Analyst Report Series Webinar

Treasury Aggregators
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Advise - Major Projects
Assist - Outsourced Services
Research - Market Data
Inform - Industry Insights


Thursday, February 16, 2023


2:00 PM – 3:00 PM EST


This is an online event


Paul Galloway, Strategic Treasurer
Craig Jeffery, Strategic Treasurer

Hosted By

Strategic Treasurer


Treasury departments require massive amounts of connectivity both to internal and external groups. As the company meets with changes and growth, these connectivity needs result in heightened complexity. From payment types and formats to compliance and fraud, this complexity can become overwhelming for treasury staff. This webinar will discuss how treasury aggregators (TA) address these pain points by supporting efficient and controlled operations even in the midst of complexity. Additional topics will include the role of a treasury aggregator within the larger treasury technology landscape, factors affecting the future of aggregation, and leading practices for successfully implementing a TA.

If you encounter any issues with this webinar replay, please contact our team.


Announcer  00:25

All right, well welcome everyone to today’s webinar on Treasury Aggregators. This is Brian from Strategic Treasurer. And we’re pleased you could join us as we analyze and discuss the latest Treasury Technology Analyst Report. But before I introduce today’s speakers, I have just a few quick announcements. Zoom offers several different ways for us to interact today. If you would like to post comments or questions viewable by all attendees, please use the chat icon in the toolbar. If you’d like to ask your question to just the presenters, please use the q&a icon in the toolbar. You can ask your questions at any time during the presentation, and we’ll try to get to as many as we can. But if we don’t get to your question, someone from our team will gladly follow up with you. There will also be a few polling questions throughout today’s webinar where you will be able to select your response from a list of multiple choices. You will need to click the submit button on the polling questions to have your response recorded. And if you’re here for CPE credits, you will need to answer at least three polls today. And last, please ensure that your zoom display name includes both your first and last name, so we’ll know to whom we should send the credits. Our speakers for today are Paul Galloway, Senior Advisor at Strategic Treasurer. And Craig Jeffery, Founder and Managing Partner of Strategic Treasurer. Welcome Paul and Craig, and I’ll now turn the presentation over to you.


Paul Galloway  02:04

Well, thanks, Brian, appreciate the introduction of we’ll go over the agenda for today. I won’t, you know, call out the specific topics but make a few comments regarding the agenda as we’re showing it here. Will will define what an aggregator is and the functions they perform, as well as how it is different from other systems. We’ll also talk about challenges that organizations face such as fraud, manual payments, visibility and solutions to address them. We’ll spend some time discussing reasons why an organization may need an aggregator will also cover the rate of innovation and change as it relates to Treasury aggregators today, things that impact us such as networks Faster Payments, API’s will also cover lender leading practices such as bank connectivity payments, information reporting and compliance. And then we’ll wrap it up with resources that are available out there for you to view and take a look at. Next slide, please. So, when we think about treasure aggregators, and you know what they are, it’s important to define what the components are. And there’s two main components. What treasure aggregators, as we see here, information, consolidation data that comes in, and payment payments go out. So on the information consolidation side, that’s where you’re connecting to banks and you’re pulling in information such as bank statements, you know, EDIA22 statements, analysis statements, you’re connecting to TMS, for transmitting wires, ACH is to an ERP, or admin system and an organization so you can effectuate payments, such as ACH isn’t checks and even wires that way as well. Or your reconciliation platform. If you have one, you could connect to that as well. And lastly, information may be collected through an SFTP, APIs and networks. So you have different ways that you can gather and collect information and bring that into an aggregator. When it comes to the payment hub side of things, payments going out. There’s a variety of payment files that you can bring in in different formats into a treasure aggregator. They originate you can also originate payments, you can enter or manage payment request through treasurer aggregator workflow modules. You can also reformat payments and files for bank consumption. So it doesn’t matter how it’s coming in whether it’s coming down from your ERP admin system, treasury management system, it will get in the treasury aggregator will get that data into the correct file format that’s needed on both sides. So the consumption can happen. And validation, confirmation also helps strengthen the process. What is unique about a treasury aggregator is that it’s different than a payment hub or payment factory or data consolidate or TMS. In the sense that a lot of these systems have one of the two functions that we just talked about. And TMS has both sides. So it’s, you know, like a treasury aggregator I’m sorry, treasury aggregator has both sides where you consider a TMS a TMS is focused on consuming data provided by an aggregator, so it lacks a robust connectivity, information consolidation, payment validation and compliance features that you’d get with a treasury aggregator. However, what we’ve been seeing recently is that some TMS is have enough complexity to qualify as a treasurer aggregator in addition to a TMS. And so we’ll talk a little bit more about innovations and nuances later in the presentation. We’re up to our first poll question. And so the first poll question today is on banking complexity, complexity, or banking complexity situation is iwi. And you can select more than one. So multiple choice means you can select all of them, a couple of them, select the ones that apply to you. That works for Treasury tech, provider bank, or consultancy. Issue payments out of three or more banks, use 10 or more banks have 100, or more bank accounts, or NA or other. Those are the options to select there. Again, you can select more than one. And in answering today’s poll questions that we had throughout this presentation. If you type in there, I see people already typing in poll this, this must be folks have been here on our webinars before we were gonna go a TA so TA or poll, you know, I think that’s okay. But we will send to you a copy of this presentation, along with the results of the poll. And, you know, Craig, I don’t know about you, but I was thinking well, you’d see some, some kind of evenness here in the results. And we certainly did, basically about hit evenness across the board with work for Treasury tech provider bank, or consultancy about a third of the people issue payments out of three or more banks, another third, and roughly a third at 10 or more banks. The other two options are about even at 25% of peace. So it kind of kind of played out the way I thought it might.


