Banking Beyond Borders: Navigating the Connectivity Era

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Thursday, September 28, 2023


11:00 AM – 12:00 PM EDT


This is an online event


Mark O’Toole, Fides

Philip Anklin, Fides

Tony Krabill, Greif

Craig Jeffery, Strategic Treasurer

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Gain insights into the transformative impact of connectivity on the banking industry. As technology continues to bridge geographical gaps and reshape traditional financial systems, this panel discussion delves into the opportunities and challenges that come with banking’s new connected landscape. Attendees can expect to gain a deeper understanding of how cross-border transactions, digital platforms, and real-time data are shaping the future of banking. From exploring the potential for enhanced customer experiences to understanding the regulatory implications of this global connectivity, the discussion will provide a comprehensive view of the changing dynamics.

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Announcer  00:32

Okay, well welcome everyone to today’s webinar titled, Banking Beyond Borders:  Navigating the Connectivity Era. This is Brian from Strategic Treasurer, and we’re pleased you could join us as we discuss the changing dynamics of global connectivity in the banking industry. 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’ll 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. If you’re here for CPE credits, you will need to answer at least three polls today. And last, please ensure that your resume 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 Mark O’Toole, Head of Sales and partnerships in the Americas at Fides, Philip Anklin, Chief Growth Officer at Fides, Tony Krabill, Vice President Treasurer at Greif. And Craig Jeffery, Founder and Managing Partner of Strategic Treasurer.  Welcome Mark, Phillip, Tony and Craig. And I’ll now turn the presentation over to you.


Craig Jeffery  02:21

Thank you so much, Brian. It’s good to be here. And I’ll just say a warm welcome to Philip and, Tony, as well as Mark.  Thanks for thanks for being part of this webinar. I know there’s a lot of good content. Thanks for joining. Yeah, also, everyone, thank you for spending some time, you know, you got a lot of things to do. Everyone’s got a full plate. So the fact that you chose to spend an hour with us is encouraging. So today, our topics of discussion are laid out on the screen and those nice rectangles with the colorful icons or chevron. So here’s what we’re going to talk about the complexity complex situation, regarding payments and banks for information aggregation and Treasury payments and payment hubs. What’s going on? Why is it becoming so complex organizations as they become more global, as they grow, as new payment types emerge, as they have to support multiple back end systems. So complexity is increasing. Most organizations are highly complex to hyper complex. And so this creates some additional challenges that need to be solved. And so we’ll cover some of the background for that. Many of you will be experiencing that, then we’ll look at connections between parties, how do we make connections between different entities to provide messages to move funds and to manage that activity. And this is includes things like formats, as well as connection types from API’s to host to host to dealing with networks, then we’ll look at some of the implications around cross border transactions. These tend to cause quite a bit of pain, consternation and phone calls to find out where’s the payment? Why hasn’t been received? Let’s trace it. Let’s figure out what goes on. And how that is how some of the solutions that are coming out make it easier to handle this over time, and easier to execute payments since many organizations are dealing with significant volumes of cross border activities. On the communication front, and we talked about data handoffs versus supply forum, the concept of a payment platform versus payment messaging where messages are passed from one party maybe altered passed to the next all the way through. That becomes more complex, the more parties that are involved. And so we’ll look at a payment platform, perhaps using the Swift GPI concept where messages can be seen by parties. They can be a day adapted and adjusted. And so that type of concept will be discussed. Then finally, or not. Finally, next to finally, the penultimate area will be customer experience how our corporations looking to enhance and improve their experience with their trading partners, it should be efficient, that should work and support the business partners. And then we have four takeaways. And the four of us will spread those throughout our group. So thank you so much for joining. And we’ll get into the first section, I’ll give a bit of an intro for Tony, I’ll ask you to jump in here. Nothing’s getting simpler, it seems very few things are getting simpler. There’s more payment types. There’s different methods of connecting. I’ll say a few things about this and let you share what you’d like about complexity. On the left hand side, you can see some statistics about what payment platforms do you use to deliver payments, you can see fairly new payment types like same day ACH, from a recent survey 42% already used another 3% are moving forward with using same day ACH. So instead of an overnight process, daily process a little less for backs, Faster Payments in the UK, largely influenced by the the audience participation more heavily North American focus then UK focused, but you can see things like Swift at 20%, real time payments 14%, using that fairly new payment platform with another 8% expected to use that. So this is a you can continue to see this across the board as more more payment types available, more people and companies using them. And then on the right hand side, how are you connecting to make those payments, you go into a portal, you leveraging a network like swift using a secure file transfer process or APIs? What’s going on? What are the plans to use? So Tony, I’ll have that long winded intro give you a chance to comment.


