Macroeconomic Concerns Make Cash Management Urgent for CFOs and Treasurers

In the banking business, CFOs, treasurers and other financial leaders go to work with a one-track mind: Managing liquidity. According to a recent Deloitte survey, 84% of CFOs say it’s their top financial performance concern, followed by macroeconomic threats to that liquidity. 

Go a little deeper into the survey – beyond macroeconomic concerns – and an interesting profile begins to develop as to how that liquidity will be managed and forecasted. Seventy-six per cent of those surveyed singled out digital transformation and digital technology as playing a more important role in their overall strategy. Digital transformation has many different meanings depending on the bank. But more and more, it’s becoming synonymous with futureproofing. 

“For me, futureproofing means investing in technology you can build on five or even eight years down the road,” says Jing Wei Lee, head of finance for Singapore’s FOMO Pay. “I look at it like buying a piece of real estate. You want to make sure that the land you purchased can accommodate houses. But you also want the ability to add retail and commercial buildings as well. You need to buy something that makes you confident you can expand.”

FOMO Pay is a financial services provider focused on cross-border payments. It provides its services to merchants and other financial institutions with global collection and payout needs in over 70 countries, including China. As an example of how it works, FOMO signed a deal in late January with Klasha is a global technology company that provides cross-border payment solutions for online payments to and from Africa. By partnering with FOMO, Klasha will enhance collections for its corporate clients through Klasha’s platform, letting businesses receive payments in local African currencies while receiving payouts in their preferred currencies. From FOMO’s side, Asian businesses can unlock opportunities to expand into new markets in Africa and broaden their customer bases with Klasha and FOMO Pay’s joint efforts in facilitating cross-border payments.

With arrangements like these in 70 countries, the FOMO liquidity picture was very complex and relied on manual processes to get a single view of the cash picture. And it is consistently adding new banking partners like Klasha. To get a better handle on its cash management, Jing and his team turned to Bottomline to reduce manual efforts and centralize its account insights. It was part of a proactive effort to elevate payment workflows and cash management, with a focus on reducing manual efforts and centralizing account insights. The company recognized that adopting a streamlined approach would not only optimize processes but also provide a clearer understanding of its cash position, resulting in improved efficiency and tighter compliance in its financial operations.

By doing that, Lee hoped to make cash management an automated, exact science. 

“Before we implemented the cash management solution, we weren’t where we wanted to be in terms of seeing the whole liquidity picture,” Lee says. “Sometimes, we would only have a rough estimate. But now we have a complete picture. We know exactly where we are, and we know exactly what our own obligations are with cash management.”

The implementation of the cash management solution paid dividends early on. FOMO Pay began by implementing Bottomline’s Cash Management solution. Lee was impressed with the user interface that showed a picture of a combined financial ecosystem rather than pieces of it. It also made key financial data accessible to drive more effective liquidity decisions in real-time. It also took advantage of Bottomline’s status as a leading Swift bureau, which it used for real-time connectivity to local banks. This will become more important as FOMO expands into the Middle East and Asia. 

The project has delivered multiple transformation outcomes. In addition to obtaining greater visibility and control of its cash position across multiple banks, accounts, and currencies through a centralized dashboard, it has made significant enhancements to how FOMO manages sanction screening. Automation in the payment lifecycle covers the creation of the payment file in its back-office system, secures an upload to the Swift Bureau, screens against internationally recognized sanctions lists, and transmits to the recipient bank using the Swift network. Jing says it has increased FOMO’s straight-through-processing rates and bolstered compliance by implementing workflows that ensure the necessary approvals are received at each stage.

“We have a robust, proven, and easy-to-use treasury and cash management system at the heart of our payment workflow,” Jing says. “It’s like a central nervous system that monitors every transaction in and out of the business. Payments flow seamlessly from our internal payment systems through to our banks. Statements and confirmations are reconciled with our accounting system. The portfolio of treasury, payment and Swift connectivity solutions can support our requirements now and as we grow and evolve our business. We have a futureproof solution that can be part of our journey to further strengthen our position as a leading global digital payment solution provider.”

Jing says FOMO has also improved its ability to forecast cash positions, a capability missing before the cash management implementation. By implementing analytical tools that use current and historical data across the entire capital structure of the business, he’s an example of how treasurers and CFOs can refine their cash forecasting models to help make more informed decisions and strategically allocate their capital.