LISTEN: liquidity in an RTP world

The increasing ubiquity of real-time payment systems mean corporate treasurers must lean into a world of real-time liquidity management, according to Anuj Mehra, Director of Strategic Sales & Platforms at ANZ.

Speaking on an ANZ Institutional On Air podcast, Mehra said the way liquidity management was evolving in some ways mirrored the way news consumption changed amid the emergence of digital media.

“Newspapers still get printed every day,” Mehra said. “But you and I consume our news on demand as well. And I think that parallel is for liquidity as well.”

In this real-time world, businesses will still need large payments “anchored on a date,” he said, and banks like ANZ would “make sure that the batch processing that our customers have will continue”.

“But increasingly, because of the power of the technology and what you're able to do, and what the customer demand looks like…we will see increasingly real-time, without cut off, management of liquidity come to the fore,” Mehra said.

Mehra spoke on podcast with Lisa Vasic, ANZ’s Managing Director of Transaction Banking, and Jenny Hutchings, ANZ’s Head of Banks & Diversified Financials. You can listen to an edited version of the conversation – part two of two parts – below.

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Demand

Vasic said increased adoption of real-time technologies, particularly in the business-to-business space, would force a broader change in approach to treasury in the coming years.

“We're going to have to see a lot of change in treasury practices and protocols,” she said.

Mehra said treasurers would need to adjust to growing demands from consumers around real-time services, meaning many organisations could begin managing liquidity almost “like a bank”.

This would apply to businesses attempting to do “pay outs, refunds, claims or whatever the customer journey is,” he said, on a “real-time, 24/7, on-demand basis”.

Hutchings said these changes would inevitably begin to impact the structure and location of some organisations, as businesses moved to make sure they had “the right people in the right time zones”.

“You can no longer hide behind manual processes,” she said. “The banks can't. Consumers can't. Businesses can't as well. And I think this is going to be that next evolution of change.”

Reassess

As well as business structure, Mehra said there was an opportunity for treasurers to reassess the way they go about their work.

“There is an equal opportunity to automate some of those processes, so you don't necessarily need to have people [to] keep running… seven day a week, essentially, without bank holidays or cut offs,” he said.

Today, conversations between ANZ and its customers regularly include encouragement around the use of real-time payments, Mehra told the podcast.

But the market is not too far away from reaching a point where participants will be asking each other “why don't you use real time payments?”, he said.

“That’s the sort of shift in the discussion [that] is very much in the near term, in my mind at least.”

Listen to the podcast to find out more.

This article reflects the edited version of the conversation as it appears on the podcast.

This is part two of a two-part podcast. You can find part one HERE.