From Chaos to Clarity:
Strategies for Smooth Bank Integration

Announcer  00:04

Welcome to the Treasury Update Podcast presented by Strategic Treasurer, your source for interesting treasury news, analysis, and insights in your car, at the gym, or wherever you decide to tune in.

Craig Jeffery  00:17

Welcome to the Treasury Update Podcast. This is Craig Jeffery, your host today. Our episode is called From Chaos to Clarity:  Strategies for Smooth Bank Integration. And I have two special guests one in the studio with me. It’s Mark O’Toole from Fides and remotely Kelly Carpenter from AES. Welcome to the podcast, Kelly and Mark.

Mark O’Toole  00:39

Great. Thanks for having me.

Kelly Carpenter  00:41

Thank you for having me.

Craig Jeffery  00:43

Well, before we get into the questions today, and I’ll start with you, Kelly, it just love if both of you can give a little bit of an overview about your current role and responsibilities to just keep the audience informed.

Kelly Carpenter  00:55

Sure, so I am the senior treasury manager for AES.  The corporation is a Fortune 500 global energy company that operates on four continents. We have 127 generation facilities with approximately 32,000 gross megawatts in pipeline or operation. And that’s comprised of a mix of good natural gas, renewables such as wind, solar, battery, and traditional thermal sources. We have six utility companies with 2.6 million customers, about 9000 employees. And as of the end of 2021, we had $11.1 billion in total revenues. Today, I am based in Arlington, Virginia, at our corporate office, we have a hybrid treasury function. So I have oversight of our treasury teams in these other regions on these four continents, with most of our operations centralized in the United States across our renewables, businesses, as well as our two utilities.

Mark O’Toole  02:15

Yeah, hi, my name is Mark O’Toole.  I work for Fides Treasury Services, I head up their sales and partnership here in the Americas. I’ve been in the treasury space now for nearly 17 years or thereabouts. I know, Craig, you and I have worked together in past lifetimes at other companies, I’ve worked for a lot of the major TMS companies on the software side. So it’s been very sort of interesting last 5, 10 years, just watching the developments within the space.  But with Fides, specifically, what we focus on is multi bank connectivity. We’re one of the largest providers in the world that I’m a trusted partner to over about 3400 clients that use our services, both for bank balance reporting, cash management, liquidity, and the payment side of things. And big value add, I think, is just our ability to connect to over 13,000 banks across the globe. So for companies like AES, or any other large or small corporation that is working with smaller banks, maybe banks that are not on Swift banks, on Swift banks, maybe on different channels, like ebooks are able to utilize our services. And so that’s kind of what we do.

Craig Jeffery  03:18

I think it’s great for everybody to know the background and the companies that people work for, whether it’s a provider, bank, whether it’s a treasury professional, this helps enrich the conversation. But let’s let’s get into the topic. I think for background, I know we’re talking about from chaos to clarity, and strategies for smooth bank integration. That’s that’s the broad theme. That’s our episode title. I’m not sure who would like to go first. But what I would like to talk about first, what are you seeing in terms of changes in finance, what changes you’ve seen over the past five and 15 years? I mean, thinking back 15 years, maybe, you know, more than 10? And then maybe five years? How has that changed? To today? I guess I want the answer to maybe touch on some of these lenses, expectations for speed, you know, responsiveness, whether it’s information reporting, or how payments occur. Comprehensiveness, if we’re talking about visibility, how comprehensive does the company expect to be able to see like, where’s all our money? Or some of our money, they’ll buy bank because it just major activities, or security? How has that changed? I know that’s changed.  Both of you mentioned some of that, and then the ability to adapt and shift. You know, it could be with relationships or with technology.

Mark O’Toole  04:31

Yeah, certainly over the last five years from from a vendor and a technology perspective, we’re certainly seeing major shifts and you know, speed expectations, you know, for drive for real time visibility into your cash in your positions and your liquidity. So there is an expectation there for faster and more efficient payments, and that’s definitely increased. And that’s also but also been driven by advances in technology, such as real time payments and API’s and the blockchain to be able to enable a lot of that.

Craig Jeffery  05:00

The move to real time, is it people are demanding this real time or instantaneous view? Or is it just a move towards faster? How would you describe that?

