So what are treasury aggregators anyway?
According to Strategic Treasurer, a treasury aggregators provide a single connection point to all of a corporation’s banking connections for both payments and reporting. They’re essentially the single centralized hub that connects an organization to all the disparate dots of its banks and related supply chain participants.
The overall goal of an aggregator is to simplify global connectivity--a welcome function in an age where 83% of all organizations operate in more than 2 countries. Aggregators simplify connectivity in a number of ways, such as by:
- Connecting subsidiaries or regional branches of a company so that payment activity across the entire organization is consolidated through a single stream
- Giving organizations access to their entire bank network through a single portal
- Enabling Management of all connectivity from a single source
When it comes to benefits, treasury aggregators do not disappoint. The value they provide is significant and including increased visibility, enhanced centralization, automation, greater control over payment reporting and cash management processes.
What's driving the need for treasury aggregators-why are they now a "thing"?
There’s no doubt that the intense globalization that’s happening in the payments industry is largely behind the drive to adopt treasury aggregators:
63% or organizations operate in 2-40 countries
9% operate in 41-80 countries
11% in more than 81 countries
Add to this the sheer volume of payments being made and the complexity of an organization's day to day activities is staggering.
Given the unique challenges faced by organizations trying to make tens of thousands (if not millions) of payments to countless numbers of countries, having real-time visibility into cash position is an absolute must if a company expects to operate efficiently and effectively. Payment aggregators provide that insight and then some, lending valuable assistance with other mission-critical issues as well, such as:
The challenges that are confronted when dealing with a global, high volume, and multi-faceted banking landscape can quickly consume all of treasury’s time and obstruct them from focusing on more strategic activities. By enlisting the help of a treasury aggregator to streamline the payments process, treasury can focus on more important strategic issues affecting the organization.
Protecting against fraud
Due to the heightened threat that fraud continues to pose, payment security has rapidly climbed treasury’s priority list to the extent that, in a recent survey by Strategic Treasurer, fraud prevention was listed as a top payment priority for more than two-thirds of treasury and finance teams. By simplifying global payments and providing visibility into the process, a treasury aggregator eliminates many of the points at which fraud can occur.
And what do treasury aggregators have to do with you?
Most organizations struggle with complex payment situations all on their own, which is unfortunate because there’s simply no need. Yes, the payments landscape has gotten exponentially more complicated over time, but solutions like treasury aggregators make the work associated with it simpler and easier. Smart organizations recognize this and are taking steps to adapt their payments technology accordingly.
So would an aggregator help your organization solve the challenges of high payment volume and complex, multi-bank global relationships?
Here’s an easy checklist to help you decide:
- Are you conducting business on a global scale? Today, more than one-third of companies are operating in 20+ countries. This creates complexity in a number of banking and payments-related areas as more banks, accounts, and currencies, and payment types come into play. If you are operating in multiple countries and have yet to implement a sophisticated bank connectivity and payments solution, chances are your currently banking, payments, security and compliance processes need an upgrade.
- Is it difficult to maintain visibility to all your banks and bank accounts? Nearly half of all corporates today are originating payments using six or more banks, and more than half of all companies use more than 100 bank accounts. Managing connectivity to multiple banks can be complicated, especially if many bank portals or spreadsheets are used to view and analyze transaction activity. Companies relying heavily on portals and spreadsheets can improve cash management and consolidate connectivity via a treasury aggregator.
- Does managing payment activity take excessive amounts of time? Half of all companies generate more than 10,000 payments globally every month. Many others generate more than 100,000 or even 1,000,000 payments monthly. Treasury teams that are burdened by the excessive time it takes to track and manage this activity can eliminate inefficiency through use of a treasury aggregator to streamline and centralize their global operations while increasing end-to-end visibility and control.
- Is fraud a top concern? 86% of companies have experienced fraud attempts within the past two years. Because of this, fraud prevention has become a top priority for treasury. For organizations looking to ensure that their payment processes are as secure as possible, partnering with a treasury aggregator allows additional layers of protection for payment files in transit and can provide critical screening and fraud activities before a payment is released for settlement.
- Are compliance expectations proving to be a large burden? Over the past decade or so, the compliance burden placed upon organizations has risen drastically as bodies like OFAC and FinCEN introduce more rigid regulatory requirements. Treasury aggregators provide enhanced sanctions screening and data validation checks on all incoming and outgoing messages.
As your organization grows, the challenges you face will also expand and accelerate. Treasury aggregators are an easy way to simplify the issues that arise as a result of globalization, making it possible for you to spend less time on the technicalities of payments and more time on the strategy of your business.