1.) John, what are the current trends in cash management you are seeing?
Globalization is a major trend. Today, more and more businesses need access to products and services that allow them to transact with trading partners that are domiciled overseas. For example, businesses need the ability to effect cross-border payments in foreign currency, and need hedging instruments to mitigate the risks associated with changes in foreign currency rates. Another example would be the ability to issue import and export letters of credit.
2.) Are there other trends you are seeing?
Another trend is the rapid transformation of the payments systems currently underway. Many of the payment channels that we have been using in this country are decades old – consider how little has changed in the world of checks, credit cards, ACH, and wire transfers over the past 30 years. Advances in technology and lower costs have made the digitalization and globalization of payments available to tens of millions of consumers and businesses. The legacy payment systems that are currently in use in the US are no longer meeting consumer expectations for speed and ease of use; and the expectations in the business community for speed, efficiency, back office integration and real-time access to transaction information. Same Day ACH is a great example of this. With Same Day ACH a business can settle a payment on the same day that the payment is originated. Until recently, this was available only through wire transfers - which are exceedingly expensive.
With this profound transformation, we see another trend: The faster and more automated our payments systems get, the age old issue of fraud continues to keep pace.
3.) How can banks help businesses avoid fraud?
The potential for fraud presents risk for any business, no matter how big or small. Cyber-security technology is crucial to the protection of businesses from unauthorized access to company funds and private information. Without these protections, cyber criminals can hack into the online banking systems that businesses use to access account information, transfer funds and make payments. Check forgery is still a pervasive problem for businesses as are fraudulent ACH transactions. We help businesses protect against fraud in numerous ways. We employ cutting edge technology to prevent hackers from penetrating our online banking systems. We provide positive pay and reverse positive pay services that prevent payment of forged checks as well as online blocks and filters to prevent payment of unauthorized ACH transactions. We also pay close attention to trends in cyber-crime challenging the banking industry and we educate our customers on these trends.
For example, “Business Email Compromise” has become a huge problem for businesses. Scammers penetrate a company’s email system, target employees with access to company finances and trick them into making wire transfers or ACH Payments to bank accounts thought to belong to trusted partners, except the money ends up in accounts controlled by the criminals. Many of these scams are carried out by transnational criminal organizations that employ lawyers, linguists, hackers, and social engineers. “Business Email Compromise” accounted for more than $8B in losses since 2017 and continues to grow.
4.) What is it that businesses should look for in a great cash management provider?
Businesses should make sure that the provider has all of the capabilities that the business currently needs or anticipates needing in the near future. They should make sure that the provider’s representatives listen closely and are attentive to the company’s needs as opposed to pushing products for the sake of boosting sales numbers. And they should look for responsive and personalized service. The ability to connect with the provider without going through voicemail hell is a key indicator as to the level of service to expect.
5.) What has NOT changed over the years?
The technology changes constantly but at the end of the day this business is all about people and relationships. You can have all of the best technology and the latest and greatest capabilities but without the right people and laser focus on relationships, it is not possible to prevail in this business. This is as much true now as it was in the 1970s.