Tony Krabill  07:09

Yeah, thanks, Craig. And thanks for everyone for for joining this morning. There are just so many different platforms and payment types and ways to connect to all those. As long as there are regulatory bodies. I think everyone on this call understands that complexity isn’t going away anytime soon. I don’t think that’s a surprise to anyone here is the owner of the bank relationships. As the treasurer, you know, it’s just is truly overwhelming for Treasury, in a global company in particular, to be able to manage all this on behalf of the various functions that the company like AP or AR, for example. So as the treasurer, I take comfort in knowing that it is helpful to me that I only have to manage part of this complexity. If I can get my IT folks to output a file with the data that I need. You know, not to jump straight into a commercial here for our sponsors. But I know that Fides can connect it and keep it connected. So a key advantage for me on the corporate side is this significantly cuts down on my budget needs for it time, for it maintenance, for example, for managing all those SFTP connections. And it also increases security. I mean, I when I took over this, we had CSV files being emailed all around the place, you know, for even things like payroll, but CSV files for vendors that the local business leaders would, you know, upload into a portal and improve my local business leaders don’t even have portal access anymore. And if they do for statutory reasons, they likely forgotten their passwords, because now we have those direct connections and all the Sox controls that go along with that can be concentrated down to to better controlled systems and the testing. So we we do have a couple stragglers still, you know, it’s never a perfect solution. But, you know, for the most part, by the end of next year, we’ll have nearly all of our data that we send to or receive from banks flowing through Fides, so I’ll just pause there and see if anyone else has any thoughts on that.


Mark O’Toole  09:33

Yeah, that’s that’s interesting. I mean, the thing I’m zeroing in on is that right hand usage, you know, web portal upload 75% of people are still logging into portals, which is fascinating given you have sure there’s a myriad of choices that you know, a company can make around how they’re going to do connections, but the fact that so many people today are still using In, you know, a bag full of tokens to go in and essentially do very manual process made more complicated. The bigger the company is, the more banks you have, the more regions you operate in. And now you’re into sort of, you know, spreadsheet how having to download your statements, consolidate those statements? It’s a very manual process. It’s very timely, given that there are real world choices today. And as Tony says, you know, how do I democratize and automate a lot of that process where I don’t need to start to think about either different channels or different formats. I just want to be, you know, what do I want as a treasurer, I want to get transparency into my liquidity, my cash balances, you know, if I’m trying to do a 13 week forecast, or longer term forecasting, I’d like to be able to have ease of use, and quickly surmise where my cash is, and why currencies and be able to, you know, work with that and become sort of more proactive with the data that I have, versus worrying about direct connections and building connections, and then down rabbit holes with the, with the payments, which I know we’ll talk a little bit in a minute, but certainly lots of choices today, that you know, with with technology that is already readily readily available in the market, can be easily resolved with single connection points and automation.


Philip Anklin  11:25

Yeah, I think at the end, I would just want to underline the complexity, because at the end, if you just look at that specific slide, there’s so many so many abbreviations here that you, as a treasurer, mostly probably don’t even know. Right. And it’s, and that already shows the complexity because connectivity bank connectivity payments, it should I mean, especially the bank connectivity part, that shouldn’t be your core business, it shouldn’t take too much time away if your core businesses, this is exactly why there are providers in place like feeders who can help you overcome this this complex situation, right? I mean, looking at that there are channels, bank connectivity channels, like host EBIX with SFTP. On the other hand, you have like payment types, you have like an ad network, you have clearing houses. So how do you want to manage this all by your own right? And that just simply shows the complexity and the reason why we have this webinar to give some kind of educational view on this and how you can overcome this this complexity.


Craig Jeffery  12:29

Excellent. Thank you for all the comments there. That brings us to poll question. section number one, this is a double stacked old question. So there’s two questions if you go ahead and select all that apply in both of these, these are both multiple choice. So the top section is we currently use the following methods for connecting to our banks. And the second one is we plan to add the following methods for connecting to our banks. And I think it’s it’s fair if you if you have something, let’s say you have host-to-host but you’re still going to add them you can collect, click on both areas. So if you have plans to add, go ahead and put those put those in. So select all that apply in both sections. And then go ahead and hit submit when you’re done. Give everybody just a moment. There’s also in the chat box, there’s something about following Fides following Greif and following Strategic Treasurer, if you would go ahead and make sure you follow those companies you can stay current and updated. And if you are interested in getting the poll results with the deck after it’s sent in, please type the word either Fides, Greif spelled correctly not as grave but Greif or, or poll will work as well so you’ve got any of those choices to type in. So and I guess we’ll just go and just to make things fun, because what says fun more than having 100 people type the word feed as Greif or pull in the chat box that’s that’s the kind of fun we have in Treasury don’t tell your friends all right. I just love the engagement. Thank you. Thank you guys are awesome on the on these webinars it it’s quite fun to cover this material. We really appreciate you coming here so I’m gonna I’m gonna leave this open to whoever would like to comment you can see host to host is number two bank portals number one and the current method. Future method. It looks like the winning edition is AP eyes look at that, from 35% currently using 240 9% Expect to add so that could be some overlap. That seems to be a key notable item. I know. The bank portals entry or upload. Mark and I have some biases against that. We’d like to make some calm That’s about this data.