Mark O’Toole  05:01

If you look at certainly from what we see in a before and after, even today, you know, for companies that are maybe not connected or using technology for the bank automation, and visibility around cash, those customers are doing things very manually if you’re a company that’s going in, and you’re the Treasury or on the cash team, and you’re going into each portal for each of the banks that you have, and you’re downloading statements, and then you’re taking those statements, and then you’re parsing them out, and you’re putting them on a spreadsheet, and then you’re consolidating that spreadsheet and you’re sending it over to HQ. By the time all of that gets done, that’s not very real time. So if you’re if you’re hungry for that data now, because I need to make decisions on it, whether they be investment decisions, or I’m going to make acquisitions or whatever, I’d like that real term, and real time visibility into those cash. And that’s one aspect of it, that’s even setting aside the payments component of that. One could argue not everybody needs real time payments. I mean, if you’re Uber or one of the food apps, delivery options, the ability to be able to make those payments to those type of workers is a great benefit. But not everybody in the outside of wire transfers, they have the ability to do quicker payments, but do they need it instantaneously. From a b2b perspective, not always. So you can sort of make arguments on both sides of that.

Kelly Carpenter  06:23

Thinking about payments on that too, Mark made a really good point that it really depends. So for AES, we see a mix of need for speed, and we tend to be a little bit on the slower side, when it comes to, we’re usually paying smaller suppliers, if it’s our utilities, and we’re talking about capital expenditures, we typically have a lead time to anticipate those payments. So that real, let me tap your phone type situation isn’t necessarily what we’re talking about. So I don’t see that as much in within AES. However, there are small use cases where I’ve seen our utility customers want to be paid faster. And that is something that I’ve heard peer companies talk about how do they if there’s a deposit refund, for example, when a utility customer signs up initially for electric service, they have to pay a deposit that stays with the company for an X number of time for regulatory reasons, it earns interest. And then at the end of that term, when we owe that money back to the customer, what is the best way to send that back. So real time payment in that situation, which it’s their smaller dollar value, and I’d see that being more appropriate, but I just don’t see it taking off as much as say, like an Uber would use something in that situation.

Mark O’Toole  06:42

You know, if you’re making a wire payments, you know, the ability to be able to get an acknowledgment of that, or where where’s the payment in that process? Or did it hit? And can I easily then reconcile that, you know, in my accounts, you know, that’s where I think technology comes in, and helps it even enable that process from a b2b perspective.

Craig Jeffery  08:22

So if we think back five years or 15 years, 15 years ago, I don’t know if there was still being statements that included, you know, paper items coming back, maybe that was 20 years ago, like that changed radically to now everything’s been online, probably for 15 years or so, you know, on the consumer side, individual side, now, it’s, my kids owe me money, or I owe them money, you sell something that’s like instantaneous, but not everything has to be instant. But I don’t know of anything for information and payments, where we’re like, the same as always fine, or maybe fine for a while, but it’s everything tends to be the same or move faster. Like there’s a there’s a requirement for faster analysis. Maybe not instant, but but definitely quicker.

Mark O’Toole  09:07

Quicker, sure. And then that’s balanced out by security and compliance and regulations around that. I mean, you know, even if you take Zelle, I’ve used Zelle as well. But wasn’t there an incident there last week, where there was a bit of a security, some security issues necessarily with with some of these applications. Venmo the same. So, you know, less less security, but certainly more convenience, and certainly for from a consumer perspective, that’s great and seems to work work well enough. But when you’re dealing with large corporations with huge balances and lots of cash and many banks, you know, I think security around and the compliance around making those payments and control being able to control who makes those payments, you know, it’s very paramount to be able to operate and protect the cash that you have, right.

Craig Jeffery  09:55

One other comment I could have made at the outset is, you know, everybody’s opinion is their own, not necessarily those of their employers. This is just a dialogue around, which is good. And if anybody wants to say no, these are the opinions of their companies feel free to jump in. Kelly, any comments on the security side? Like how has that changed over time Mark, Mark brought us into that topic. And maybe you could continue that.

