With creative deployment of technology, banks are competing with tech firms while helping corporate and retail clients manage their cash.

Author: Graham Buck

Proving that innovation in cash management is thriving around the world, this year’s winners are drawn from a range of regions. The 2019 innovations also underscore that banks have accepted the encroachment of the big technology companies and are increasingly ready to collaborate with them, as well as compete against them.

In the Middle East, Ahli United Bank (AUB) has won Global Finance’s award for Best Bank in Bahrain several years in succession. It prides itself on differentiating its products and services through value-added services, including Islamic banking. The bank’s B2B digital solution for online cash management is a continually evolving innovation. The development of its platform dates back to 2011, and the solution was launched the following year. Since then, the platform has been steadily enhanced, growing from a simple payments-processing engine to a one-stop shop with an impressive scale and range of features to meet the expanding needs of corporate clients. Formed by the 2000 merger between the United Bank of Kuwait and Al-Ahli Commercial Bank, AUB states that it is continually evaluating ways to expand in the Gulf Cooperation Council (GCC) region and acquire banking platforms that complement its own in specific secondary markets across the Middle East and North Africa.

BBVA Compass, a US subsidiary of the Spanish multinational Banco Bilbao Vizcaya Argentaria (BBVA) since 2007, states that “our business relies on technology as a key sustainable competitive advantage.” BBVA’s RealTime ARP (account reconciliation program) is one of a series of cash-management functions the bank developed in North America to fully use new technologies. Launched last July, the service makes BBVA Compass the first US bank to offer true real-time digital reconciliation that streamlines back-office operations for commercial clients. ARP services automate the check-reconciliation process and provide reporting capability for processing account data. Alongside the launch, the bank also introduced BBVA Compass RealTime Positive Pay, a proactive fraud-prevention product that promptly alerts businesses if a potentially fraudulent transaction is identified in their check or electronic payments.

Bank of the Philippine Islands, whose origins date to 1851, is among the largest in the Philippines and has branches in Hong Kong and Europe. BPI’s Corporate Cash Deposit Machine demonstrates how the bank is responding to its clients’ evolving needs. The machines are available at more than 600 BPI branches. Deposits are credited in real time and, in addition to basic services such as balance inquiries and funds transfer, the machines can offer express cash and prepaid reloading for cellphones and prepaid cards.

While there are no standard definitions differentiating a fintech “lab” from an “incubator,” from an “accelerator,” in general: An innovation lab is a co-working space that typically offers startups mentoring, education and support from corporate partners. The lab may focus on one area of innovation or have different programs in several areas of concentration. These programs seek to help participants develop breakthrough solutions for entrenched problems. A startup accelerator operates much like an innovation lab, but it also seeks to speed the time to market for a product or service. It typically provides seed money to the startup in exchange for a stake in the company. These funds may be invested directly by the accelerator or by companies in the accelerator’s network.

CaixaBank’s Smart Money, promoted as “your new investment digital adviser,” is the Spanish bank’s venture into robo-advisory services. CaixaBank has recognized the expansion in recent years of digital consulting services that offer the automatic creation of investment portfolios, based on a client’s data portfolio, financial objectives and appetite for risk. Customer feedback prompted the bank to offer a similar service: Smart Money. The service launched with a minimum investment of €1,000 ($1,120) and an annual service fee of €6. It uses the latest technology to let clients access financial advisory and personal investment solutions in a 100% digital environment. New customers are asked a few simple questions to quickly assess their personal circumstances.

Doha Bank, one of Qatar’s largest commercial banks, has steadily expanded since its creation 40 years ago. It now has six overseas offices in Kuwait, the United Arab Emirates (UAE) and India, as well as a network of representative offices around the world. Its most recent innovation was setting up Qatar’s first exchange traded fund (ETF), Qatar Exchange Index ETF (QETF). The fund, a vehicle for investors seeking portfolio diversification, achieved an impressive total return of 20% in 2018. The QETF, which aims to generate returns through capital appreciation and dividend distribution, has around $100 million in assets under management and focuses on listed Qatari equities. It has one of the lowest total expense ratios among emerging market ETFs.

Founded in the mid-1980s, Ecobank—whose official name is Ecobank Transnational—has banking operations across 36 African countries. It has established itself as the largest bank throughout West and Central Africa, where corporate finance and cash-management needs are steadily becoming more demanding and diverse as international agencies, including the United Nations, seek swift and efficient means to send funds to the region. At the same time, corporate and agency treasurers need to maintain central oversight of their operations. Ecobank says it is responding to the steady increase in cross-border payments across Africa. The bank’s initiatives include Ecobank Omni, an integrated electronic platform that offers corporate clients full transparency and control over their cash-management activities. It also includes a suite of flexible online solutions for managing cash effectively.

First Abu Dhabi Bank (FAB) is the fastest-growing merchant services provider in the UAE and has developed an international network that spans five continents. The bank’s pledge is to continually invest in both people and technology to create the most customer-friendly banking experience possible. FAB’s investment in technology has most recently been demonstrated in its 3-in-1 kiosk electronic payment machine (EPM), now being rolled out across the region. The EPMs offer high-tech features such as check scanning and image capturing.

Standard Bank is a major presence in Africa and operates in 20 countries across the continent. It is a leading provider of commodity-related financial services in Ghana, the continent’s second-biggest gold producer after South Africa, and the world’s second-largest producer of cocoa. Standard’s MobyCash Ghana adds to the increasingly sophisticated products Standard Bank is developing for corporates in Ghana. It provides them with real-time value for on-site cash collections via a tablet-based app. The product also helps smaller businesses in specific market locations via a mobile point-of-sale application. MobyCash Ghana “supports the bank’s digitization agenda to ensure market leadership in offering universal financial solutions to customers,” according to a bank statement. 

Taishin International Bank is less than 30 years old, yet has expanded beyond Taiwan, with 105 branches across Asia-Pacific and in Australia. Taishin Omni-Payment Platform (TOPP) is another established local service, started in 2015, that regularly adds new features for Taiwan’s local merchants and is increasingly ambitious in scale. It is part of the bank’s omnichannel platform, an application programming interface  portal that offers an integrated platform for e-commerce transactions between merchants and digital-wallet vendors. Vendors can build credit card-on-file services and token services into their apps.

Wells Fargo’s Greenhouse stand-alone mobile banking app is promoted by the bank under the slogan, “Your bank, in the palm of your hand,” claiming to “help you understand your money in, money out and what’s left over for spending.” As the San Francisco Business Times noted at the time of launch, “Wells Fargo has created a banking app designed for the income volatility that comes with driving for Uber, delivering for Postmates or working other gig-economy jobs.” Yet Greenhouse also offers two main features that are highly valued by corporate treasury departments: money-management tools and low fees.


Cash Management Innovators 2019

Company
Innovation
Ahli United B2B digital solution for online cash management
Bank of the Philippine Islands Corporate Cash Deposit Machine
BBVA Compass BBVA Compass RealTime ARP
CaixaBank Smart Money
Doha Bank Qatar Exchange Index ETF
Ecobank Ecobank Omni
First Abu Dhabi Bank (FAB) 3-in-1 kiosk electronic payment machine
Standard Bank MobyCash Ghana
Taishin International Bank Taishin Omni-Payment Platform
Wells Fargo Greenhouse