Real-Time Treasury & AI: Cash Management Shift in 2025

Key drivers impacting Cash Management strategies

Key drivers include cultural shifts towards real-time responses, geopolitical uncertainties, and technological advancements like improved application programming interfaces (APIs) and artificial intelligence (AI). 

While technological advancements and business models are constantly changing, the challenges to these shifts remain. Those include integrating legacy systems, ensuring compliance, and managing security risks. Virtual accounts are gaining popularity for their efficiency in treasury management and digital wallet solutions. AI is also being leveraged for forecasting, fraud detection, and “what-if” scenarios. Top priorities for corporates include real-time cash visibility, liquidity management, and multi-currency treasury management amidst geopolitical volatility.

The panel included:

• Dac Nguyen, Head of Commercialisation, Cash Management & Payment Solutions, Lloyds Banking Group
• Nitesh Kumar Bhansali, Director, Liquidity Product Management, HSBC Innovation Banking
• Maria Adele Di Comite, Research Director, Financial Insights, IDC
• Sathish Padmanathan, Head of payments & cash management, Tietoevry

Challenges in adapting to technological shifts

Di Comite began by commenting that the expectation is that interactions and responses, in both our personal and professional lives, are expected to be in real-time. However, she warns that while digital transformation and a shift towards “instant culture” were accelerated during the recent Covid pandemic, that era also highlighted several challenges. Those include managing the complexities of multiple payment rails and interdependent supply chains that impact global cash flows.

 
Nguyen agrees with Di Comite that the global economy is increasingly unpredictable. This can significantly affect economic drivers like currency and foreign exchange rates, interest rates, and threats to global supply chains caused by different disruptions. Hence, the driving force towards real-time and the desire to get visibility quickly across global, multinational organisations. However, he sees technological advancements as the key enabler allowing the shift to real-time.

The role of virtual accounts in treasury management

As much as we want [real-time], if we don't have the technologies behind it to drive it, then we're stuck.

He points to a greater prevalence and adoption of APIs, which enable better interconnectivity around financial systems and allow for the transfer of data.

 
All of that unlocks that ability to pivot towards real-time into things like the increase in adoption of an application of AI.

 

Bhansali says: 

HSBC Innovation’s client base resides entirely in what is known as the “innovation economy,” where businesses run 24 hours a day, seven days a week, and are primed to scale globally “very very quickly”. 

From an operational resilience perspective, we cannot underestimate how important it is for things to work the first time, every time for a Series A, B, C, or D company.

Bhansali points out that while interacting with shareholders is typical for an established corporate, for startups that relationship is with their investors, who need to have a clear view of the company's cash burn.

 
It's just not the transaction, but also the information, which has to be real-time. Do we need to do another funding round, or do we need to change anything from the current environment?

Leveraging AI for enhanced financial operations

However, the industry as a whole is still examining strategies to ease challenges and meet these real-time expectations, says Di Comite. Issues around “multi-layer” integration and interacting with aging legacy systems are prevalent in many organisations, she adds.

 
AI and automation can help.

says Di Comite. But the move towards real-time cash management needs to be balanced against maintaining clear data, accurate reconciliation, compliance checks, fraud prevention and cyber security. Padmanathan agrees that legacy systems and aging structures pose significant challenges to real-time cash visibility.

 
I think the real-time adaptation has not been very easy for most of the banks, because if you’ve seen how banking has evolved over the years, the IP applications in the banks were not really designed for the real-time cost.

He says that 50 percent of banks run on older mainframe-based systems, and even if they are in the middle of a core banking modernisation, that process usually takes “multiple years.” 

The Importance of Real-Time Cash Visibility

Technology also offers many new opportunities. Bhansali says computing power has increased substantially, especially in financial services. Many of HSBC Innovation’s clients are improving their use of forecasting, analysis, and ‘What-if’ scenarios aided by AI and generative AI, he adds.

 
AI is going to improve treasuries, and with the increase in computing power and the increase in data lakes available with financial services companies, there is a significant opportunity to improve risk management and also increase returns

says Bhansali. 

Future trends in Corporate Banking and Cash Management

Meanwhile, virtual accounts are an ongoing and growing trend in corporate banking offerings. According to Padmanathan, virtual accounts have experienced a “significant " amount of change in the past year. They have evolved from initially rationalising real accounts to on-demand virtual accounts set up for a “specific purpose” and used only once.

 
He adds that banks are also using them to offer banking as a service offerings to payment services providers and fintech clients. This can include a customer wallet with full transaction ability, such as linking up a debit card to issue a check, he says.

Nguyen also sees significant change in the use and functionality of virtual accounts and how they can evolve beyond corporate treasury to offer digital wallet solutions, early salary drawdown, and savings and wealth management.

Virtual accounts now can carry their own virtual iPads, can carry their own account numbers.They can look and feel and operate exactly like a bank account, but have the benefit of folding into a single, real, physical account with a ledger segregation the balances.

He says that around 25 percent of Lloyd Banking clients use virtual accounts. Of that group, some use it to support digital wallet solutions or their own internal client propositions, he adds.

There's early salary drawdown use cases, savings and wealth management, the application are practically endless, and that's again underpinned by the flexibility of being able to open and close accounts quickly, easily, using APIs, having the direct connectivity into the banking scheme.

These on-demand accounts can be set up using APIs and then used to trigger a business process, make the settlement, “and then close that account again just as quickly”.

All on the panel agreed that corporates will use automation, AI, and machine learning to better manage and deliver their needs for real-time liquidity management, payments, and multi-currency treasury management.

Learn more:

Tietoevry was named a Leader in the IDC MarketScape: Worldwide Cash Management System 2024 Vendor Assessment