In a previous blog on cash management and payment systems in emerging markets, my colleague laid out opportunities and challenges that banks have in these markets. In this blog, I want to focus on how banks are leveraging technology to grow in emerging markets.
Corporate treasurers and banks are ensuring that clients have easy access to all treasury and payments information through a single portal, irrespective of the location, and in a consistent manner. Integration of products and services is becoming a core strategy for most. There is also an increase of non-cash payment transactions with the use of electronic methods such as Automated Clearing House (ACH), Real-Time Gross Settlement (RTGS) and cards. Many of the mechanisms are directly linked to the corporations’ supply chains and procurement functions, requiring a convergence of capabilities that were here to fore accessed by independent administrative functions of the client. Since a demand for a unified view of every transaction is increasing, the need for an automated, end-to-end payment and data set of processes is becoming increasingly critical when this immediate visibility and access to information is required.
The current environment provides opportunities for innovative banks and partners to address the challenges and provide creative solutions. There is a wide range of company treasury structures in emerging markets, varying from simple cash and funding operations for smaller companies and advanced treasury operations for larger corporations, to sophisticated processes and centers. Significant investments in recent years have elevated local banks to competitive service levels for local cash and treasury management products and global MNCs can leverage these capabilities of the local banks. These partnerships are the trend in emerging markets today between strategic treasury and cash management partners.
Global cash management and payment systems continue to evolve in the emerging markets driven by a combination of factors – IT innovation (initiating payments on mobile and tablets), changing customer preferences, and strategic partnerships. I believe that emerging market operating models, relative to the developed markets will continue to drive cash management and payment services through some of the factors mentioned above. We are just at the tip of the iceberg. Don’t you think so?