The growing demand for corporate value-added services, rising customer expectations, and a dynamic global regulatory landscape coupled with structural changes in the financial industry and the increase of multiple payments-enabling technologies are contributing to the demand for the emergence of a new payment universe. To master the growing complexity of an ever-greater diversity of methods, instruments, and players in different markets, organizations need to effectively synchronize, centralize and automate incoming and outgoing payments to achieve complete clarity of their cash. In this whitepaper we discuss what it takes to achieve the efficiency, transparency, compliance and fraud prevention needed for companies to succeed and gain an edge.
Drivers of change: customers, technologies, and regulation
It can be expected that technological innovations such as the Internet of Things (IoT) and blockchain, open APIs as well as cloud services will further transform the payments landscape as data becomes more crucial than ever. This will lead to the proliferation and adoption of alternative payment channels via multiple devices (such as instant, mobile and in-app payments or IoT-enabled payments), satisfying customer expectations for high-level user experience and agile payment solutions. In addition, the regulatory landscape is growing on a global scale, aiming at achieving risk reduction, standardization, innovation, competition, and transparency. This levels the playing field for organizations and delivers security and legal certainty but it also requires companies to make their payments-related engagements compliant with the ever-increasing volume of key regulatory and industry initiatives (KRII).
It needs to be kept in mind that an open collaborative environment with many different players, as we currently see emerging, introduces technical hurdles and challenges regarding process efficiency and data privacy, cybersecurity, vulnerability to fraud and exposure to compliance risks. So, while the actors and instruments on the payments landscape are becoming more diverse, revolutionizing the market and facilitating ever new possibilities for collaboration and profit, organizations are facing major challenges, inhibiting them from fully exploiting the opportunities at hand, such as:
- Lack of standardization for messaging and data capture
- Problems in supply chain finance activities e.g. liquidity and vendor payments
- Relying on manual processes and low level of automation
- Lack of transparency, especially in international payments
- No straight-through-processing and integration of solutions, channels and ERP system as well as a costly infrastructure
- Lack of cybersecurity and vulnerability to fraud attempts
One of the greatest problems that remain is the lack of real-time synchronization between accounts receivable and accounts payable resulting in inconsistent and inefficient corporate payments and compromised cash visibility. Leveraging new technologies and harnessing centralized payment solutions, that masters cash-in and cash-out processing in one unified approach, enable corporations to address the existing inefficiencies while ensuring standardization and compliance. Additionally, value-added services such as customer and supplier analytics, fraud management, and compliance tracking need to supplement the payment solutions. Global companies depend on centralized transaction processes to improve transparency across cash positions to optimize group cash flows and funding at the lowest cost and risk. A centralized inbound/outbound payment approach significantly improves the predictability of the corporate cash flow by combining imported bank balances, real-time data from various enterprise systems and multiple bank accounts as well as recurring cash flows.
So, the key areas that can make or break an organization’s universe of payments include the following:
- Accelerating inbound payments with a strong order-to-cash process
- Controlling outbound payments with a secure procure-to-pay process
- Achieving holistic cash visibility with frictionless and synchronized processes
- Secure and compliant data and document management
The transformation of payments: anticipation instead of fear
Payments are at the focus of organizations worldwide. This concerns inbound as well as outbound payments and the visibility of the related cash flows. The increasing diversity of players, instruments, and technologies require companies to find ways to comprehensively manage processes, data, and business partners. The best way to master the complexity while reaping the benefits and opportunities the innovation of payments offers is to centralize procedures and information into one automated approach, thereby achieving visibility over your entire cash ecosystem. This can only be achieved by world-class solutions that combine strong security with outstanding customer experience, and the ability to scale and feasibly boost performance. With the right partners by their side and technologies at their disposal organizations will profit and be successful in the new universe of payments.
This is an excerpt of a recent thought leadership paper. The complete text can be downloaded here.
Sven Lindemann is responsible for the strategic direction of Hanse Orga Group and is the CEO of the company that today spans across Europe, North America and Asia. With more than 20 years of experience in the finance technology sector and deep software knowledge, Sven has spearheaded the growth of the financial solution portfolio and the greater international footprint of the company. He joined the executive board of Serrala (formerly Hanse Orga Group) in 1995 and took over the chairmanship in 2012 from his father and founder of the company, Hans Herbert Lindemann.