Bringing automation possibilities to large corporates in the Nordics

APIs, ISO 20022, and cloud solutions – this trio lays the foundations for increased automation and changed ways of working in cash management. Harry Rymert, Head of Ecosystem Development at SEB, embraces the shift:
“As an example, when it comes to APIs we have ongoing pilots where we provide real-time account balance, straight to our customers’ treasury management systems.”

When talking about trends within cash management Harry Rymert is certain that API technology, the ISO 20022 standard and cloud solutions will be making a big impact on how corporates operate.

“It will give large corporates and financial institutions access to a greater buffet of automation and analytics tools for accounts management, HR processes and liquidity management.”

So, let’s dig into it the different trends one-by-one, as seen from Harry’s perspective.

APIs – a switch in the information exchange between banks and corporate systems

Today, corporates normally send and receive payments in batches, at certain points in the business day. This is changing with the use of application programming interface (API) technology, which enables real-time information exchange between corporates’ systems and banks. Harry Rymert lists several advantages from this development.

• Faster overview of balances and transactions. This is the most obvious effect of real-time information exchange.
• Less online banking platforms. Today corporates, who use several different banks, typically need to log on to a number of banking platforms, to get a full overview of their bank accounts. Open banking and APIs make it possible to have all information available in the corporate system of choice, without manual operation.
• More automation. The availability of real-time data, from several sources, also enables more automation of routine treasury work within for example accounts and liquidity management. This, in turn, creates an opening for new service providers.

ISO 20022 – global migration to a shared payment standard

Through SEPA, a harmonised payment standard was introduced in the EU. Now the migration from local standards to ISO 20022 is happening across the globe. According to Harry, this paves way for smoother reconciliation work and overall use of structured financial information at the corporate Treasuries.

• Richer and better-quality payment and reporting data is at the core of ISO 20022 and takes away much of the hassle of payments and will enable greater automation, even in exceptional cases.

Cloud solutions – easier system updates

The ERP and TMS systems used by large corporates, to manage financial operations, are often custom-built. Now there’s a shift to more standardised, cloud-based solutions.

• For large corporates the big advantage of this development is less work, costs and pain-points related to maintaining and updating their systems in the long term.
• For small and medium-sized corporations the gain is access to new functionality, without having to build it themselves, from scratch.

Working together with clients

It is safe to say that plenty is going on in the world of cash management. Harry Rymert stresses the need to be working together, to get the most out of the technological shift.

“We feel that we at SEB have an important role to play in the transformation. Together with clients we have a number of ongoing pilots. One example is testing APIs to achieve a liquidity overview, across several banks, in a corporation’s treasury management system. There is also a trial with real time transactions and payment confirmation – to speed up the release of the goods ordered by the customer in question.”

SEB is now putting a greater focus on large corporates and financial institutions.

“The SME segment has already started its transformation and we have been able to provide a real strong offering in terms of cloud-based ERPs and bank integrators. We are now focusing strongly on bringing these benefits to the large corporate and FI segments in the Nordics – with plenty of partners, direct integration options and APIs for our customers to choose from.”

Although the future benefits will be huge for everyone, it’s important to remember that transformation doesn’t come for free – especially not when transforming critical infrastructure from the ground and up. A requirement for reaping the full benefits of ISO20022, real time APIs and cloud is the fundamental changes in central bank infrastructure, local clearing systems, and bank and customer systems that we are currently only in the midst of.