Mark O’Toole  15:02

I’ll jump in. First of all, I guess that just validates and supports the previous slide there where people are using manual efforts to do these things. And just looking at the bank portals, you know, those last two combined still seems to make up the majority of how people are making those connections host the hosts, not surprising there, particularly if you’re getting into bulk payments and things like that. I guess some of the questions around that are how are people maintaining that today? And how are they scaling with those kinds of solutions? API’s certainly growing, I’m surprised that that number that’s as high as it is just given, you know, how few banks so far today have an API at all to be able to do some of these things. But certainly, you know, it’s a future state roadmap for for where everything is going to go eventually, I guess the the main question there is how quickly banks get up to speed and providing API’s, particularly in payments, where there’s still a lack of standardization and whatnot, but certainly shows the promise. What does anybody else think?


Craig Jeffery  16:09

Well, quick public service announcement, if you don’t see the poll results screen, it might be stuck behind your presentation screen, or on your second or third monitor. So if you’re all tab, you can probably locate and see what the results are live, but we will go ahead and send those out today. But next person can jump in if there’s any other comments.


Tony Krabill  16:33

I was just gonna say that, from my perspective, the APIs, I think can be really, really valuable is until the business becomes more and more complex. So if you’re able to deal with only one or maybe two banks, for your total business, that’s great. Greif has over 400 global bank accounts. So that number of APIs would not work for us. But I can see how it would definitely work if if you had a if you’re able to manage your business with just a couple banks, or maybe even only one.


Philip Anklin  17:10

And I think it exactly shows in the moment in time we currently are right because most of treasury operations still feel comfortable with the whole with the host to host the direct connections or even with the bank portals. And it’s not really surprising me that we have such a high number of bank portals still. So when we have discussions with potential clients here, Fides, even big multinational corporates, they are surprisingly still working with logging into bank portals, downloading, merging into spreadsheets and sharing that all over the globe, etc. So that’s not surprising me. And also delighted to be state where API is a big buzzword. In the Europe, we have this regulation PSD to of course, there’s a lot of talks about API, but it’s not yet there, I would say where it should be or where we would expect it to be the technology. It’s mainly about standardization and security mechanism, which is and the target clients or the target types of an API currently, I would rather see it in the b2c area. For retail personal business, then really in the b2b area, where I would rather say like corporate treasurers, or rather like late followers that they follow, once they have security, that it works well, and the payment flows are protected. We’re not yet there. But of course, that’s the future state. Is it tomorrow? I doubt.  Will it be in a few years, probably. es.


Craig Jeffery  18:42

Excellent. And that brings us over to connections. If someone from Fides would explain what we’re what we’re showing here on this slide and how it applies.


Philip Anklin  18:53

Yeah, it shows a little bit what we have just seen as a result of the survey, right? I think most of the are many organizations are still rely on web portals for the daily payment and cash paid daily operations to cash visibility. Of course, it involves a lot of manual processes. You need to handle tokens, you need to handle spreadsheets, there’s prone to errors. And that can lead to inaccurate forecasts as well, if you need to do that manually. If you’re like a growing or a more mature treasury, professional or Treasury Department, then at the very beginning, you think of having a direct connection with the banks, especially in the API area, which makes sense of course, right? Because you can standardize the payment flows, the workflows, you can make them probably more secure a bit quicker as well. But they also Yeah, quite often experienced the challenge when it comes to that with a direct connection. So every bank might have different requirements in terms of again, like the sector, the encryption of payment files within that host the host connection for example, And if you look at the broader scale, if you look globally, it’s a direct connection that only hosts the host. It’s also about ebooks, for example, in Europe, something which is also probably not core, within the Treasury Department, or also, when you look at how you need to involve IT resources in setting up those direct connections. Also, most of the corpus, they don’t really have enough IT resources for such activities. And that’s why it is it looks easier at the very beginning. But if you deep dive into it, the connection is only one thing. And what is being sent via this connection is a different thing as well. Because once you have this highway, from your system to the bank system, that’s one thing. But then what are you going to send via this highway to the bank? Is it like an XML pain zeros? Or ones are the ISO standards? Is it a CSV file? Every page 001, the payment type has different versions, banks have different requirements, how to fill out or what kind of tax and data must be within which Visa tetra. So that’s, that’s even increasing that whole complexity. And also in terms of what you need to do you need extensive testing, you need to make sure that every single payment is properly tested with every single bank, etc. So it’s a connectivity is, is I would say, like an initial area. At the very beginning, I guess, corporates trying to do the by their own, too, because they think there’s it’s an offering by the bank, so it should work. But quite soon, they notice it’s not that easy. It’s high maintenance costs as well. It’s need substantial occasion of IT resources. So yeah, at the end, it’s essential for businesses to really question whether managing these complexities internally is, is their core focus, or if they could benefit from solutions, like feeders that allow them to concentrate on what truly adds value to their operations?


Craig Jeffery  22:04

Excellent, the there’s certainly more networks than Swift, we just put some examples, we put some payment associations like the Clearinghouse, there’s more than that, as well, as indicative or illustrative, illustrative examples there. Now, now shifting on to systems and messaging, maybe mark, you could, you could lead us off here, you know, as we think about backend systems and companies that originate payments, to how those payments are communicated through messages and files.


