How APIs can transform corporate treasury

By Emile Hennequin

Corporate treasurers are increasingly focused to improve speed, insights, and efficiency. As such, there is a need to improve operational efficiency in the entire financial value chain. Corporate treasurers may take advantage of the Application Programming Interface (API) technology and its benefits.

The rise of APIs

APIs are everywhere today. They are tools commonly used by Bigtechs, Fintechs, and start-ups. Traditional corporates and banks are also increasingly exploring and using external APIs. For banks in Europe, the legislation of Payment Services Directive 2 (PSD2) has acted as a catalyst to start developing commercial APIs for their clients. Although the number of commercial APIs supported by banks for corporates is still limited, more and more banks enter the arena of delivering APIs.

APIs offer a wide variety of benefits:

• They simplify the processes of exchanging data between computers in a standardized way;
• As such, (real-time) data can be exchanged in a flexible manner, designed ‘on demand’, and tailored to corporate’s needs;
• In addition, an API-‘consumer’ is in full control. The self-service concept allows a corporate to act independently from external vendors, determining its own Graphical User Interface (GUI), reports, and frequency of data feed;
• It is no longer one size fits all, APIs support any time, any place, and any way you want.

“APIs support any time, any place and any way you want…”

APIs in treasury

Corporate treasurers want to pick up on this acceleration. They are looking for techniques and services that facilitate instant insights and actions. Also, they want to automate operational and labor-intensive processes. By doing so, treasurers free up time to move from operational jobs to strategic related tasks. How can a corporate treasury benefit from API technology? The opportunities of APIs are comprehensive. Imagine the possibility to seamlessly receive bank statements 24/7. The same is true for receiving fully automated notifications of events occurring on your business accounts in your systems. Additionally, you can release payments directly from your tool of choice: TMS, CRM, ERP, Power BI, and more. Another benefit of APIs is, that they prove to be of value in machine-to-machine (M2M) processes as they reduce human error while at the same time increasing efficiency.

“Treasurers free up time to move from operational jobs to strategic related tasks….”

ABN AMRO’s APIs

ABN AMRO takes an active role within Open Banking. Open Banking is a financial services term that means banks are moving from closed systems to open platforms, with a key role for APIs: digital portals giving access to a company’s data and services.

By offering API products clients can leverage ABN AMRO’s capabilities to reinvent the customer experience, automate processes, and build a future-proof banking solution. We currently have five valuable Transaction Banking APIs live. We are happy to introduce these APIs, giving a short description and applicable use cases within corporate treasury and beyond.

How to combine APIs

The possibilities to use APIs in treasury are endless. Of course, these APIs can also be combined, lifting automation to a higher level. In the example below, the combined use of the API functionalities is described.

Just imagine a corporate treasurer starting the day with a full overview of the relevant positions in Power BI. During the day, an API call is made every hour to have an updated view of the balances. Meanwhile, in the same flow, the processed transactions are delivered to the A/R department for reconciliation processes. During the day various notifications are received. The first notification, confirming that a position in a foreign currency has reached a certain limit, resulting in an action to convert the FX-position to the base currency. The second notification, stating that a bank account has been overdrawn, followed by an action to initiate a payment to manage the position of the involved bank account to zero. The third one, notifying a high-value payment entering the account, adjusting the cash position while informing the warehouse to release the goods.

Note that all actions described here, can be executed fully automated and seamlessly by using APIs. These are just a few examples that illustrate the new era that has started in corporate treasury.

“It is ABN AMRO’s strategy to play an active role in the adoption of API technology”

What’s next

ABN AMRO is eager to adopt APIs in its cash and treasury management services to corporate clients. We will shortly share more details on our developer portal as well as some API co-creations along with other partner projects. Watch out for two new partner APIs, scheduled to be launched this year.

Curious? Please visit our Developer Portal. Interested? Contact us!