Craig Jeffery  09:05

These are, you know, I look at the working for, there’s a lot of bankers who participate in our webinars, we really, really appreciate them. And so you can see 30% bankers, tech providers, with about 70% or, you know, corporate treasury practitioners or people involved in payments. So pretty, pretty interesting split there. The vast majority of you are practitioners, but thank you everybody who’s also not a practitioner for participating. A little over a third with that complexity of issuing payments out through more banks. That is a one of the significant areas of complexity that Paul mentioned. And we’ll be talking about a bit more 10 of our banks is that’s that’s also pretty complex, right? You’re dealing with quite a few and that’s just over a quarter. So yeah, this is really, really helpful to see where things are and then you have the not applicable or other that probably makes up the organizations that might be the simplest they’re dealing with maybe a primary bank or two banks have under 100 accounts. So less less complexity. This is this is great information to see who’s on and what the mix is. Thanks, Paul.


Paul Galloway  10:18

Yeah, thanks, Greg. Moving on to the next slide. And by the way, if we get, you know, at least 100 people that are putting in TA or poll, since we started our poll, we switched the TA, we will get a copy of the deck along with the poll results sent out to everyone that’s on here. So with that, we are going to move on to kind of the first part part one of you know how, how it turns your aggregator can help organizations. So in here, we’re going to focus on Bank and Bank Account complexity, because in today’s environment, organizations are finding a bank account structure, number of bank accounts is becoming more and more complex, especially with organizations that are growing, developing more legal entities within their structure of the companies that they work for, which continues to add complexity on the bank and bank account management side of things. So these, you know, the structure and the number of accounts, you know, puts pressure on your treasury staff, especially if they’re doing a lot of manual processes, such as logging on to bank portals, downloading statements, trying to corral data into spreadsheets for cash management, or reporting. And, you know, this stuff draws staffs attention away from strategic tasks, and timely visibility, and reporting, as it takes time to do the stuff that’s manual. And poor visibility also increases the risk of fraud and leads to poor decision making. an aggregator allows Treasury or Treasury Departments to maintain visibility, that helps produce accurate and timely data for decision making, improves the security by preventing activity from being unnoticed. In today’s environment, you know, fraud is becoming a continues to be a big issue for a lot of organizations, because fraudsters are out there finding or looking for ways to take money from companies and they’re getting more and more sophisticated doing it. Now know, Craig, if you have any other comments on this slide, you want to add it?


Craig Jeffery  12:47

I do. I liked how you said, I think you said something along the lines of this level of complexity can take you away from strategic activities. And the reverse can also be true strategic activities. While maybe it’s not quite the reverse strategic activities can create additional complexity, like you’re acquiring companies, they have another general ledger, they have another whole banking structure. And no matter, we probably should have done a poll question like how many people are involved in a bank and bank account, you know, reduction process or, you know, normalizing or reducing those, that activity. And that’s probably a huge number, because naturally, this complexity will grow as you enter new markets. As you acquire companies, you’re adding more and sometimes you’re adding more than you’re rationalizing away, you’re then you’re reducing. So your account rationalization program may like always seem like I’m behind I closed 10 accounts, and we acquired a firm with 50. And I closed another 30. And I closed another 20. But at the same time, another 100. Come on. So there’s there’s a little bit of a feedback loop here, right, the strategic time that’s necessary as well as managing the activity. So you live in an era of complexity, how complex is your company, that can vary from one place to another?