Mark O’Toole  22:35

Yeah, I guess it’s no secret that, you know, companies are dealing with a diverse system landscape and the ecosystem internally. And so, you know, I think when when companies can benefit from solutions that are system agnostic, and certainly as it relates to connectivity, you know, it’s one layer in, you know, every TMS system, for example, has some, you know, has to get that data in and needs to get data out. And where does that go. And search certainly going for a system where you don’t have to rip and replace as you work with different systems, whether they be different ERPs, or different TMS is the idea that you can lay down those connections, and they’re good, and you can just direct them into where you need them to be. For whether it’s your bank balance reporting, or any of your server payment formats, is critically important. I think, with different systems in place IT systems, you wonder, sort of reduce the lift, for those teams that you may have, if you’re lucky enough, in Treasury, most people now just getting it resources is a very painful process there. So the idea that you can, you know, potentially outsource and have somebody else do those connectivity layers and provide that sort of single source of the truth, whether it’s going into your ERP, or enter your ERP over the rails into the banks, just focusing on a single connection would be excellent, but also getting, you know, one of the area’s you know, in AP, famously, you know, they always struggle with getting reconciliation, and how do I get, you know, make a payment? How am I getting a reconciliation on the transactions and what got paid and getting a single version of the truth on that visibility and transparency into that is always a challenge. But I mean, from, from our perspective, you know, whether it’s, you know, you’re initiating payments out of an ERP, or you’re initiating payments out of a TMS, you know, the rails in all cases are important, and you want to have a scalable solution that goes across your entire banking landscape. So whether that’s domestically or globally, just the simplify that process and build a scale, and then of course, be able to, you know, once you’ve got something in like that, how do you administer that centralized user rights, payment rights, signatory rights and things like that? is important.


Tony Krabill  24:55

Mark, I could, I could, I could echo all of those things. And maybe just to reinforce one point, you mentioned the AP side, you know, our AP group has a robot that scrapes our database for discounts and payment dates, and that generates the file. And we’ve been able to set up with our AP team, and it and our banks that they have a dashboard that gets generated that shows all of those payments, even in a bulk payment file, what is released, what’s partially released, what’s rejected, we get those acknowledgments back from the bank at the payment level. So even a bulk payment file with 1000, payments of 999 were accepted. Those will auto reconcile those 999. So the one stands out and can be actions. And we also get an acknowledgment file throughout the process. So we can see, you know, did the file fail getting to Fides did the file failed between Fides and the bank, which doesn’t happen very often, if ever, or did the bank get the file and it failed there, all those acknowledgments are able to be consumed by our ERP system.


Mark O’Toole  26:07

Yeah, and, you know, one of the other things I forgot to mention, you know, just conversions, you know, we like most of the time, we come across customers who, you know, kind of produce an XML or pain 001. And struggle with that, but they can produce some sort of file and and so how do you keep the business going. So the ability to be able to, to make those conversions and specifically into a format that each of the banks will accept, you know, becomes even more problematic for customers who want to be able to automate that and make those payments. And then we have, of course, upcoming ISO 222 requirements, which everybody’s going to be hearing a lot more about, you know, by next year that will, we’re already future proofed on on that side. But you know, you have a plethora of choices there in terms of tags. I mean, I think the last look at that was like, there’s 2000 Tag options on an XML format. So is this something that a company with limited resources, and, you know, expertise and payment types, etc, wants to struggle with figuring out next year? How do I get ISO compliance and get things like that? So I mean, companies like us, we’re here to be able to help that kind of process of that.


Philip Anklin  27:21

Yeah, I know, I mean, Greif has a very high level of maturity when it comes to communication within the systems, right. And that’s, I think, the perfect foundation, so that you can really, in a very short period of time, take the exact right decisions. And this is exactly the level where actually every corporate treasury should somewhere be right. And if you start and very much, depending on the ERP, and potentially TMS you’re using at the moment, you might not be at that level, but then you will need to achieve that level. And this is also of course, something that we can overcome with what you just said, Mark with the conversion services, right? If you’re working on the added some kind of a and an older ERP, which cannot yet produce the XML, the correct format, according to the bank specification, etc. I mean, don’t worry, right, because you have enough time to properly upgrade the ERP or the TMS. And we just take over the conversion services as you do even if your system is still working. And that also shows probably in the next slide, Craig, if you could move over, because there you will see also that you might still using CSV files to to send that data or collect data from the bank. And if you if the bank says no, we need to stop that because CSV is not a standardized payment format anymore. And also in terms of regulation, and how much data does the bank need for proper sanction screening etc, we need to move up to the next level of format. And this is also exactly then the maturity level or the the progress that you need to achieve with upgrading either your ERP or let us do that we take over the format conversion, move that over to the bank, and you have you can buy somehow time to really upgrade your system. So that I think that specifically it’s also what Mark just said in terms of the CVPR plus initiative by swift where everything shell so when be on the new XML version. So there is some kind of an end date for the MTS for interbank yet, not for corporates, but for the interbank communication. And that just shows that this initiative is starting towards a more structured file processing or content of data. Just one example. The address the structure of the address is much more sophisticated as it was before and it needs to be much more details of, of the beneficiary and of the sender have that money so that banks and regulators have the possibility to validate who is sending and who is receiving. And that’s the direction that we are currently in. And this is, of course, something that is supported by the banks and the regulators, and ERP, DMS and corporate treasurers then need to, to adopt those to these changes. And that’s just adding additional complexity to the overall topic, connectivity, payment formats, what kind of data needs to be in which payment type? Is it different from cross border payments to local payments, etc. So it opens up a world of complexity where you, as a treasurer, not really want to have a detailed level of knowledge, because it’s just not your core business.


