Bank of America: Reimagining Transaction Banking

Faisal Ameen, Head of Global Transaction Services, Asia Pacific

The past two years have made it clear that companies need to stay nimble and adapt quickly to change. The ability to innovate is also a key factor in ensuring they remain relevant in today’s evolving landscape. As such, developing the right strategies to navigate challenges across business functions, operating models and liquidity concerns continue to remain top priority for many companies. In transaction banking, staying ahead of developing technologies and the ability to deliver timely advisory and relevant solutions are increasingly becoming more crucial in supporting companies through this age of transition. We spoke with Faisal Ameen, Head of Global Transaction Services, Asia Pacific, Bank of America to understand how banks are addressing these demands and reimagining client experiences.

Digitising the Corporate Treasury for the Next-Gen

Cash visibility and forecasting have consistently been a top priority for treasurers. The pandemic has clearly demonstrated the need for companies to not just have clear visibility of their cash balances in different countries and currencies but also be able to quickly acquire reliable cash flow forecasts so they can anticipate their liquidity needs and determine their financing strategies.

Given the volatility in the operating environment in the last two years, the ability for accurate and timely cash forecasting has never been more important. Most treasury platforms have limited forecasting functionalities preventing companies from acquiring highly accurate cash forecasts. Whilst some companies are happy to continue using excel spreadsheets, others are looking to improve efficiencies and not waste key resources on manual and time-consuming repetitive forecasting work, which often can be not timely and inaccurate. Reducing forecasting inaccuracies is thus an important priority as it leads to more optimal working capital decisions.

As a global bank, Bank of America is well positioned to support its multinational clients in their cash forecasting needs by leveraging the power of its global platform. Faisal said, “Our CashPro® platform is a fully integrated multi-channel banking solution that allows our clients centralized access to view all account activities and perform a complete range of transactions across a range of options including online, mobile, API and file. It also offers access to accounts with other third-party banks through its multibank reporting and payments capabilities.”

The bank recently launched its CashPro® Forecasting tool, which is a first-of-its-kind bank offered cash forecasting solution using machine learning technology. It automates clients cash forecasting process while improving accuracy, allowing clients to make intelligent working capital decisions across their organisation.

Unlocking Digitalisation and Standardisation of Trade

International trade has been impacted by multiple trends over the last few years – the pandemic added significant disruptions to an industry already dealing with rapidly shifting supply chains and trade disputes. While the initial impact of the pandemic highlighted the importance of having diversified and resilient sources of supply, subsequent bottle necks in transportation further extended the time it took to receive goods and highlighted the challenges of global logistics. This was on top of a backdrop of deepening focus on adhering to sustainability standards across the supply chain as well as in an environment where work from home was a default in many sectors.

There was a significant impact on trade finance with corporates increasingly leveraging supply chain finance to support key suppliers in an environment where the working capital cycle has expanded due to manufacturing and logistics challenges. Supply chain finance has also become an important tool as corporates look to shift sourcing and strengthen partnerships with a diversified set of suppliers.

More broadly, there has been an increased focus on digitisation – an area that has traditionally been a challenge, given the varied number of parties involved in any specific flow and the requirement for paper documents under various local regulations and practices. Even pre-pandemic, the industry, including governments and banks, was looking at ways to improve efficiency through digitisation with various eco systems being developed, many of them based on block chain or cloud technologies. However, the challenges arising from the pandemic has resulted in an increased urgency to digitise wherever possible, including specific parts of the overall flow, such as transaction initiation or leveraging various platforms to interact with suppliers. While banks already had tools to cater to such requirements, both front and backend systems are being strengthened or augmented leveraging new technologies, thereby not only catering to client demand but also helping to drive process efficiencies.

“Ultimately, we see sustainability and digitalisation coalescing, with digitalisation bringing much greater transparency and accountability, enabling faster and more efficient delivery of trade finance solutions.”

Building a Sustainable Ecosystem

Focus on sustainability standards, not only within corporates but across the wider supply chain, has also seen increased use of trade finance as a tool to help drive behaviour. There have been several supply chain finance programs that incentivise suppliers to meet certain pre-defined sustainability criteria with lower cost of financing. There has also been an increased usage of third-party agencies to do an independent validation as well as a focus on clearly defining sustainability criteria and reporting around their achievements.

“At Bank of America, our commitment to environment, social and governance (ESG) is a core component of our responsible growth strategy. One of the ways we offer leadership in this area is through thought leadership. We are constantly engaging our clients by sharing our experiences and best practices and at the same time offering innovative solutions to meet their needs. This helps our clients to align their treasury functions with the companies’ broader ESG agenda,” Faisal added.

When it comes to sustainability, Bank of America has worked to deploy a range of solutions that enables clients to support and drive ESG within their value chain. For example, Bank of America has recently issued its second Equality Progress Sustainability Bond, where one of the use of proceeds is supporting the purchase of receivables from Minority-owned Business Enterprises (MBEs) and Women-owned Business Enterprises (WBEs) on-boarded onto Supply Chain Finance programs (both Bank of America programs and programs with other providers). In the area of supply chain finance, the bank offers programs that help clients support suppliers to meet sustainability criteria.

Ultimately, the bank sees sustainability and digitalisation coalescing, with digitalisation bringing much greater transparency and accountability, enabling faster and more efficient delivery of trade finance solutions. Ecosystem solutions will be one of the key enablers for digitalisation – an area where Bank of America has an active partnership with the Marco Polo Network – as they look to build towards the next paradigm of trade finance.

Future-proofing the Transaction Banking Ecosystem

Within trade finance, there is ongoing focus on supporting and driving digitalisation within its own business and for its clients. Today, the bank uses its globally consistent trade platform to not only initiate transactions digitally, and give customers real-time access to their data, but also to support its supply chain finance business, with both buyers and suppliers utilising the platform to optimise working capital and drive procure-to-pay efficiency. The bank also leverages technologies such as AI and OCR to enhance back-office efficiencies, thereby enabling them to streamline and simplify the client experience.

Across the organisation, there is a huge push on digitalisation and moving away from manual and paper processes, right from point of onboarding and KYC to daily payment processing and account reconciliation. Bank of America’s award-winning e-banking platform, CashPro® Online, offers more than just the capability to conduct online transactions and review account activity. With CashPro® Assistant – a suite of digital solutions designed to simplify onboarding and service –clients get a better service experience, including the ability to electronically exchange and sign documents, create and monitor online service requests and track international wire payments in real time, all within one convenient platform.

The Future Lies in

Emphasis on Data and New Technology

There will be greater emphasis on data and new technology, such as the internet-of-things and artificial intelligence both from corporates and banks. Technologies that enable insights, enhance products, create new services, and streamline operations would get a lot of prominence. Corporates will look for data-driven perspectives and solutions that give treasurers the efficiency to help them make better decisions.

Banking and Working Anywhere, Anytime

Companies will look to run business from anywhere, anytime. Accordingly, companies would look for flexibility in platform and solutions. This would lead to greater demand for experiences that provide end-to-end digital enablement, including proactive communications, enhancing system mobility and messaging, etc. As companies adopt more digitisation and more transactions become electronic, companies as well as banks will focus even more on cyber security and fraud prevention, with a significant increase in investment in these areas.

Going Paperless and Becoming Real Time

There will be a significant decline in the usage of physical cash and paper instruments and the adoption of real time/instant payments.

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