Paul Galloway  14:10

Yeah, thanks, Greg. Great comments there. Brian, next slide there. Okay, this section where it talks about payment types, formats and intensity. So in today’s environment, we’re seeing that there’s Faster Payments, so whether it’s RTP, or same day, ACH or other methods of executing payments. at a quicker pace. We’re seeing more and more of that happening, which is changing the complexity of payments itself. And we’re also seeing that the format files or the files, the way they’re formatted, are changing as well. The Introduction to XML has changed quite a few things. As organizations are starting to rethink how payment files are being delivered to banks, Treasurer aggregators can help you with those payment files and deliver them to the banks. And in a flat file such as XML. With high volumes and complexity of payments, Treasury needs a fuller range of options to support the growing payment intensity, more and more payments with organizations are growing, it’s getting more and more difficult to do with the old way. We’re seeing ourselves, a lot of our clients have been doing things for 1015 20 years, with spreadsheets and manual processes. And they’re making the switch to more sophisticated platforms such as a treasury, or Gator or TMS. And these reasons I just mentioned, are really kind of driving that things are changing at a quicker pace. Aggregators help maintain fluency in new and legacy file formats to translate incoming and outgoing data. This is really important today, because with all these changes coming on, it’d be really difficult for organizations to try to do this all by themselves. It’s just, it’s just a lot too. It’s a lot to handle. Craig, I don’t know if you have any additional comments that you might want to make that perhaps I may have missed.


Craig Jeffery  16:31

Nothing that you missed, but just expanding on the payment formats, that shown conceptually on the bottom, please don’t think the the numbers or the codes below those icons are particularly meaningful. But the idea of there’s different formats for payments, including, you might be familiar with bi or BI two formats. And the message type line 40, something comes through swift for prior day, or 942. That comes from current day. So when we think about pulling and balances, those are, those tend to be delimited format. So it would sit in the middle, right where the there’s commas in between, or they’re delimited, somehow, like each, each field is separated by a delimiter, in this case, a comma, right, so you look in the middle, and you can see three zeros comma, four zeros, comma four zeros, is the idea that here is how we designate when one field starts and another begins. And so those those have been historically great ways to pass data, it was really expensive to send data. And so this was a strip out all the headers, right, just send just the facts across fixed formats mean, you know, position five to position seven, include the contains the three digit ISO code, or whatever it happens to be. So you look at a particular position or a range. And that’s where the data you’re looking for is included. So fixed formats are very legacy delimited formats are very legacy. But you have a lot of systems that handle those. And so as Paul was talking about, how does this help? Well, if we continue to transition to newer and better formats like XML, like extensible markup language, if you look at that third chart, that green image with the, the less than slash greater than sign there just as a way of showing some differences. There’s value in some of the newer formats, because you can include more information. The data includes its own descriptor. And then as you look at things like API, there’s a different way of handling both the connection and the movement of data. It’s not really file based, it’s the connection and the movement is all one activity. But if you look at the extensible file, for example, the format, what do you see in the conceptual layout here, PMT amount, that’s just to indicate that it’s payment amount. And then there’s the payment amount that’s in the middle, right? So now you know what that is. And then the curly brackets with payment amounts, slash or whatever the particular designation is, tells you it’s the end of that field. So this is why we say it’s extensible or tagged comes. The information comes with a label, like Hi, my name is Craig. This is Hi. My, I guess my name is payment amount, right? So it tells you what that is. So it comes with it far better than saying I know it’s a payment amount becomes because it comes in the sixth field in this delimited format or because it comes in field 21 to 30 in his fixed format, so it’s it has more information. Why does that matter? As an example, it matters because now if you add information in a extensible format in your system doesn’t look for it. Okay, it’s extra information. If you can use it, now or later, your system can use it But it won’t break your translation system because it’s, it’s not looking for something in a position. If you try to add information in a fixed format field that has to be tacked on at the end, we have to change the entire format. If you add something that delimited format, let’s say inserted in row three, you’re going to break or bend your processing, you know, at that position in every field later, because it’s looking for $1 amount, and it has a reference number additional information. So there’s value in the newer and better formats are more flexible, that can be used for things like reconciliation, posting, tracking like that. So this whole concept, and I, I guess I’m adding quite a bit to that, to that, Paul, is that, you know, as you think about, I need something that communicates with the new information, I can take advantage of the new information, because every new setup, I want to have better formats. I also want to make sure it’s backwards compatible, but I don’t want to support that complexity. And so this is a way of, if you’re getting the older formats, they can still work. The aggregator can manage that as new connections are made you use the newer, better formats. And that way you can help with your transition over time. So that’s, that’s one part about that payment types formats, extending on the the complexity, because there’s a lot of recipients of data. It might be a treasury management system, it might be a reconciliation platform could be any ERP could be your data lake. So you want data that you can use. So that’s a couple of comments on the complexity there. Paul, anything else? Or should we move on to?


Paul Galloway  21:46

No, I think that was perfect. Craig, you hit a lot on those file formats. Important comments. Appreciate that.