Craig Jeffery  30:50

Yeah, some really good points there, Phillip, one thing that I would draw people’s eyes to as you look at the comma separated value of the delimited files received the three red commas and then the XML we’ve got the tagging, that it’s all bracketed the same information. In this example, roughly the same information is shown in both formats. But the difference between the location telling you what something is like the third field here is the transaction amount, whereas the other one also comes with a tag that shows if you can see my mouse, you can see it tells you what it is. And this is not exactly how it looks. But you can see descriptors can come in, and so the system can read what it is. So if a if a bank is providing more information that can help other back end systems for reconciliation, for posting to receivables. And so that’s, that’s an element to have the value of have more better information if it comes through. Yeah. And that brings us to poll question section number two. And again, it’s double stack, because you can handle it. The first, the first question is our status of global payments. So we make payments in 11 or more countries, five to 10 countries, two to four countries or one country. There’s a single choice, their second one is also a single choice, we plan to add payments to more countries in the next year. So this is a measure of complexity. Do you plan to add payments? Yes, no, or you’re unsure. That’ll just see what the traction and the volume is. And Brian is keeping a close eye on the whole graph and feed us comments in the chat box. And it will tell us when we’ve surpassed the number that we wanted. And then you can all rest easily in the chat box. All right. As sooon as the poll questions, the responses come up, who would like to take first crack at this?


Mark O’Toole  32:58

Yeah, I can sort of jump in. I mean, yeah, let’s see the results here.


Craig Jeffery  33:02

Here they are, yep.


Mark O’Toole  33:08

Okay, so I guess just summary results there. 34% of folks, the majority seem to be doing cross border global payments, and 37% plan to do some more in the next year or so. So interesting thing and no doubt. Anybody that is contemplating. You know, cross border payments. You know, there’s a lot of they know, it’s complex. There’s some challenges around traceability, which is crucial for you know, getting timely information on those payments. But you’re also dealing with, you know, regulatory compliance. So depending on which countries you are doing, you need to have very regulations you need to be cognizant of when doing that. You get into currency and currency transactions and the ability to maybe hedge and you’ve got, you know, exposure to that payment delays, lack of transparency, where’s my payment in the process of that? One thing that certainly come up in the last, you know, year and a half or so, it’s just sanctions and OFAC screening, huge importance there. For companies particularly are doing payments globally, and are dealing with any of that is to be able to, you know, how do I make sure my payment isn’t going to somebody where I’m either gonna have a sanctions here and have my bank frozen, and they can shut down and face regulatory fines. So there’s definitely a lot more complexity into just not like just, hey, I’m going to make a wire payments to you know, somebody in Ohio, but now I’m going to maybe make a payment to somebody in Azerbaijan. What does that mean for me and I’m in compliance and can I see where that is in the process? And so there is A lot of considerations that go into being able to manage that nimbly.


Craig Jeffery  35:09

Excellent. Tony, wanted to kick us off of a couple a couple slides to go through what happens in cross border transactions, where’s the complexity? And then we’ll move into the platform arena, what’s the what are some of the different approaches to it? Sure.


Tony Krabill  35:27

Well, referring back to that poll question. So Greif is in about 40 countries. And we’ll be adding two to four more countries next year for Treasury payments, not the AP side, but more the Treasury focused payments. So it’s probably not a surprise to most of the people on this call. But inside the US, we have pretty good visibility to payments and where they are in the process. But those cross border payments, they, they basically disappear into the ether. As far as I’m concerned, we don’t have great visibility. And, of course, that ends up escalating to us as Treasury, when the money isn’t where it’s expected to be. So the AP folks, for example, have have have certain tools and certain abilities. But when they strike out, it ends up coming to us. And that leads to my team, wasting time making calls to the bank, searching around portals, you know, all that is, is high. And I can only imagine on the bank side how much time they waste between the relationship managers and everything else, is just such an opportunity for everyone here. And you know, my this is maybe one of my biggest wish list items would be that we had a solution that we could use, where we could really see where every payment is straight through the process. But today we go.


Craig Jeffery  36:56

Right, and then we’ll we’ll move over to the next next chart, there’s others do a quick set up the top is kind of legacy messaging, where there’s payment messages that move from company through the bank, maybe through a network to a correspondent bank, ultimately, all the way back to the receiver, let’s say the vendor and so you can see some of those handoff points. It’s kind of like the old telephone game where there’s a message communicated back and forth. The transaction platform below is showing, you know, people are connecting to a single place to observe the transaction or to add information to maybe make adjustments to an example that might be Swift GPI. And if someone wants to pick up that from Fides, and explain in more detail, and how we should think about data, handoffs platforms and just messaging changes over time.