Kelly Carpenter  10:16

I’ll back up a little bit more about my history. So I’ve been in Treasury for in some way, way or capacity for almost 20 years. So I worked in the insurance industry and retail, and now energy, which seems to be the most complex, or at least, there’s so many layers and different segments to really understand. There are exceptions for the speed of reporting, for example, or the need for type of payment. But if we look at security, over the last 15, I even go 20 years, it has changed drastically in, in my experience.  Starting out, I will go back to speed, downloading bai files and importing them into a hosted or homegrown system, treasury management system to actually being potentially either hacked or fraudsters compromising our wire instructions and needing to close bank accounts, I see security being of utmost importance. And I don’t want to minimize the need for efficiency and speed, I think there’s a balance that you need to have, from a security perspective both on I’d say, either, whether it’s electronic bank statements, or if it’s payments, by using a either SFTP, or it’s just mainly a network of connections that we know are secure. We’ve done something one step beyond is really rationalizing our ecosystem within payments and our systems and bank reporting. And that by trying to minimize the number of either not just touch points, people we talk to, but those interfaces we have with third party systems, or even internally with other systems. I think when we’re talking about security, we’re not just talking about compromising financial information or a fraudulent wire or fraudulent checks. We’re looking at the integrity of the data. And in my opinion, that’s that’s very important as well, because our job as a public company is to report accurate financial statements. So I would consider that a piece of security. And I think there’s more visibility and more scrutiny than ever on companies to deliver an efficient, an accurate secure message and product real time.

Mark O’Toole  13:08

Yeah, Kelly, I mean, you’re spot on. I mean, you could even go beyond that and look at the role of Treasury, and treasures. And those teams have gone beyond just cash and liquidity. Now, they’re in the business of managing fraud. They’re in the business of, you know, managing sanctions filtering, they’re in the business of, you know, Tech Tech, essentially tech and compliance and regulation. And in order to do all of those things, and do them well, you know, there’s an over reliance on technology to be able to provide that. And I think part of the challenge, doing all the things that Kelly’s outlining there is that if you, you know, I think it’s well understood, you know, most Treasury teams don’t have their own dedicated IT teams. And so they have to circulate at the end of the year with the begging bowl, here’s the list of projects, we’d like to get prioritize next year. And yeah, hope you get on the list, and then you may get some or maybe none of all the things you want to make your jobs easier to be able to manage all of those things. And, you know, these things are still, you know, if you look at, you know, back back in 2016, you know, the, the, the Bangladesh banks account for them from the Fed, over Swift was stolen, you know, $81 million, you know, so that, you know, the people could still get in there, bifurcate, you know, steal, steal money, same same with corporate tax and everything else. And so, the question there is, what, what, what tools can I do? Are there workflows and controls are the role based ways of making payments so that people have for AI principals or have sign offs for checks over X amount of dollars, etc. But but certainly everything Kelly has sort of outlined there, you know, critical to, you know, not just the cash and the liquidity management of the business and making decisions around where I can invest best to Casper is to protection of all of that, and ensuring you as a corporation, are in compliance and doing everything you can from a regulatory perspective and protecting the cash.

Craig Jeffery  15:00

This has been an interesting discussion, not the least because I heard a new term that begging bowl, how do you go and secure funds for things that are important?  You know, I Kelly was saying is not just about efficiency, it has to be done in a secure manner. And that is a difference on the from the consumer side, it’s like, there’s limitations on how much you send through one of those instant payment services. They limit it. And it’s it’s very limited. Now what you’re doing on the corporate side is millions and millions of dollars or 10s, or hundreds of millions of dollars, different levels, security and a certain level of care there, I think you guys have brought some good points here. And thanks for that story on the Central Bank of Bangladesh, the New York Fed. When we talk about making changes to technology, that there’s there’s a cost to that you’re competing for the resources, you’re bringing your begging bowl to the table, you’re making a well argued case, staying put has risks to it and costs to it. Making changes can be a challenge. Okay, it’s worked so far. Why do we need to change?  But maybe we can talk about pain points. And Kelly, maybe we could start with you on the pain points. What were some of the pain points that you would see in your career for connectivity, you know, at either commercial or or corporate companies that you’ve worked for?  You worked for insurance companies energy, maybe you could share some of those, then Mark, we can continue the dialogue after.

