Payments are an ongoing concern for senior treasury and finance leaders because inefficient payment processes can inhibit supply chains, cash flow, and profitability. The need for working capital and cash optimisation, in combination with the increasing threat of cybercrime and payments fraud, amplifies the necessity of centralising and standardising corporate payments. As such, CFOs are seeking improved payment solutions from their treasury teams.
The solution lies in payment hubs, which ensure payment workflows comply with the organisation’s payment policy. A payment hub consolidates payments streams from ERPs and decentralised teams to transform disaggregated processes into a single source of record for all outgoing payments. They offer global visibility and standardised controls that are vital in making certain that every payment is managed in a uniform manner regardless of geography, payment type and who requested it.
Payment hub brings five core benefits
Implementing a payment hub provides several values for the treasury and finance leaders.
- Cost savings. Each system that connects to a bank incurs additional costs and fees and, in the case of on-premise solutions, significant IT resources. Organisations even handle duplicate payment channels, such as multiple Swift channels. With a payment hub, the number of systems that must connect to a bank is reduced, resulting in significant cost savings.
- Central responsibility. When payment workflows are managed using multiple systems, the risk of mistakes and unauthorised payments increases. As a payment hub centralises payments prior to final transmission to the bank, the CFO can guarantee that all payments are the responsibility of a single team – regardless of the type of payment and where it is coming from.
- Fraud detection. Many organisations require payments to be screened against external sanctioned lists, in addition to a digitised payment policy to ensure that only authorised payments be approved and released to the bank. More sophisticated solutions available within payment hubs should be leveraged to provide the best possible protection from suspicious payments.
- Global visibility. Centralising all payments via a payment hub delivers complete visibility of all outgoing cash flows in order for treasury to optimise balances and make effective strategic decisions. It enables the organisation to operate more effectively, minimising excess balances so that cash can be more efficiently deployed where it is needed most.
- Eliminated need for IT. Payment hubs are hosted in the cloud and feature bank format generation and integrated bank connectivity – therefore internal IT resources are no longer necessary to build and maintain bank connections. This offers finance teams the ability to change existing bank relationships, scalability to add new banks and flexibility to update bank formats.
To learn more about how to integrate a payment hub into your financial system’s ecosystem, download Kyriba’s Guide to Payment Hubs eBook here.
Delegates at the Treasury 360 Oslo conference, on Wednesday 3 April, are welcomed to visit Kyriba’s stand in the exhibition area.