Jordi Guaus is the head of mobile payments at La Caixa in charge of all near field communication (NFC) projects and chair of the Mobey Forum Business Workgroup, which looks at how corporations can use the mobile channel to move money around more easily to aid efficiency and ease procedural and transactional delays.
Senior level managers can use mobile devices such as smartphones – or even better tablets which represent graphs better – to check on the state of their businesses’ finances instantly. This real-time information can be used in a myriad of ways, for instance to provide data to assist in ‘sweeping cash with the sun’ or to raise an alert if millions of dollars are trapped in a subsidiary account doing nothing.
“Directors and board members can use the data [and associated analytics] to instruct treasurers to move money or investments if a red flag is raised, effectively to nudge them into action, or treasurers can themselves use the data available on mobile devices to take action [depending on the level of hierarchy and procedures in each firm],” says Jordi Guaus, head of mobile payments at La Caixa and chair of the Mobey Forum Business Workgroup, speaking at the trade body’s inaugural Mobey Day event at CosmoCaixa in Barcelona.
“The main selling point of the mobile for treasurers at the moment is the ability to authorise a trade when on the move, so as not to delay the supply chain at large or small corporations [you can electronically ‘sign’ transactions and use SMS texts too to help speed up throughputs], but I believe the mobile treasury will eventually be able to offer much much more.”
Guaus accepts it is not there yet, however, admitting that mobile corporate banking and treasury functions are typically overshadowed and under-developed at the moment in comparison to the retail banking, near field communication (NFC) and m-commerce shopping segments where mobile wallets – either cloud-based like Google’s offering or prepaid like Visa and MasterCard’s – tend to dominate the discussion. Some of that is down to the transactional differences across borders and regions at present, with a desperate need for more development work on non-proprietary systems and on electronic bank account management (eBAM), e-invoicing, universal messaging standards and so forth, but it is also down to the differences between the sectors.
As Guaus says, “there is a big difference between the retail and corporate market, just in terms of scale and usage alone. Paying for a single product in a shop with the tap of a mobile is very different to authorising one million transactions in one overnight batch processing file to pay staff wages or bills.” Treasury management systems (TMS) can automate some of these functions – and be linked into mobile devices with certain authorisations – but the scale will always be very different, presenting its own unique security, business continuity and other challenges. The customer-facing consumer type of mobile innovation simply may not be suitable for treasury departments, although lessons can often be learnt from applications deployed here at the so-called ‘bleeding edge’.
Standardisation and Interoperability
Standardisation work is essential if an effective mobile treasury channel is ever to become a reality. As Guaus admits, however, it is a big and difficult area and delivering interoperability is not easy. “It must be the same in Spain, in the UK, US, France and so on. La Caixa can develop our own mobile finance and payment solutions – and we do – but corporate treasury customers want to send transactions to other banks and institutions too, so the ability to cross proprietary systems and borders is crucial in this sector.”
“The single euro payments area (SEPA) should help encourage cross-border payments and interoperability, significantly aiding treasury departments in Europe. I know the European Payments Council is working on a SEPA Mobile framework and developing common m-payments as we speak, as indeed is the Mobey Forum, where I am chair of the Business Workgroup. Days like this at the CosmoCaixa science museum in Barcelona for our inaugural Mobey Day don’t hurt either as they encourage debate among various stakeholders in the value chain. SWIFT has a key role to play as well, of course, as it offers the prospect of truly global multibank protocols, plus they have a number of initiatives underway that could help treasurers such as eBAM, SWIFT for Corporates, the Trade Services Utility (TSU) and so forth. The 3SKey digital identity security architecture from SWIFT could also be useful.”
So it seems that there is work underway to make mobile payments more transportable and relevant to major multinational corporations but it will of course take time. For now, like it or not, mobility, data reporting and authorisation applications are still the key assets of the mobile channel for the treasurer because they can help to speed up processes. “T+3 is no good if someone else is pushing through transactions and processes faster,” points out Guaus. “Instantaneous movement of money helps treasurers, particularly those that work at manufacturers or in customer-facing businesses that rely on ‘just-in-time’ deliveries and procedures where any delays can be very damaging. The speed benefit is also applicable for investment decisions [for those corporations fortunate enough to have large reserves of cash]. There is no reason why we should not, eventually, have such a ‘just-in-time’ system across the entire financial supply chain too. And mobile will play a key part in this.”
“I’m a treasurer in a sense myself,” adds Guaus, somewhat optimistically when describing his role looking after the finances, orders and payments at his local tennis club in Barcelona. It’s true that he uses his mobile phone in this capacity to check balances, electronically sign orders and look after the finances of the club, but this small scale usage is a long way from the activities of multinational treasurers. However, the same functionality is often used by corporate cash management or treasury employees on a much larger scale, usually with appropriate e-invoicing technologies. In a few years’ time hopefully more rich capabilities and data interrogation abilities will be added to the mobile treasury channel, allowing it to catch up with the fast developing retail and consumer-led innovations that are currently sweeping through the customer-facing side of mobile financial services.
Europe’s opening banking regulation is finally here. After months of preparation across the continent, the Revised Payment Services Directive comes into effect on January 13.
The revised Payment Services Directive regulation, regarded as one of the most disruptive in Europe’s financial services sector, will begin to make an impact on January 13, 2018.
The cost of compliance efforts for banks has increased exponentially in recent years. This is especially true for those banks that are active in the global trade finance domain, where the overwhelming expectation is for compliance requirements to become even more complex, strict and challenging over time.
This year promises to further the regulatory compliance burden imposed on financial institutions. How are firms in the sector responding to the challenge?