Kelly Carpenter  16:17

When I think about the challenges or just the problems, pain points that I’ve seen, I boil it down to what is the solution to the pain points or one thing you can ideally solve those. But it comes down to the simplicity of what you’re doing, as well as Can you standardize what you’re doing? When I think about these two topics, I think about Microsoft, Excel workbooks, and spreadsheets. When you’re looking at working for a large global corporation with I say hybrid, it’s centralized and decentralized. We have hubs and service centers throughout. But no one had necessarily 10 years ago, the same approach to preparing, let’s say something as simple as a daily cash position. It’s simple, but it’s not standardized. And so if we’re trying to accomplish something with rolling up our global cash reports, for example, to deliver a message to our treasurer, or provide information to other as I call them SBU strategic business units or regions, so we can effectively kind of move cash throughout and place it deployed where it’s needed, then, using an Excel workbook may not be the fastest, efficient, most secure way of doing that. So I would say that’s probably been my biggest pain point when I when I think about how can we like simplify and standardize a process. So it’s prone to error, their security limitations, like I said, and it doesn’t integrate with any of our other systems. So we’ve moved a long way from using that very highly manual traditional way of calculating cash to now we’re using a treasury management system, in combination with we use an ERP as well, your approach was, how do I simplify, standardize and automate is a way of getting past those pain points, because it’s either complex, non standard fraught with errors in the manual, it can’t scale. Exactly. It’s not scalable, we’re essentially stuck. But to just within the last two years, I’ll say that the pain point of everyone having their own way of doing something custom is great if you know how to build efficient formulas and use macros wonderful. But what we needed was one way of doing things so standardizing to minimize those errors, loopholes and also allow the real time reporting and visibility into our global cash positions. So perfect timing is when we implemented a new treasury management system over the last couple of years than COVID hit. And I think there was a silver lining from the lockdown of COVID-19. And forgive me if I feel like everyone is talking and they always bring this up. It was a very traumatic period for everyone. I believe that it really helped us propel and I are peers as well, especially our utilities. The businesses that were traditionally paper based and paper focused and to this more modern age of automation, enhance connectivity and digital payments and financial reporting solutions, influencing the right people to embrace these new perspectives and views on technology, even the new technology, like who can see the bigger picture, take a step back and say, Okay, this is the way that we’ve always done things. It’s working. But is it ideal? And are we really getting the results that we want? Are we getting that real time reporting? Are we having faster, more secure payments, instead of somebody typing in numbers in an Excel spreadsheet, or logging into a bank portal and entering a payment manually, without say, some sort of template or repeating instruction? There’s a lot of value in standardizing and simplifying what you’re doing. I’d say overall, our pain points, it’s just, you know, looking at the traditional way of doing things and trying to think outside the box. I think that’s a challenge that most people, it’s it’s hard to step away, when we’re doing more with less to think about how to reframe, and change and do something new, as well as incorporate where the Treasury space is going. How do you integrate all of that together to create something that actually works? And it’s safe and secure? And standard?

Craig Jeffery  21:15

Safe, secure, standard, scalable? Mark, I know you’ve heard this with, with other companies, not just with AES? I mean, that’s a that’s a key area. What about you? What are what are some of the other themes that you’ve seen here?

