Advancements in technology have led to the digitalization of cash management to meet the requirements of corporate treasury and finance operations. Banks with technology at the forefront offer innovative and excellent digital cash and liquidity management solutions to meet the specific needs of treasurers, who want to gain a competitive edge, optimize performance, and conform to regulatory guidelines.
Businesses with continuous cash flow have to manage cash meticulously for sufficient liquidity in operations. How well they can organize the cash flow is critical to growing better. Cash management is an essential financial activity that has taken on a new form in modern business.
Digitalization has a major impact on cash management by providing electronic fund transfers, a consolidated view of cash balances in bank accounts, and prompt recommendations and notifications. Digitalization has led banks to innovate new cash and liquidity management solutions to differentiate their services. Here’s how it helps banks design their services to optimize a customer journey.
#1 Automation
With more and more banks and financial institutions investing in robotic process automation (RPA), there are significant advances in the use of this technology in cash management. The digital process makes most monotonous money transactions faster and more efficient. For instance, you have banks offering unique cash-management platforms for instant payments and collections. Some prominent ones include:
- DBS PayNow Corporate: With PayNow Corporate, you need to use only your UEN or Unique Entity Number to receive and make quick payments. You can carry out GIRO and FAST transactions through PayNow in Singapore dollars. To use this facility, you need a DBS corporate account and access to DBS IDEAL.
- Fast And Secure Transfers (FAST): It helps make instant low-value payments in Singapore dollars. You can use FAST to make time-critical payments and save on charges or penalties for late payments.
- GIRO: Most companies in Singapore use GIRO to make low-value payments in SGD in large volumes. Using GIRO, you can conveniently pay your employees or vendors through their accounts in participating banks. GIRO offers a higher payment certainty and better cash-flow management for both the payer and payee.
- MEPS: For high-value, SGD domestic payments, MAS Electronic Payment System (MEPS) is the best choice. It facilitates prompt, certain, and quick payments and account reconciliation.
- SWIFT GPI: With SWIFT global payments innovation (GPI), you can make instant cross-border funds transfers. You can improve your efficiency with faster turnaround time and notification and better cash management.
- eGIRO: Most businesses in Singapore use eGIRO for better process efficiency and faster collections. This API-based solution helps your customers with easy setup on your website, thus digitalizing the direct debit process and saving the setup turnaround time.
#2 Cost reduction
You can avoid having employees engaged in repetitious and monotonous tasks by having a digital cash management system. There is no burden of having nonessential, time-consuming, and expensive infrastructural needs and obligations. With automated cash management, your employees can concentrate on core business operations. The lower organizational and operational costs will lead to more investments in other projects, better growth, and more profit.
For instance, banks like DBS offer a Notional Pooling solution to offset your cash balances in all participating accounts to get a net balance. You can use this for investments without borrowing money. Cash Concentration is another liquidity management solution to help you transfer funds between accounts and facilitate internal self-funding.
#3 Customer service
The advanced cash-management system can help a business offer great customer satisfaction. Customers, mostly millennials, are tech-savvy, and they want to carry out most of their transactions, especially money, instantly online. With net banking technology, you can help your customers easily make payments on your website.
For example, banks offer Credit Card Acceptance to help retail businesses get seamless payments from their customers. The all-in-one payment terminal helps customers pay using MasterCard, Visa, UPI, and JCB. It also allows easy customization to suit other payment methods like mobile payments and contactless payments.
#4 Financial planning
Companies with large volumes of incoming and outgoing funds need prompt reconciliation to get a clear idea of cash flow. This will help have more efficient management of working capital, better productivity, and better forecasting ability. All these will lead to making a healthy investment for growth and expansion.
Conclusion
Inventive digital cash management solutions from banks help businesses strategize and manage their cash flow successfully and make informed decisions.