Craig Jeffery  21:55

Sorry, I just dove in deep there. Yeah, thanks. Thanks, Paul. So part number three is like how does the treasurer aggregate help we talk about security? So how does how does that help with security? Where’s the value in that, and we have a headline there that payment, and banking complexity increases exposure to fraud? Why is that the case? Well, every every account is not only a point of cause it’s a point of exposure to your organization. So how do you manage the exposure? Do you close all your accounts? Do you monitor accounts? Do you have a proper structure? Well, there’s a number of things that are done from a structural standpoint. But certainly, if every bank account is a point of exposure, you need visibility to every bank account and should have that not on a monthly basis, not on a general ledger accounting cycle basis, but a daily basis, maybe even real time. But maybe current day, is what I’m saying is this idea that I can now see my accounts. And if you perform, you know, all of the four reconciliation activities. One of those is what we call Treasury proof. This is looking to see what happened in your accounts each day to see, does our balance match what we expect it to be? If there’s a difference, why is that and are all these transactions properly coming through the account. So this is a you know a sibling connection to the right structure, you have to have your banking account structure, so that it isolates activity properly receivables accounts disbursement accounts, but also so that you can observe any anomalous activity potential fraud, or, or errors that come through so they can be tracked and resolved right away. So this idea of, if you have a bank account, you need to be able to see it and see it on a daily basis. That is a cost of doing business, that’s a standard of good corporate conduct. That is akin to saying we’re going to use, you know, double entry accounting. This is a standard for how you operate. And when you don’t do that, what does that do? It puts you at risk project exposure for activities happening in the accounts, that by the time you find it, it’s too late. But this is also another discipline. It’s also like the discipline of saying, hey, every every bank account has to be registered track centrally, not just in three jails that you’re using, but in a central place that Treasury is looking out for. And so Treasury aggregators help with managing your bank accounts, in terms of even tracking signers, but another key part here is that if you have daily visibility, at least daily visibility to every single account, and if a new account reports and it flags, hey, this is not part of our setup. It’s a new account that helps Treasury it helps the control process work better. And if you look at those questions from a survey within the past last two years have any active backup counts been discovered that weren’t accounted for by Treasury? It’s like yes, that’s about that’s like one and five 10% 10% weren’t sure didn’t have experience to know if that happened. So when you look at 18% 20%, I have experienced that this is not uncommon, that number should be zero. But it’s, it’s roughly 20% of the population has found accounts. And why does this happen? People open up accounts that are they aren’t supposed to, or accounts come into the mix, based upon acquisitions. There’s multiple reasons for those. But the discipline of daily reporting, daily visibility, and bank account management tracking helps reduce that. So you have to protect every point of exposure. And this is one way to do that. Now on the flip side, from the inbound information or tracking accounts, has to do with payments and this idea of central payment processing helps increase visibility efficiency is a more standardized and defensible environment. Let me let me say this, we, you know, our our consulting practice, and has done a lot on on security. And one thing I’ll say that’s really, rather interesting if you ask people, and you can ask yourself this as your company of, let’s say, anything, any anything above 250 million 500 million in annual turnover, that this is likely going to be our answer, you’d like answers likely to be no to this question. Do you have a complete inventory of all the payment flows that happened in your organization, from the starting system, whether it’s a accounting system, any type of system of record a payroll system, an administrative system, all the way through to how it clears at the bank and is reconciled? You know? Is it creating files? Is someone sending transactions to be debited? How is this happening? If you have a complete inventory of all of the flows, and have that track down well to where the exposures are your countermeasures or compensating controls? You are a member of an extremely small group, when people go through this process, and anybody with, you know, moderate to high or highly complex complexity, or environment, lots of that, that type of activity? The answer is always, always no, we have the major flows done. But there’s a lot of separate, not necessarily Renegade, but separate flows that exist. And that has to be a concern, because every every account represents a point of exposure, that controls very access to files and data is not is rarely locked down. And so the idea of if we route that through an aggregator we create a standardized process. May we bake in some controls that are done at the aggregator level, or in the case of like a TMS if you’re using TMS as a payment hub, or use just a dedicated payment hub that allows you to create a standardized process, control that do some additional checking, matching, making sure the data is encrypted. You’re tracking things for compliance, like sanction filtering, that was standard encryption, follow on confirmation process. Well, I went on for a while about that, and and if there’s anything else that you wanted to summarize or change here, before we move on to the next.