Mark O’Toole  21:29

Well, I mean, Kelly brings up a really fascinating aspect of all of this, who are the digital change agents inside organizations? How resistant are organizations to change, and I think we’re starting to see and I think Kelly’s spot on in that sense that over COVID, has forced anybody that might have been sitting or neutral in the idea of adopting technology, or moving more quickly into digital transformation projects, etc, having to embrace that, you know, people were working remotely and from home, you need to be able to conduct your business, you know, seamlessly, but also, even as people retire out, and you’ve got a whole new breed of graduates coming in to finance and coming into Treasury organizations, they’re the consumer generation in a way, right? They’re the guys and gals who are used to a user experience in the same way we get on a smartphone, it’s real time, it’s visual, it’s intuitive, it’s easy to use. And if you’re gonna bring those kids into an organization, that’s, you know, 20 years behind in their technology, they’re not going to stick around. And we’ve sort of seen evidence of that people just quit, I’m out here, this, I’m, you know, it’s like being handed an abacus and said, Here’s your calculator, you know it for them. It’s just, it’s not very exciting. So we’re definitely seen, you know, that move towards that digital transformation. I think Kelly’s right about that. But more specifically, you know, as it relates to connectivity, and particularly with the banks, I mean, you know, one of the pain points for nearly everybody, before they embrace technology is just, you know, realizing that each of the banks have a different payment format, which is always a perennial problem. So, you know, if you have an organization where you have lots of payment files in different formats, and you’ve got lots of banks that you want to make those payments to, you very quickly realize, well, each of those banks will only accept a certain file format. So I’ve got this sort of chiasm, between here’s my payment format letter, it’s coming out of my ERP, or some other file that I’ve produced, they’re generated from another system, how do I go about converting that into a file that the bank will accept? So that’s, that’s one of the challenges and then the conversions of trying to make those files now you’re back into that begging bowl situation with your IT department, I’m an organization I want to scale, I’m growing, I’ve added a new bank, so I’m adding new accounts, I need those IT guys to be able to make those conversions in those files. And then the bigger question is, why would you Is this the business you should be in is, is trying to be a payments experts and conversion file experts, and when when necessary, may not have to do that.

Craig Jeffery  24:04

Interesting. Yeah, where do you want to focus as a as a great discussion why but you know, one of the items here when we talk about making connections or having connectivity, the plumbing has to take place for data to pass and whether that plumbing is, you know, using a secure file transfer protocol SFTP. Whether using a network like Swift or through an aggregator like Fides, or whether using API’s, either through someone else or directly with your, your native system, how do you go about making a decision about what connectivity type and what type of formats maybe richer formats versus more legacy formats that have less data? How do you go about making some of those decisions? And you know, Kelly, I don’t know if you have anything you want to share there unlike did you just do SFTP? Use Swift you know, were there any decision points there? And Mark, I’d love you to weigh in to with the the broad multi customer perspective.

Mark O’Toole  24:58

It’s it’s a good question right?  And usually from from Fides’ perspective, you know, we listen to our clients, you know, we try to understand what is their current banking landscape? And then provide that, you know, subject matter expertise around, well, here, here are your options based on your current situation, or here’s what you can move to.  Invariably, I mean, you have lots of choices, you have multiple channels, as you said, you know, Swift, you know, Swift channels, you’ve got ebooks, you’ve got banks that are not on Swift, what do I do there? So you have choices around, maybe have some API’s? And we’ll, I’ll talk a little bit, you know, the pros and cons to that, and are you build, you know, host the hosts. So from our perspective, I mean, they were not just a Swift service bureau, we’re more than that we have, as I said, we connect to over 13,000 banks around the world. And obviously, not all of those banks are on Swift. So we like to meet our customer wherever they are, on their journey. So whether it’s all in on API’s, or it’s some combination, a hybrid combination between swift and host, the hosts, because of the banking landscape, they are, I think that’s the important facet for that customer. And for that company, to be able to conduct its business and then know, if they’re a growing company, and they wanted to scale that can scale into into that technology. And we can meet them wherever they are in the in that journey.

Craig Jeffery  26:14

Kelly, what about you?

Kelly Carpenter  26:16

I’ll use AES as an example, just given the nature of our footprint, and the types of businesses we have, the types of payments we make. And guess the receipt side isn’t, as you know, challenging, that’s more information reporting. But it is it really is a combination, I don’t see a lot of the API, the application being adopted, I can’t speak for other companies for but for us, we do want to look to that. But there really is, given what we talked about earlier about the urgency and the speed of things isn’t necessarily just what we’re using yet. I do have some thoughts about how we can innovate in that space and use that and use API’s. However, today, it’s just a combination of SFTP. And just those host or host connections, we’ve rationalized a lot of that to make it you know, as secure as possible, as efficient as possible and simple. So in terms of kind of the overall infrastructure and connectivity points and systems, number of systems and counterparties involved, as Mark was saying, it really, it really depends on what your needs are, and where you want to push and the receptivity of adopting those types of solutions. So our case, I should say, that you can imagine AES more than likely works with a lot of banks globally. So we have that. Does it make sense to do API’s when you are we working with large commercial banks or small local regional banks that may not have this? So it’s blending? You know, what is the best solution to not only yes, we’re going to maximize our effort to implement a more efficient structure and use these technologies. Also, what’s adding value?

