Next generation cross-border cash management

Despite rapid digital advances in cash management, many treasurers still struggle to achieve full cross-border cash visibility. But all that is about to change, says Dick Oskam, ING.

Over the years, treasurers have tried more or less every trick in the book to help them achieve cash visibility. But as business operations have become increasingly global, treasurers are facing ever greater hurdles around cash visibility as they struggle to join the dots between far flung geographies and technologies.

Dick Oskam portrait

For many, centralisation simply isn’t an option to help tackle this, given the structure of the existing business. Besides, centralising cash management isn’t without its pitfalls. Even in a highly centralised treasury environment, complex account structures and inflexible reporting processes may still exist. As a real-time cross-border visibility can also be hard to gain, even though processes are centralised.

And despite the promise of new digital solutions, technology has – until now – not been quite the visibility enabler that corporates had hoped for. While treasury management systems (TMSs) have become more affordable thanks to cloud-based delivery models, many smaller companies are still reliant on spreadsheets to complete manual forecasts and reporting, which are extremely inefficient, especially in a cross-border environment.

Meanwhile, larger corporates that have sophisticated treasury technology still face visibility challenges. Trying to achieve cross-border cash visibility with multiple TMS and enterprise resource planning (ERP) systems that are not harmonised can be a real struggle.

Although treasury technology vendors and organisations like SWIFT are updating their offerings to make cross-border cash visibility a more accessible goal for mid-sized and large corporates, rather than something just for the elite, the resource requirement behind these solutions – whether it be time, money, or knowledge – still tends to be rather high.

At ING, we believe a different approach is required, which is why we’re introducing our Virtual Cash Management solution. By combining Virtual Bank Accounts with administrative sub-accounts called Virtual Ledger Accounts, Virtual Cash Management creates an easy-to-implement digital ‘layer’ that enables central visibility and availability of cash, while respecting the underlying treasury structure.

It allows every company to see their group-wide cash positions from anywhere in the world, in near real-time. All this in a single, flexible, multi-bank, self-service portal that works regardless of a company’s existing IT infrastructure.

Facilitating the set-up of in-house bank and ‘on-behalf-of’ structures for payments and collections, Virtual Cash Management also enables treasury to reach a greater level of cash centralisation, in line with the organisation’s own timescale and strategy. 

So, where treasurers have previously struggled to combine all the elements required for achieving full cross-border cash visibility, we believe that next generation digital solutions such as Virtual Cash Management can deliver the whole package.