Paul Galloway  28:35

Yeah, I would just, you know, I would echo the results of the survey, as you’re showing here. You know, this 18 20%. When I was a practitioner, heading up Treasury it. Yeah, it happened several times where there was accounts within the organization being open. And what I found was, not only was there an area that was opening bank accounts, they were opening them, the accounts up, they weren’t notifying necessarily everybody that needs to know. And they didn’t have authorization to really open the accounts. So I’m not exactly sure how they were able to do it, but they were doing it. And it should have been done. So it happened to me, you think you have good controls have processes in place, and sometimes, especially, especially with an organization that has either been in place for a long time, and it’s quite large and complex, or an organization that has grown very fast. These kinds of things can happen. And it’s not uncommon. It’s not uncommon. Great comments on security there, Craig. So going from secure 32 compliance burden and global expansion. This is something that’s becoming more and more prevalent for organizations to focus on, especially from a, you know, regulatory standpoint, the burden continues to grow. As organizations become more and more global. There’s more and more global touches for various reasons and, you know, sending or receiving funds outside of the country of origin. In our case, the US is becoming more and more common for companies to do have all kinds of industries, and backgrounds. And aggregators offer modules that can track signers and bank accounts for at bar reporting. They can help with compliance for PC PCI DSS had NACHA regulations and requirements. They perform sanction screening that will lower compliance risks and headaches. If you think about OFAC over the last several years, as begin holding companies or individual companies accountable, versus banks for sanctioning violations, some companies have been fined up to $100 million in the past decade for neglecting sanction screening. Sanction screening is not easy to implement. It’s very difficult. Sanction parties are growing and changing. And so the number of people that are organizations that show up on that list are constantly changing. And the list is getting longer. Aggregators help Treasury manage the process efficiently. What I mean by that is that it will help not only with the screening process, the bar reporting compliance, PCI DSS NACHA. But it will also help on the cost side of things as well. Beyond when you think about this chart here, on the right hand side, you see bank bank accounts, payment rails for mass currencies, regulations, networks. You know, it’s not, it’s not like the old days, you know, 2030 years ago, payments were much more simple. Bank Account structures were relatively more simple. We were less global than we are today. And so these complexities that have come around due to the expansion, make organizations prying, for needing the help of a treasurer aggregator. Craig, I don’t know if there’s anything else you want to hit on that I may or may not have dove into deep, deep on.


Craig Jeffery  33:08

Well asked me to comments always a dangerous question, because I usually will. I know I think I think the points on the right hand side are interesting. You know, it’s the I was just picturing you saying I remember my day we used to pay by trading raccoon pelts or something. That’s from like, life was simple, right? We only traded like really large items that have value but the movement of value. You know, it’s like, oh, I can do an EFT do Naft and a wire I do EFT wire check. EFT wire check, same day ACH and real time payments and Faster Payments scheme and in the UK, etc, etc. that the complexity, especially with all these new payment, faster payment, quicker payment, instant payment schemes that are out there schemes in a good way. Yarrow, Pom Pom, yeah, all of that the, you know, we’ve gotten to the point where you have to support the new stuff, and the old stuff. And so this backwards compatibility, just like old formats are information and providing the best information to the newest system. It’s the same on the payment side, you’re supporting, more and more. And that’s that’s an element of complexity that’s happening around us. After very little development on the payment side for a long time, the last five years, we’ve seen it expand in Europe, Asia, and even in North America, with some of these new payment types, great activities, but that does add complexity. And then when we think about currencies, you know, the issue is more companies become increasingly global companies become increasingly global. So you’re in more countries, you’re dealing with more banks, with more currencies. And that that brings with it the challenge As of the regulations, the format’s the banks different connection. So this is an element of complexity that makes it harder. Just general challenge. And so when we think about information coming in, or payments going out, it’s like if I, if you had one phone, and you talk to one person on that one phone, great, yes, that works great. If you’re talking to two people, you have two phones, it’s like, like, I can see that. I’m talking to 20 people, and I have 20 phones. And you might say, why would I? Why would I ever do that? That seems suboptimal? You know, when you think about, oh, how many people we could have done a poll question how many people have 10 or more fobs physical tokens for getting into their bank accounts? You know, all of these things are elements of complexity. Like, why would I have 10 phones does not make sense. But I need, I need to connect to 10 different banks, I need to talk to different people, I need to handle different formats or languages, however you want to refer to it. And so how do I simplify? How do I make my organization scalable? And that requires reduce the complexity either. I choose not to enter certain markets, or I use types of services that simplify that activity, I get a phone that has numbers that I can call different people. And maybe there’s a personal translate for me put it in the different format. So the different languages, if you will. So those are some of the things about how a treasury aggregate helps it. It acts as the translator, and a different phone number as opposed to a different phone, pushing that complexity out to to others.


Paul Galloway  36:39

Yeah, great, great points there, Craig. When we think about CASP, positioning and visibility, and we’re showing a diagram here around this gathering bank data in a timely manner is really critical to Treasury Departments for visibility and cash positioning. Aggregators can transfer data to wherever Treasury needs to use it. So you can connect to your TMS, for gas management, payments and other things. It also can connect to your ERP and your Ambit systems. So you can do bank reconciliations, you can do the accounting side of things, you can get this information data into systems that are usable for organizations. And it will streamline and make manual processes automated through this connection. You can also connect to BI BI tools for reporting and managing data and giving visibility to that data for Treasury Departments that don’t have a TMS because some Treasury Parvus might not. But they have an aggregator and aggregator can provide basic reporting, that allows for the visibility and cash positioning or cash management functionality that Treasury needs. And so these, these platforms offer the opportunity to make these connections and automate some of these, some of these items that we’re showing here on this page. Greg, I don’t know if you have any additional comments here. This one?