Craig Jeffery  28:26

That makes sense? I think a lot of people are looking at this, these hybrid environments only, where we work, the example of COVID push people working hybrid, the fact that we’re changing technologies, you know, maybe it was all HOST to HOST, SFTP. Or it’s portals now it’s more SFTP, or Swift, or networks or power networks, and API’s are starting to come into play. But like you were saying, Kelly, it’s more on the very large banks are offering that capability. That’s, it’s becoming more commonplace now. So it’s a, it’s a shift, these things don’t change instantly. And the other hybrid is, you know, power consumption, you know, it’s like, okay, some of the older fossil fuels or coal or other forms of energy, and some of the newer renewables are still in use, they’re still using these things. You know, on the energy side, it takes a really long time on the technology side, it’s still takes far longer to switch new formats, new connectivity.

Mark O’Toole  29:17

So if you think about, you know, three or four years ago, you know, API’s were the hot, hot thing, open banking API’s, and under and, you know, API’s have been around for a long time, they’re in there in the smartphone usage and all of that, but as it relates to API’s within a Treasury or finance organization, you know, relatively new thing. And so, in an in an odd way, the demand exceeds the supply. And by that, I mean, there’s a huge amount of interest in API’s and how could they benefit me, but there’s very few banks that really are connected in other than the obvious ones, the JP Morgan’s of the world, the city banks and Bank of America etc. But if you’re that organization that has banks outside that, your other regional banks or just other banks that don’t have API’s of which, by the way, there’s I think that’s 70% of the banks around the world. The challenge, there is time, you know, how long and I’ve no doubt that’s the direction API’s, the continual adoption by banks. And I think ultimately, if banks don’t adopt digital strategies around API’s, they’re going to be in trouble. Some have gone in and done clever things like become a narrow bank, and are doing some fascinating things reviving themselves in that fashion. You know, so what do you do in the meantime, you’re still that corporate, corporate customer, corporate treasurer, still needs to be able to bank where I need to bank. And I still need to be able to get my real time cash positions and report on that and make payments. And so like you said, right call, although I think I’d like to think this is a less controversial sort of easy decision is to embrace technology as it develops itself and becomes more mature. But I mean, that’s the thing. You want to be able to meet your customers where they are today. And then future pay for it. Certainly from our perspective, we’re, we’re doing API’s, but we can only go as fast as the banks and the banks are slow, so far. And then the other problem with the API is, of course, is if you’ve been involved with them is the standardization is not the same. So each banks API has a different set of standards, which makes it a sort of a challenge to work with the there’s no, it’s not like VHS, you know, or Blu Ray, you know, when it came to the big beta versus VHS battle and in the videotape business back in the day, you know, we still, it’d be nice to come to some sort of standardized way of enriching that data and sending that data down the pipe.

Craig Jeffery  31:35

I think you mean to say standardized standards.  Not the standards that are different. This has been a great discussion, I think I want to just hear any of your thoughts on a future look, you know, as we think about connecting the banks, you know, what are the challenges there? Whether it’s for payments, validation, sanction, filtering or whether it’s for information reporting with an increase of speed or, or activity? What are you seeing as the biggest change? What do you think the biggest change will be over the next three years and maybe 10 years, three years, you know, try to be more accurate 10 years, we’ll all have forgotten this podcast that but by that time.