Mark O’Toole  37:54

Well, certainly as you as you sort of look at the map, in a way, you can see where controls may vary widely, you know, who has rights to do all sorts of things, user management, and each of those portals, you know, do you know, which employee has access to which bank? And what can they do? Can they view can they access? Can they make payments? Is there a sign off rules that they can work with? The probably not and so centralizing and the ministry that and making that audible, and providing signature rights and thresholds and for rights principles and audit logs and security controls, you know, can be pretty complex, you know, if not handled, you know, appropriately, also what happens when, you know, a new employee gets comes on board? Are they able to get in and see things, can you control their rights and access to which banks, you know, in which regions? And then, you know, even if people leave for whatever reason, you know, just doing deactivation, you know, can you deactivate and get rid of the AR how complex is that process for companies to manage?


Craig Jeffery  39:07

Alright, so we’ll continue to move forward and shift to the implications of globalization, like many, many organizations are more countries, Tony gave the example there. Greif is in 41 countries are adding I think two or three more from just to Treasury payments perspective. There’s a lot of lot of changes that and requirements that continue to grow. They never seem to shrink over time. So I’ll turn that back over to Fides to help us out here.


Philip Anklin  39:37

Yeah, take it over. I mean, yeah, we’ve seen what happened on the in the world, right, and how important it is that all the payments that are going through are correctly sanctions and validated before they are sent to the bank. So in this in today’s interconnected world, and we’ve just seen the results from the survey, you’ll see how many payments are going across order to countries abroad, it’s really crucial to be compliant with all these international sanctions and regulations. I mean, that’s, that’s paramount. And therefore sanctions screening, it’s like, which involves checking payment instructions against lists of sanctioned individuals and entities has just become an integral part that you need to fulfill as a treasurer, many. And I think it’s also quite difficult to be up to date when it comes to updated lists, up to date, compliance, etc. So many institutions and corporations, of course, are now outsourcing this, this critical function to specialized providers like feeders. So we have the most updated lists that are continuously updated to really ensure that whatever it’s leaving, or whatever instruction from corporate is being sent to the bank is properly sanctioned. And there is no reputational damage. And this is what it is all about, right? You want to protect the reputation and to safeguard it. And therefore, it’s really essential that payment instructions are thoroughly screened, and validated before they’re being sent to the bank. The second part, the format lifespan, in the lower part of this, of the slide, that goes a little bit into what I’ve just initially said, in the area of CSV, for example, that is, of course, more and more going away. Also, these current message types from Swift, the MT101, for example, the traditional Treasury payments, the high Well, the Treasury payments are also the MT940, that we all know as the account statements. There isn’t. There, they are being decommissioned sooner or later, because they’re not just not delivering as much information as they should. Of course they did when they were introduced at the time, I think it’s, it’s decades ago, or they’re quite old. But these days, they’re just not having enough data within the within those files that you can properly reconcile on clients. And so you want to have as much information from the bank as these days as possible. So they know exactly from whom did I get this payment, or to whom did I send this payment, you can do reconciliation, automated, that’s a big benefit, of course. And on the other hand, you want to send or you have to send so much information within the payment file that is accepted by the bank, not only for regulation, but also for all these corresponding banks with cross border payments. Every Every country has its own specifications towards like, how a payment format should look like. So there is local specifications or bank bank specifications, there is country specifications. So the more countries you send your money to, the more complex it gets, because you need to have the right data at the right place in the right format. And therefore, whatever is currently known as the standard, like I said, the MT101 for Treasury payments, MT940, is somewhere being replaced by the XML files, the ISO standard, because it’s just delivered enough. Or it has a container where you can even include all the data that is required to properly execute payments and to properly do reconciliation.


Craig Jeffery  43:45

All right, that brings us to our third poll question slide. Those are up in the screen. I know there’s a couple of people who aren’t seeing the results, maybe can’t find them that may be from security settings, but they should be up. So it’s double stack at single choice. speed matters to us for payments in the following way. Yes, close to instant matter. So that’s the quickest, yes, quicker is important over time. In other words, moving faster is it becomes more important over time, and no, there’s no need to go faster. Second is about detail. So information, information, matters to us or detail matters such information in the following way. Yes, more information is better, and we can use it. Yes, more information is better, and we want to be able to use it for AR recon, Treasury, etc. And then finally, a comment about the webinar chat. We have enough poll responses. So we’re all good there. Save those for the next webinar, if you would, that would be awesome. And then finally know we have received enough information for the foreseeable future. So this is about detail. And as soon as we get enough, Brian, let’s pop that up. I’m just thinking about the time we’ve got. We’ve got a quite a bit of good information over a certain period of time. So quicker is important over time, close to instant matters. And I think those are probably driven by use cases. And then there’s some comments about the information reporting.  Who would like to make a comment or two before we move on?