Craig Jeffery  38:27

Well, just just a couple of quick things. So you know, I think the the movement of bank information to Treasury systems into ERPs has been around for quite some time. The comping is data to reconciliation platforms has certainly become a lot more popular. There’s dedicated recon platforms, everything from black line to T Rex to a to other systems, the use of business intelligence tools, we’re going to push data to reuse it and other formats or other other ways of analysis lends itself to push it into a data lake. So that can be used and evaluated by business intelligence tools, like clicker Domo, or all kinds of BI tools. And so this is a we see a lot more of data needs to go to multiple homes. We see that that’s that’s definitely increased. You know, the past few years more companies are using the same data and into three or four or five systems. So we can we can move on to the next one. And the next one is a poll question. But if you can answer the poll question, there’s no need to type T airpo. into the chat box. We have enough. You guys are awesome. Paul asked for it. And you gave enough numbers. I usually have to beat people up and keep up begging, please type something in the chatbox. Well, we’re all set there. So we’ll just ask you to follow CTM file and strategic treasure on LinkedIn if you’re not already. This question is about reporting formats. Our information board format reporting preference is I want an API that’s not really a format. But as a data moves over in works, bi API to XML like a camp T format, proprietary empty, like message type, like a swift, proprietary is some bank specific or company specific. Other, or I don’t know, not applicable. Love to see what the what the preference is here. We’ll make sure we don’t bias people towards any of those and this slide. Paula, I think I’m already following you on LinkedIn, I think I’m connected to you. But I know if people send an invite to connect on LinkedIn, I’m gonna go accept those right after our webinar today, I’d love to stay connected with everybody in that way, in addition to following strategic treasure and CTM file, you do a great service enjoy if we can be connected on LinkedIn. All right. Oh, this is a group that loves bi. It loves it so much. You know, MT, which is, you know, more for global companies that are using like, some of the older swift messaging is pretty small, proprietary is pretty small, too. It’s interesting, that API surpasses XML. So XML is a fairly new standard now less than, yeah, really in use less than 12 years or so I’m trying to remember, the first time it really became available by multiple banks. So API’s and XML are pretty making waves, but they have not surpassed BI. So one thing I’d say, Paul is, you know, like, if you think about making connections, if you say, I want a better format, and someone says, if you ask me, What’s the better format? I would say, XML over BI? And then what would be how would you argue against that and be like, well, the bank doesn’t offer XML or does not for Kante. And then the other argument IP as well, I can take advantage of the BI code, because that will help me classify my accounting, and my cash positioning, that’s really easy. Because when those codes come in my logic in my classification system, whether it’s a TMS, a visibility system, like it just makes life easier. So I guess the point then, is, a lot of the providers of the bank providers offer XML that camp T format, enrich with a bi code, so now you get the better format. And it has the BI code, so you can still do the classification. So that’s, that’s my one track mind. Paul.


Paul Galloway  42:55

Yeah. I am a little surprised API XML, so close with a thought XML would have been a little bit further. But, you know, not too surprised, be I still 40% for I was figuring somewhere between 40 and 50% of that fall, like, right in the middle there almost. You know, I do see over time, the BA is going to fall to the wayside. And, you know, I keep thinking accent miles kind of girl. But, you know, there’s 21% of the folks that, you know, were either in A or, I don’t know. So, there are some folks that, you know, the the don’t necessarily know what the file formats are for sure. So some of that could be skewing the data that we’re showing here. But, you know, I don’t know if that’s common in a poll like this that you’ve done in the past, Craig?


