and continues to play - a key role in realising their long-term priorities,” noted Ole Matthiessen, head of Cash Management, Corporate Bank at Deutsche Bank. 

The survey shows that managing relationships with banks and suppliers (highlighted by 32% of respondents) and collaborating with other functions of the business (also 32%) remain top of the agenda - and seamless digital systems will help give treasurers the bandwidth and insight to be more effective partners for both internal and external stakeholders. The report was based on a global survey of 300 treasury executives, conducted between April and May 2020.

 

Banks with 70% of US deposit accounts now have access to real-time payments network

Financial institutions that hold 70% of demand deposit accounts (DDA) now have access to real-time payments capabilities via banking technology providers connected to the RTP network, the real-time payment system in the US provided by The Clearing House.

With additional banking technology providers connecting to the RTP network, even more financial institutions have a technical path to offer real-time payments to their depository institution customers when their institution is ready. Jack Henry & Associates, FIS, Sherpa Technologies, PayFi, ACI, COCC, and other third-party banking technology providers have implemented streamlined processes to connect their clients to the RTP network.

“Through these technology providers, the RTP network is ready and available today for banks and credit unions of all sizes looking to provide real-time payment capabilities to customers,” said Russ Waterhouse, executive vice president of Product Development and Strategy at The Clearing House. “Once a financial institution is ready to connect to the RTP network, there is very good chance, a 70% chance, that they have an already proven path through one of the many banking technology providers who have connected to the network partnered with TCH.”

The RTP network’s real-time payment capabilities are accessible to financial institutions that hold 70% of US DDAs and the network currently reaches 56% of US DDAs. The RTP network offers a flat pricing structure for all depository institutions regardless of size, does not include volume discounts or have minimum volume requirements, and, unlike ACH, does not charge an operator fee to receive payments.

 

Versapay adds accounts receivable tools

Versapay, an order-to-cash solutions provider, has announced new features to support customers challenged by COVID and ongoing economic uncertainty. The firm's Electronic Cash-on-Delivery (eCOD) presents an intuitive self-service payment portal to accept online payments, trigger order fulfilment, and enhance buyer-supplier communications. 

By offering flexible payment methods, eCOD eliminates the exchange of cash and cheques, reduces disputes, accelerates delivery, and automates cash application. Suppliers offering early payment discount programmes to their customers will benefit from Versapay incentives, featuring online calculation and presentment of payment incentives and straight-through reconciliation to the ERP. 

"Customer research uncovered how early payment discounts were often overlooked or improperly applied, creating additional friction between suppliers and buyers," said Bob Stark, chief marketing officer at Versapay. "Our clients want to accelerate collections so removing barriers to process early payments is critical to drive working capital improvement."

Versapay's Document Manager allows suppliers to securely share documents, settle disputes, exchange messages and initiate mass communication with multiple customers or divisions. The online collaboration tool also streamlines back-office operations, offering productivity enhancements over manual email processes.