Latin America: Ramping Up For Real Time

Corporate treasurers in Latin America are under pressure to deliver greater visibility, operational efficiency and high returns—all within a more secure environment. To do so, they need to create ecosystems that facilitate interactions between corporates and their customers and vendors.

“Treasuries are increasingly looking into developing systems equipped for real-time liquidity,” says Mauricio Zuluaga, Latin America product and portfolio head, Liquidity Management Services, Treasury and Trade Solutions, at Citi. “Visibility has evolved to a higher level as treasurers want to see their cash net position on an intraday basis.”

Examples of the broader range of services that treasury expects to receive include integration of e-wallets and seamless payments for domestic, cross-border and foreign exchange transactions, Zuluaga says. Centralizing treasury operations is a challenge due to varying regulatory regimes across the region, cross-border restrictions and industry capacity to transition to open banking.Capabilities that treasuries are keen to have include automated local and cross-border sweeps.

With its enviable footprint in the region, Banco Santander is responding to a growing appetite for short term investment. Santander was one of the first banks to use the new Bloomberg electronic trading platform for money market fund investments in Argentina—to help corporate clients transact more efficiently. Going forward, liquidity management will increasingly focus on innovations that enable treasury to create a standardized, real-time global liquidity network.

At BBVA Mexico, transaction banking is leveraging new technologies. “BBVA in Mexico has been able to create seamless API integration via apps,” says Fernando Díaz Hernando, head of payments and supply chain finance at BBVA Corporate & Investment Banking, “providing an end-to-end solution to insurance, big technology and consumer companies that are looking to maximize instant payments or digitize collection processes.”

To help corporates integrate with its cash management services, BBVA Mexico released an API Channel and API Marketplace, joining a set of functionalities that already include BBVA Payments, SPEI payments, utility payments and account opening. “With this set of APIs, our customers can create sophisticated automated solutions,” says Díaz Hernando. He points to the bank’s solution for Uber: “Its drivers can either open a BBVA account, request payments to Uber or many other useful functionalities directly from Uber’s app for drivers.”

Central banks and clearing houses are encouraging banks to launch other new digital technologies as well, says Gabriel Kirestian, Latin America head of payments and receivables, Treasury and Trade Solutions, at Citi. “A good example is Mexico’s CoDi solution, which enables an instant and cost-effective payment/collection method using QR codes to accelerate cashless transactions and promote inclusion,” he says. “Other countries, such as Argentina and Brazil, are also advancing in this direction.”

Latin American banks are also leveraging artificial intelligence to promote new receivables reconciliation and payment fraud prevention tools, Kirestian says, while new API connectivity alternatives let clients connect directly to banking services in real-time, increasing the ability to anticipate the business’s changing needs.