Craig Jeffery  43:54

Well, you know, I guess maybe answering a different question than the one you asked, but kind of getting to Part of the issue of like, bi, you already have the air coming in? Are you gonna keep it in place? Probably for quite some time. Why would you yank it out and put it in again, unless you had like massive benefits of doing so. So the the repaving a road that works is not necessarily a great investment of dollars. But if you have to put in a new road, or if you have to make a new connection, it tends to make a lot more sense to go with the better Format The format so last 30 years into the future, 40 years for the future, whatever, a much longer runway than that delimited or fixed length format. So these aren’t the old ones aren’t necessarily going away those some are going away, or being diminished. Yeah, just new stuff. New setups, go with the newer formats. Newer connection methods is the heavy recommendation. All right. That brings us to the first slide after the second poll. So you know, thinking about this idea Have a treasury aggregator? Yeah, so So who needs a treasury? What’s the what’s the purpose of having a having a treasury aggregator? Who needs it? Do you know? Nobody? Nobody needs a laser to slice a tomato for their sandwich, right? And life will work just fine. Who? Who needs a treasurer aggregator? If you if you’re connecting to one bank, do you even need a TMS? Like? Probably not, you can see your balances, you might have set up some routines to create the accounting. But as you expand more banks, more accounts, you need to have visibility. So where does this make sense? So on the payment side, if you’re you have a lot of lot of strange 345 payment banks, multiple payment types, you know, EFT wire, you know, across the board a number of different elements. Routing things through an aggregator or payment hub for that instance, can help create standard processes, solid payments, security, they can provide a single place where you’re validating against sanction lists, or you’re not making payments to sanction parties. And this happens to around 10% of companies are making payments or receiving payments from sanctioned parties. Those those types of reportable events are, are not fun. But the overall payments security approach is really, really important as the criminals have become more automated and more sophisticated. We need to make sure we’re protecting payments. Treasury is the the payment superintendent responsible for security, making sure all of those things work well. So that’s an area where where payments, security becomes increasingly important and harder to do. That’s a good area to have it. The other is, you know, when you think about reducing complexity, if I only have to finally make EFT payments and check payments, maybe that’s pretty easy. If I only receive a file from one bank, that’s pretty easy. But when those items grow, that complexity grows, I have to deal with talking to more people. I have to each of those requires a setup, maintenance tracking, I’m sending information out I have to make sure the for prepayments that the format changes that this bank or that bank requires are included, how do I change vendor line systems, these elements of saying I want to reduce what we have to do internally, and I want to use an aggregator to do that can make significant sense or can be a very compelling argument that this is how we get this how we connect to banks for information reporting. We use an aggregator and as we said, some of the TMS providers are aggregators by by the functionality that they offer. And then there’s you know, specialized aggregators that may be specialized with the massive strength around payment hub, or pulling in data from lots and lots of different sources. So this is this ability to handle the foreign language or formats, the ability to handle and gather up all the data for you or to deliver it in a secure manner. Those, those help people decide to use an aggregator, when you start connecting to more than five banks, for payments for four or five or more banks, even sometimes three or more banks for payments, especially when you start having different payment formats. It, it makes a significant, it’s eminently reasonable to look at, what those what what your needs are. And, you know, you quickly get to the point where it’s like, you’re going to default to an aggregator, as opposed to making direct hosts those connections. I know there’s some, there’s some questions that are just the host of panelists. And so we have a list in the back that show who’s in the analyst report. So you’ll see what you’ll see, you’ll see the answer to that question in in a little bit. So I’ll just leave that there for the person who sent that in. But it’s great, great comment. Yeah, and, you know, Paul, on the right hand side, you know, some of these questions I have hanging out, it’s like, what are the top three challenges? If you look at these and say, What are your challenges? One of the most underrated one is the top one. It’s like a this is a top challenge. Some people like no, we’re pretty good. We’re in better shape. Do you have a full inventory of all your accounts? Is everybody trained in current not just on don’t stick a thumb drive into your computer, but on all the different payment security issues? How many Right attempts have there been how many people were fooled at least part of the way or forgot? Stop? When you start looking at that, it seems to us that 51% is very, very generous self rating in the surveys, but as you look across the screen, where are these items? How does? How does the use of this type of technology service? Streamline your work? And so it’s like, how does it help us scale efficiently in a controlled manner? How does it help us achieve efficiency? Like on the inbound side? These are, these are some of the key challenges that Treasury faces. The treasurer has to address those, whether it’s using different types of tech or changing your structure using an aggregator. Those are questions that you want to answer thoughtfully. And it’s not always one, one size fits all. It’s like a treasure aggregator is not for everybody, or every company. But when you think about these questions, what’s the right answer for your company now? And as you scale? Yeah, Paul, I’ll I’ll turn it back to you. If you have any more comments on here, we can advance to the to the next one. I see. There’s some questions too. You want me to you? Yeah.


Paul Galloway  51:16

Yeah, I don’t I don’t know if you want to hit on them. One question is, what exactly is a treasury aggregator? Can you provide examples, and at the end of this presentation will provide some real examples. The other one is, is are you saying treasurer aggregator eliminates the need for host to host connection connectivity?


Craig Jeffery  51:40

Yeah, I would say it reduces the need. So let’s say you’re connecting to 10 banks for information reporting, with a hostess connection, you also have a connection for payments to all of them, like wire payments, 10 of them and EFT payments, or ACH payments to six of them and some other country payments. So therefore, you’re still going to need to have some connection, like if the data is going to be fed back to your ERP. Or somewhere else, there’s still a process of moving the data, but you do eliminate the gap instead of having I’m connecting from my data center to I’m making 20 connections and my previous sample, you might have a connection where I need that data to come back to my recon platform. And so I am getting a connection there. And I’m getting a connection back to my data lake. But I’ve eliminated 18, I have someone else take care of those 80. They’re connecting through Swift, they’re connecting through their established tostones connection. They’re connecting through an API. And so there’s there’s ways that it reduces that complexity, you shift it out somewhere else, it’s like you plug into the phone system, that’s why you can call everybody. And to the extent that it Yeah, so it helps reduce the the number of host host connections, you might need some in some cases, it could eliminate them. But I’m going to do positive pay files for certain items. I still need to get those to the bank, I either send them directly or I route them through an aggregator. So I’ll pause there all once you go into the next.