Mark O’Toole  45:22

Yeah, interesting results there, I, you know, I’m not surprised that people aren’t saying instance, over say things like security, and that kind of thing. But, you know, incident is great if you’re, you know, Uber, and you’re trying to, you know, distinguish yourselves by your ability to be able to pay somebody instantly, like an Uber driver, or DoorDash, or something like that. But certainly, you know, from my experience, people, you know, the quicker more important over time, sure, you know, as efficiencies improve, or as more adoption of APIs would grow over time, you know, you’re gonna get a lot of that efficiency and some some more of that speed. But at all times, you know, you’re you’ve a fiduciary duty to protect, protect the cash, protect your money, protect your payments, protect from fraud. So I would imagine, you know, being able to do that as a paramount importance, in addition to, you know, just being able to get better visibility, of course, into that. So you can get easy forecasting quicker at maybe creating a forecast by getting your actuals and things like that. But certainly, when you think about fast, I mean, there’s a lot of security considerations there. That still being thought through and still happening today, when we hear about hacks and things like that. Whereas with a file exchange maybe takes a little bit longer today, but there’s more correction possibilities, and avoidance of some fraud and implications. So there’s definitely a business case for delayed payments. And, you know, companies like Uber can make an argument for that instant payment or TPE, I suppose.


Craig Jeffery  47:06

Excellent. Tony, we’re gonna bring you back in. So what does what’s not what’s on the treasurer’s mind? What do you desire need for for speed, as well as some of these other areas. I can, let me know if you want to cover some of the stats on the bottom, or if you want to talk through the topic.


Tony Krabill  47:25

I can talk through the topic.  I think, most treasures fast is good. But when it when it comes to payments, instant is usually not required. That, of course depends on the industry and the use case. But but when it comes to data, I do believe that faster even instant is important that at least for me to maintain certain process flows and avoid inefficiencies. I don’t want my people or people in accounts payable or accounts receivable, for example, sitting around unable to move on mentally from a, you know, somewhat menial tasks, because they’re tethered to waiting for a confirmation to come through or performing a task that could be automated, for example, I want them to be able to get all the data they need instantly shut that process down and move on mentally. You know, for example, you know, within AP, if we solve for that complexity, then any efficiencies can be squeezed out of the system. So an AP analyst doesn’t have to check to see if a payment was sent or excuse me a check. Yeah, check to see if a payment was sent. It’s just pushed to the dashboard, they can mentally move on from that and do something more value added. Same thing for Treasury, we’re not sitting around waiting to find out that some some payment was moved if a debt repayment happens, if I always know where my cash is in real time, and cash positioning is never a distraction, I can just do it and then move on to something more higher value added kind of like what’s in that bottom right corner. That’s I think, where most people in Treasury would prefer to spend their time.


Craig Jeffery  49:03

Yeah, excellent. And I know you’ve, you’ve already talked about some of the broader areas and needs it’s not just instant, maybe things go faster. Any additional comments on this broader topic?


Tony Krabill  49:20

Not from me, I’m not sure if it does that. Any other comments?


Mark O’Toole  49:26

You mean on the customer on this slide here? I mean, you know, here’s what I hear all the time. Particularly if it’s, you know, corporate treasurers are looking for a better user experience. They’re looking for ease of use. They’re looking for automation, and transparency. So you know, if, you know, questions you would pose I guess is Could I get kind of like get my information in real time to Tony’s point there? Can I simplify my cash visibility and do more proactive liquidity management? Can I automate my entire banking line Escape, you know, with maybe just a single connection and not have to worry about all those points or points or portal sign ons, etc, can I improve my operational efficiency so that other parts of the organization have that data in real time? And can sort of speed up the things that they want to do on that side? You know, do should I need to worry about validating data? Can I do forecasting quicker and in order to do forecasting quicker, I need to get a better, at least initially, a better understanding of where my bank balances are, where’s my cash today? So I can go into do making key decisions around that, can I reduce manual efforts and manual errors and things like that, if I’m stuck on spreadsheets, and kind of in control increased, really, the control around all of that, and I would posit that, you know, those solutions in treasure aggregation are available today. And so, when I see the poll results, a lot of people are still doing, you know, a significant portion of some of this manually. That’s great news, you know, there are affordable solutions in the marketplace that can significantly improve your operations and the management of cash.


Philip Anklin  51:18

I mean, just to give some, some additional points here as well, I mean, at the end, it’s just, it’s just covering everything that you would like to achieve to be really efficient. I mean, from a customer’s perspective, and from a treasury perspective, enhancing the Treasury experience, I mean, revolves around simplifying processes, increasing efficiency, providing real time accurate information. This improvement is not only empowering treasurers to make good decisions, quick decisions, but of course, also reduces the risk of reduces the risks overall, and at the end also contributes to the to the wealth the financial well being of the organization, because you know, exactly what you have what will be sent out. And based on that you can properly to make sure that your organization is well well equipped at the at the right time with enough money. And if not, then you can take precautionary measures to take to make sure that it is well equipped with money.


Tony Krabill  52:28

Yeah, and Craig, actually, I will jump in on the slides. So okay, great. We we have over, as I mentioned earlier, 400 bank accounts around the world. So I could speak to every one of these items on the slide. But, you know, to us, we get that data fast, it’s in rich text format, or excuse to enrich in a rich format. It’s in a repeatable, and a format that can generate automation and efficiency. The tools that we have allow us to use the data easily, everything is connected. And instead of running the machine all day long, if you will, were freed up to either just do the exception checks, or perform higher value added activities, as I mentioned earlier. So you know, it’s, to me, it’s all of these, we can spend time a lot of time speaking to but I think they’re all important things.