Kelly Carpenter  32:14

Before we talk about the future, I think it’s really important to, to always know where you’re where you are currently. And if you don’t know where you are standing today, there’s no way for you to know where you’re going. My team and our treasurer, as we’re thinking about our strategy, globally, from a business perspective, as well as the Treasury, what’s our foundation, we need a solid foundation, we talked about connectivity, like you really need the channels flowing, the pipes need to be open for information to flow freely and accurately before you can really take the next step, you can plant the seeds, but take the next step. So knowing where you’re at, and then start. So you also need that receptivity or just, you know, the openness to change, willingness to change. And I think in the future in terms of if we’re talking about API’s, or the use of SFTP, I think we kind of know the fate of Swift at this point.  We’ve already started kind of moving away from more Swift based payments and using loot, leveraging the the ISO or the XML format, which was an enhancement in our systems to make that seemingly simple shift. But it was a big lift for our technology teams and lots of testing. So I think where we’re going in the future is maybe not being able to read people’s minds and balance sheets, through telepathy, but I do see perhaps it API will be commonplace. Maybe it will not be a thing. I can’t really answer what it is going to be. But I see that there will be more focus definitely on the security, more focus on security and speed, we’re going to see real time this time lag is not going to be an issue. I think we haven’t necessarily talked about blockchain or I don’t know if that’s necessarily applicable, but things like that. Mark was saying that kids coming out of college. Forgive me, ladies and gentlemen, people coming out of college coming into these companies that are using Microsoft Excel and they’re walking out well. The point is that there needs to be kind of an openness to change. And who are we allowing to drive that change? And is it the banks? Is it corporates? Is it companies like Fides? Is it our Strategic Treasurer Podcast? I’m not really sure. So I don’t know how to answer that question with like a specific like, this is the fate of API or SFTP. It has to be a solution that’s pretty much like fully integrated into everything we do.

Craig Jeffery  35:16

Some of the things I’ve heard you say the, the new workforce, you know, as you as you certainly moved through the process, what are they expecting? And you joke about people leaving? Well, we have, we have a staffing arm that does permanent and temporary staffing for companies for cash position management, and we’ve taken on some companies where people left because the process was so manual, it was like this stuff that Kelly was talking about, that wasn’t being done, it was extremely manual pulling things out and tremendous spreadsheets, and they’re like, No way, you know, 10 years ago, people like, I’ll put up with this nonsense, because that’s the way life is. But if you grew up, you’re like, key stuff in, like, who’s gonna do that? And that’s actually, that’s fairly reasonable, given the tech today. Like, why would you want to do that that’s not a career growth thing. And so we’re staffing some of these companies that have run in those problems. And they’re also like, help us automate those processes. Because now, Assistant treasures are now having to do these very manual processes, because they can’t hire the Zoomers that come out of school today.

Mark O’Toole  36:14

Everything, you know, Kelly was posing the questions. And these are good questions. And, and just even having these conversations opens this up for the discussion and the debate. I mean, if I was to sum that up, in the drive to everything, news to two words, or three, if you put them two together user experience, you know, and the user experience is just the connection of everything, where you know, you use a phone, or you get on a smart TV, the smart everything, the smart fridge. And the other word is connectivity, how all these things will talk to each other and integrate into each other. And in a seamless, frictionless like way. And so you know, as you think about treasury, I mean, if we could all know what the future would be hold, we’d probably be all very rich and wouldn’t have to do podcast, we’d be sitting on an island somewhere, having a Mai Tai, but if I was to guess, you know, over the next couple of years, I’d expect to definitely see a continued growth in the use of API’s for bank connectivity, you know, they’re obviously more flexible. They have some dynamic integration between systems. And they’re already doing that, and many other ways in society today, particularly on the consumer side. So I expect that to continue. I’ll bet slowly, but it’s definitely common. And, you know, people are getting geared up there. And I think in the more, you know, five to 10 years, we were seeing a bit of it now.  But I think in the longer mid to longer term, you know, we’re going to start to see, you know, further development and adoption around new technologies, like the blockchain use of blockchain, or artificial intelligence. And, in fact, you know, and the thing about these things is they’re not they’re not linear anymore. They’re exponential. Right. So something like chat API has dropped on our laps only recently, and that’s what’s revolutionized, and GBT chat GPT. Rather Thank you, which is just could put a whole sections of industry out of work, because the AI does it for you, you know, and so to some considerations around that, and how do you, how do you harness the good in that? And then how do you protect, you know, job losses and things like that? So how do you take that technology and help you and your organization make better decisions, faster decisions, predictive, more predictive nature to what you could be doing inside your business. I think that’s the exciting tech. You know, that’s, that’s the common that’s underway.

