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Corporate Payments &E-commerce An Overview
National Institute Of BankManagement
Sanjay Joglekar November 7, 2006
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@Sanjay Joglekar
Agenda Corporate Payments Landscape
Banks & Corporate Payments
Technology & Corporate Payments
Emerging Trends
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Changing role of Corporate Treasurer
/ CFO Evolved from tracking cash balances
and managing receivables/payments
Todays corporations require Treasurersto
manage short term liquidity and risk
Operational cash mangement
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Key Elements For Todays CFO Transaction Management
Managing disbursements and collections
Information ManagementAccount balances from banks
Preventing fraudAutomating transaction posting to ERPs
Reconciling all payment activities
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Corporate Payments Landscape Demand side Dealers; Retail
customersAutomobile co. having dealers
Mobile company having individual users
Demand side generates receivables
Receivable management is key to cashflow
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Corporate Payments Landscape..2 Improving collections
Integration of ERP & A/R systems
Automated escalations of aging
Dispute resolution tools
Integration with accounting, shipping etc.
Ability to track promises to pay
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Corporate Payments Landscape..3 Supply Side spares suppliers; service
providersAuto ancillary multilple tiers
Housekeeping; Infrastructure providers
Timely disbursements result in
Efficient supply chain Contented internal customers
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Banks & Corporate Payments Banks defined themselves as providers of
financial needs of corporates /institutions
Products & Services offered by banks Cash management
Collection products
Outstation cheque collections
Direct debits
Disbursement products Salary credits
Paper payments
ACH/ECS/RTGS
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Banks & Corporate Payments..2 But ended up creating silos for corporate
payment requirements
Salary disbursements Trade Finance
Cash management
Silos also resulted in technology silos
giving rise to integration challengesAny new product offering today becomes a
challenge for operations
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Banks & Corporate Payments..3 Today banks view corporate payments as
main revenue earner
Greater dependence on fee based income thaninterest based income
Key challenges to overcome are
Decline in trade finance requirements
Bigger corporates are not revenue contributors Narrow window for first mover than ever before
Service differentiation becoming difficult
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Technology & Corporate Payments Major technology adoption at corporate end
ERP (covers all aspects of corporate)
Supply chain integration
Banks also automating almost all their functions Core banking
Lending
Trade finance
Forex External payment networks
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Technology & Corporate Payments..2 Technology has become pervasive
Transaction Management File exchanges from ERPs to banking systems
Payment initiation from net banking
Account to account transfers
Direct links to payment gateways ECS; RTGS;
Information Management Collection reporting
Positive pay
Disbursements summary
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Core functionality of Electronic Invoicing &Payment
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Emerging Trends Need for convergence
Moving from product orientation to customizedsolutions
What it takes Overcoming banking products silos
Integrating business & IT strategy
Deeper than providing single point access to allbanking products
Deeper than combining multiple business unitsinto single business unit
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Courtesy -
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Courtesy -
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Some thoughts Why arent banks changing the model
Strategy requires careful planning and could
have huge downsides Rewards are great revenues beyond
transaction processing by providing forecasting,managing risk and strategy cosulting formaximizing revenues
BPO for corporates ?
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Any questions, comments and
observations are welcome