Cash management in 2022: digital and real-time treasury

Real-time liquidity sharing across entities, helps corporates with multi-entity business models to increase reliance on their own group’s intra-day liquidity to fund payments in a frictionless manner instead of relying on bank credit. Businesses that do not have in place sophisticated forecasting capabilities are able to benefit from real-time liquidity sharing by achieving higher straight through processing rate of payments and eliminating intra-day and end-of-day liquidity costs to fund payments. In addition to the abovementioned use cases of real-time intra-day liquidity sharing between physical accounts, the adoption of real-time liquidity sharing between multi-entity virtual and physical account structures is expected to grow not only for corporates with mature treasuries, but also for expanding digital natives as they diversify their businesses and chart their course towards becoming super apps. For corporates, where weekend activity of instant payments is becoming material, there is a clear need for seven-day sweeps emanating to avoid weekend overdraft charges. Select corporates are transitioning from end-of-day zero balancing sweeps to targeted balancing sweeps to have enough liquidity to fund after hours domestic and cross-border instant payments. Traditionally treasurers reviewed their sweep structures once or twice a year. Treasurers are turning to their banking partners to provide them liquidity sweep structure visualisation tools with the ability to self-serve and make changes dynamically. These active changes will help optimise the use of liquidity surge on sales days or to support unplanned shortfall in group cash position. While adoption of electronic submission of e-signed documents started in 2021, this digital onboarding of liquidity 4 | treasurytoday © January 2022