Craig Jeffery  38:36

There, bear with me, as I just stepped through this, this is something that was coming up as I was thinking through what you guys were saying and discussing. Everybody remembers EBAM, right, there was this method of exchanging bank account, electronic bank account management, the method of having digital conversations back and forth, there was a huge topic, a lot of buzz about it. And then the rep banks are setting it up. And then the corporates are like, Yeah, we really want that. But we maintain all our records on Excel spreadsheets, or in paper files, and you can’t integrate digital into paper, right? It’s like electronic water connection, those don’t work. And so people have been building up on the bank account management side. Now, the other thing that’s gonna happen, I think, over this three to three to 10 years is like, everything’s gonna get faster. And you know, we think about API’s, or some type of streaming, right things happen as they occur, it can be pushed instantaneously doesn’t have to be mega connection, pass a file, close it, check to make sure it’s balanced, it can, it can move quicker. And, you know, the API’s of the last five years are far superior to what what we saw in the past. So here’s one thing I’m thinking of, if you have any reactions, or you just you don’t have to react to it if you don’t want to, but I think what we’re going to see is the larger banks are going to develop more API’s much more real time and then as we need to speed is we need to increase speed. The challenge is going to be inside organizations. Now we have some companies that are working on internals. streaming in this whole, this whole exchange of information essentially instantaneous within their organization, even though their organization may be heavily cloud oriented between Cloud partners, that you have to, you can’t say I’m going to, I’m going to be instant, in a file based method to be instant to be streaming, it’s, it’s a different type of connections. And made that’s not going to be in three years for most companies won’t be in three years. But it will be over time.  Any any reactions?

Mark O’Toole  40:28

Just think about that, right? And then think about corporation to corporation, or b2b, and just the complexities that exist today. Now you layer in that faster, everything on top of that, and you got three things just scream at me. Security, how do you maintain the security? I mean, that’s still somewhat of an issue even with API’s? Am I in compliance, also big issue? And then, you know, is it on my within regulations, no matter what country I’m at, you know, so they have to somehow embed themselves into these new processes. And I don’t see, I see more of that coming on, not less. And I think it’s weak on the consumer side, all of these issues, but inside corporations where you’re dealing with vast amounts of cash, and the production is redistributed managing that cash and protecting, protecting the cash, different different set of requirements, so the technology may be way ahead of operationally managing all of that. And then then you layer in sanctions filtering today that, you know, very, very hot topic, all these things that are need to somehow sit alongside whatever we do with faster, newer technology.

Craig Jeffery  41:34

Yeah, sanctions filled during a hotter topic today on the corporate side, because they have more liability, as opposed to the banks. Kelly, any any final words from from you?

Kelly Carpenter  41:44

I’ll be curious to see, because I mentioned we do operating in many countries, some of them smaller than the US, I’ll be interested to see how the larger banks or the larger players and developing these technologies are enhancing API’s and the security around that step in to help those smaller institutions with this, because I can’t imagine that customers globally, will keep banking with smaller regional banks that don’t have this type of. So I’ll be curious to see how the industry the banking industry evolves, like, will we see more acquisitions? Will we see more partnerships?

Mark O’Toole  42:30

You’re absolutely right. I think, you know, either you adopt these digital strategies as some of these smaller banks, or you die, right. And, and I think, if you think about API’s, and just newer technology, certainly like the API’s, I equated to like the ATM network, back in the late 80s, or early 90s. You know, the banks came up with this great idea with a network of ATM, I can go to a hole in the wall, extract cash, I didn’t have to go into inside the retail branch. It was great for the banks, because they could, you know, sadly, lay off people inside the bank, less less need for resources inside the bank. And everybody got used to that for years and years and years and was very convenient. And it’s back to that sort of idea of user experience, just that I could go anywhere, grab my cash, before digital wallets came along. That was the thing, right? And then what did the banks do? They started charging fees. So API’s I think, is a great ubiquitous way to do a lot of the same thing. Provide that user experience that frictionless experience between corporates and finance department and the banks themselves and offer new services along along these new API’s. But at some point, you know, you’ll turn on presumably it’ll turn on the yield somebody have to pay for it, but but you’ll be used to using it because you’re using it in many different ways. And it’s providing that sort of frictionless experience.

Craig Jeffery  43:47

Well, Mark and Kelly, thank you both for your time on on today’s podcast. We really appreciate it.

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