Paul Galloway  53:17

I know you’ve heard hit or last and final poll question. We actually have two parts. This is a single choice for part one is single choice for part two. The first question is is what do you view as the most important requirement for treasurer aggregators on the next year, select one enrich service for payment security, like validation, confirmation, sanction, screening, fraud detection, service for interoperability, with all systems reconciliation, ERP, TMS, admin systems, new technology support such as API’s, it rich services for information reporting, such as confirmation, error detection, recovery service as part of an extension, or an existing solution. Network. So size and number of pre established connections or I don’t know. So that’s the first question, select one of those. And then the second question is a little more simple. Has your organization had a third party security assessment? In the past year? Yes, no, or I don’t know.


Craig Jeffery  54:38

Yeah, this is really focused on third party payment security assessment focused on the payment side, not not necessarily a generalized IT security assessment, but related to payments. So I’ll just add that for emphasis. Yeah, so as you go ahead and answer those. We’re going to advance the slide to the next one. Give everybody a chance to And so we can get through the remainder of the slides. Paul, I think this I think this one is this one is you?


Paul Galloway  55:11

Yeah. So this this slide here, innovation shifts we talked about a little bit on the front end about innovation. So you think about networks, you know, the ability to leverage the same networks. Treasure aggregators gives you that ability and helps improve reach and functionality, the aggregator reduces a danger, that information will be lost and transfer through messaging and visibility, you end up with faster and better payments. So, you know, new payment rails and formats. We talked about some of these payment rails and the file formats, that helps you know, it drives aggregator adaption, due to the complexity because things are becoming more and more complex, we keep adding on to the variety of payments, the volume of payments, is growing, the number of banks and number of bank accounts, the global footprint, all these things are driving the need or the adoption of an aggregator add the functionality of aggregators, same day, ACH real time payments other Faster Payments. Innovative payments offer speed rich data visibility. Aggregators leverage these benefits. When you think about API’s, both API’s and aggregators enable more extensive connectivity. However, aggregators offer more cost effective functionality API’s. If you did everything via API connections, you would find that it would cost you multiples of what you put in to a treasure aggregator, you’d keep on paying over and over again, for that. BI tools. We talked about this earlier aggregators offer the ability to feed data to bi to our BI tools, data lakes or the feed into BI tools. So this gives you more efficient data, use each end and allows for data strategy. When you think about expansion of capabilities, you know, we’re blurring the lines. We’re seeing that today. So speed of innovation, such as microservices, or cloud native or pass platform as a service or API’s, etc. They’re expanding the tech stack. And what we’re seeing is with the expansion is they’re overlapping. So these these various innovations overlap. So it blurs the line is impacting aggregators, as well, as tech solutions expand distinguishing aggregators from other categories is becoming a little bit more of a challenge. Greg, I don’t know if you have any additional comments you want to make before we move on to?


Craig Jeffery  58:20

No, I think, covered well, and for purposes of time, yeah, let’s do the leading practices here.


Paul Galloway  58:26

Okay, on this on this next slide, Craig, I’ll pick the left hand side the right hand. So I slide and we’ll give you the middle. So I’ll start out with the onboarding of banks. This is this is super important. Plan time for this because it takes time to do the bank connectivity, that whether it’s you’re connecting to an aggregator, you’re connecting to an ERP, your own connectivity platform homegrown, a treasury management system, this kind of activity takes time, so you need to plan for it. There’s KYC requirements, you’ve got to identify who the contacts are, you should do that ahead of time for each bank. There’s, you know, determine what steps are needed to be completed before others help you maintain an appropriate cadence. You know, and plan plenty of plenty of margin for the unknown. So there’s always the opportunity that there’s something that you didn’t anticipate, which slows down the connectivity process. So so make sure you give yourself or allow yourself enough time to complete that connectivity. Or you know, view the next one and then I’ll take the last.


Craig Jeffery  59:45

Yeah, so integrated internal systems. This idea of data needs to be used in different places. We talked about business intelligence tools or 10, data lakes, perhaps the stored counting systems, reconciliation platforms, etc. This idea have partnered with your IT group to have your data and your connectivity plan laid out and and then the steps about making sure you have a clear test plan as you get set up, and then it moves into production really important. Such up for success.


Paul Galloway  1:00:18

Yeah, no doubt, Craig, when it comes to training, oftentimes what happens is two things one, employees are trained ahead of time, meaning the very beginning of implementation, they get trained, it gets implemented, and they don’t remember everything that they learned through the training process. So this can be problematic. Or they’re already inside the system through implementation, they’ve been doing things and then they get trained. And doing training at the back end, can lead to having to correct habits that people have engaged in because they weren’t trained at the time they started using the tool. So when you train your employees, just make sure that you train them just before you want to go live, where they’re going to actually use the treasurer aggregator, and that will make the transition to using the platform a lot smoother.


Craig Jeffery  1:01:19

Right. Thanks. Thanks, Paul. Thanks, everyone. I’ll turn it over to Brian for some announcements, and where you can download the analyst report. Thanks, everybody.


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