Craig Jeffery  53:26

Well, that brings us to our takeaways. So these are the items that we wish to leave with you as a summary of some of the things that have been said, how do you bring these back to your particular situation? So let’s go Tony. And then we’ll, we’ll let the two gentlemen from for this go. And I’ll wrap it up with the checklist. So, Tony.


Tony Krabill  53:46

Yeah, just to continue the thought from the previous slide. Like, for example, I don’t own AP, but I own making sure that AP has the ability to get what they want from the banks in terms of data timeliness, etc, that end to end process. I don’t own it, but I own making sure it knows what the banks have to offer us. What used to be pie in the sky solutions. I’m I’m getting old now. But you know, from earlier in my career, you know, these things were only for corporations that have large budgets, and those are just much more attainable today, to get that end to end that end to end process automation. And you know, with the level of interest rates, where they are and where they’re going the business case for making sure that your processes are efficient, and your cash is controlled and concentrated. It’s it’s a much easier sell than it was five years ago.


Philip Anklin  54:44

Yeah, and in terms of the automation, I think at the end, it’s similar to what I just said previously, what you need, you need the right system at the right time. So if you you don’t need the big ERP at the very beginning if you grow into into the treasury world So to say your if you have if your organization becomes or has a need of a treasury department, I mean, you just need that very beginning visibility, and you need proper payment workflows, proper controls, proper user management. And that’s the basis right. And if you are growing into into situation where you think in your PII or even a TMS, is this beneficial for the corporates as well, then it’s okay. I mean, if you, for example, have Fides as the aggregator of all that data, that we can just plug and play with whatever ERP or TMS, the client is using. So automation is key. Most of the time Treasury teams are rather small, they don’t have that much people as typically pa ours, and therefore they need to be very efficient. And I need to work with the right players in the market to really make sure that the processes are automated, the processes are on the control. And yeah, the money is here at the right time and the right place.


Mark O’Toole  56:03

Yeah, and I think you know, from from a payments perspective, you know, one of the laggards if you like to finance and treasuries is in the AP area, where people are continually doing direct connections, or maintain their own host-to-host. So if you’re an organization that is getting into global payments, or expanding, as people are this year, you’re their bank landscape, and opening up new accounts and new payable accounts and things like that, you know, considerations around scalability? How do I scale that do? Do I have the right team internally to continually maintain and builds direct direct connections with the banks? Or is this something I should outsource? Do I have enough expertise inside the organization that understands all the various payment options and payment types and payment formats? And, and more importantly, if I’m doing those direct connections myself? Do I know the format’s that each of the banks that I’m banking with will accept and so you know, that problem becomes exponentially larger as you grow. And so the positive question, there would be a should I need to worry about this at all? Can I outsource that? Or can I work with a treasury aggregator that, you know, all now I need to worry about as one single connection, and then somebody else is taking care of any of the conversions, worrying about, you know, ISO format, in an XML, and PAIN001. And, you know, and all I need to worry about is great, I’ve got controls and security round that payment process. I’m getting ACH files back and I can see where where my payments are.


Craig Jeffery  57:39

The last the last column here on the checklist, what the first one is, identify what support scalability Do you have? Do you have a team that can manage that modern tech? Are you building it in every system? Do you use different types of providers to support scalability for payments for information? How is that supported? So there’s a Those are decisions that you want to make strategically and then on a detailed level? Second point there is where are the options for removing defects and points of exposures? How do you eliminate? You know, I think Tony gave an example of there were files, let’s say even for payroll that would go around and CSV files and load into a portal. Each of those types of activities represents a point of exposure, how do you remove those right, so their point of exposure, they’re also a point where defects and errors can occur. So thinking through the process, an automated process, from end to end, allows you to remove many of those defects and the risks that you face from that exposure. And then finally, this last point, daily visibility, and Bailey reconciliation is the new standard that needs to be automated. You need the information, just like accountants will not tolerate you saying, let’s let’s do a cost benefit analysis on which accounts need to be reconciled. The cost of doing business bank accounts that you sent, see that information, you want to do it in an affordable manner. But you need to see it just like you need to do at least a monthly reconciliation, or a daily reconciliation or a treasury proof perspective. That’s a cost of doing business. Given the increasing risk and the capabilities that exist, get that information if you don’t need it, you don’t need the account. And so that should be a positional position that you take as an organization. It’s a cost of doing business. It’s commercially reasonable to do that. With that, we’ll turn it back over to Brian, I want to thank Tony, Mark, and Phillip very much for today’s discussion, everybody who’s here, thank you for participating in the webinar. So over to you, Brian.


Announcer  1:00:02

Thank you, everyone for joining us today. The CTP credits, today’s webinar slides, and a recording of today’s webinar will be sent to you within five business days. And for more on bank connectivity, be sure to listen to the Treasury Update Podcast episode 239 with Fides by clicking the link in the chat box. Thank you. We hope you have a good rest of the day.

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