We delve into the current pace of innovation and delivery to market and outline how process optimisation and partnerships with cutting-edge fintech companies can accelerate progress.
Corporate treasurers want – and need – a continuous flow of innovative solutions to stay competitive. In this article, we delve into the current pace of innovation and delivery to market and outline how process optimisation and partnerships with cutting-edge fintech companies can accelerate progress.
The economic and financial landscape is undergoing rapid transformation. As consumers increasingly prioritise speed, convenience and accessibility, finance departments and treasuries, must keep up. This means innovating to enhance visibility, security, control over financial activities, and increasingly, the end-user experience. It’s perhaps now more than ever that the need to prioritise innovation is pushed to the fore.
However, innovation doesn’t just happen magically. It needs a thorough understanding, vision, creativity, practicality, realism, and persistence to make it successful. The driving forces behind each new solution must create value for the intended end user or should address their existing operational or compliance issues, and in some cases, deliver both.
Putting theory into action
Let’s consider the surge of e-commerce, for example. With more corporates embracing digital sales channels throughout the pandemic, and the rise of marketplaces as well as direct-to-consumer (D2C) sales, corporate treasurers are looking for better ways to manage payments and collections.
By leveraging API technology for example, which is known to be a quick to deploy and minimally invasive solution, treasurers can integrate and automate payments on their digital commerce platforms by providing real-time transaction details, similar to purchases or sales on an e-commerce marketplace. Standard Chartered’s Payouts-as-a-Service (PaaS) precisely aims to address this need.
In addition to embedding and automating payments, corporates can specify payment preferences regarding who, when, how, and how much to pay. These preferences can be pre-set or provided as needed. The bank then executes the payment contract automatically based on these parameters, eliminating the need for clients or their counterparties to issue separate payment instructions.
This approach offers clear benefits for treasury teams. As Michael Spiegel, Global Head of Transaction Banking, Standard Chartered explains: “The ability to streamline payments significantly reduces administration overheads and frees up time that can be allocated to higher value activities to scale the business”.
Reducing risk through innovation
Of course, not all risks associated with e-commerce can be addressed solely by the PaaS solution. Inherent trade-related risks also need consideration. For instance, the delivered goods may not meet quality or quantity expectations, and suppliers face the risk of non-payment if buyers are dissatisfied.
“With this in mind, Standard Chartered, in collaboration with Tazapay, offers an innovative digital escrow solution called Escrow-as-a-Service (EaaS),” explains Spiegel. Through this partnership, escrow funds are held both in the buyers’ market and the escrow location. Once the escrow conditions are met and validated, the funds are automatically released to the supplier. This process helps mitigate risks associated with international trade for both parties.
According to Spiegel: “Solutions such as PaaS and EaaS support the growing ecosystem of international B2B e-commerce and marketplaces, streamlining and automating workflows and providing peace of mind for treasurers.”
Partnering for progress
The above example shows how some banks have begun seizing partnership opportunities in the fintech space as they bring mutual, long-term benefits. To truly deliver, fintech companies require access to real-world scenarios at scale, together with credibility, and substantial funding. By partnering with a large bank, fintech companies gain access to these resources, unlocking possibilities for innovation and benefiting not only the bank, but also corporate clients and end-users.
Here are a few bank-fintech partnership case studies that showcase improved efficiency, automation, and innovation for corporate treasurers:
Streamlining e-commerce payments and collection globally
Alongside the PaaS solution, in May 2023, Standard Chartered partnered with Tazapay, a global payments platform, to enable global marketplaces and e-commerce merchants to collect payments from buyers locally in over 70 markets based on their preferred payment method.
This solution is based on a single application programming interface (API), offering a cost-effective and frictionless checkout experience called Tazapay Checkout. It includes buyer protection, leveraging Standard Chartered’s Escrow-as-a-Service (EaaS) offering, with features such as document verification and customised payment release upon transaction completion. The collaboration also enables onboarding of third-party sellers across ASEAN, South Asia and the Middle East.
Global working capital collaboration
In October 2022, Standard Chartered signed a strategic collaboration with Taulia, a working capital solutions provider owned by SAP. The agreement involves the parties collaborating on a range of working capital finance solutions with an initial focus on supply chain finance (SCF) and dynamic discounting.
Taulia’s integrated technology and platform, combined with Standard Chartered’s global presence and trade finance expertise, will see Standard Chartered and Taulia extend the reach of their working capital finance solutions across existing and new client networks, especially multinational companies that require the expertise and support at a global and local level.
The combined footprint is expected to deliver greater opportunities to support companies in the West with their supply chain flows into Asia, Africa, and the Middle East and help our clients build greater supply chain resilience.
Investing in a blockchain-based global network
Standard Chartered announced its investment in Partior, a blockchain-based global network for value exchange, during the November 2022 Singapore Fintech Festival. As a founding shareholder, Standard Chartered will leverage its global payments capabilities and clearing footprint to enhance Partior’s international reach.
Additionally, Standard Chartered will serve as the first euro settlement bank for the Partior platform, facilitating transactions in its first eight global currencies – USD, SGD, GBP, EUR, AUD, JPY, CNH, and HKD – in 2023.
Standard Chartered – and in turn, corporate treasurers – will benefit from the partnership by deepening its blockchain innovation capabilities for global value movement. This accelerates deployment of blockchain technology across Standard Chartered’s global wholesale payments and settlements network, while increasing the utility of Partior’s technology in global capital markets. The aim is to deliver speed, efficiency, and visibility of domestic settlement systems to clients’ cross-border transactions.
Preparing for the future
Whether banks innovate solely or in partnership with fintechs, it’s crucial to recognise the role of treasurers in the innovation process, as they are the ultimate beneficiaries. “Open dialogue, candid feedback from treasury teams, requests for new functionalities, rigorous user testing, and visionary perspectives are essential for successful innovation and for the treasury of the future. By prioritising these elements, banks and fintech companies can deliver innovation when and where it is needed most,” concludes Michael Spiegel.
This article was also published on Treasury Management International.
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