Digitization and automation are paving the way for post-pandemic profitability.
In 2021, BBVA, our pick as the best bank for cash management in 2022, streamlined cash management for multinationals with its BBVA Pivot: an ecosystem of channels and a global offering of cash management services to meet the transactional needs of companies operating across borders.
Banks have invested in the digitalization of their services and cash channels to transform their transactional offers; but the pandemic has been an important catalyst for further digitization, according to José Manuel Naz, head of cash management sales for Latin America at BBVA Corporate and Investment Banking.
“For example, the ability to adopt digital signatures in contracts in most Latin American countries has been transformative in simplifying the formalization of bank-corporate relationships,” he says. “Furthermore, the development and adoption of APIs [application programming interfaces] for creating ecosystems where companies can digitize their business processes and integrate them seamlessly with their customers has been a game-changer for early adopters of this technology.
Additionally, by extending e-commerce services to merchant customers, companies have increased their sales through their digital channels.
“This wave of transformation has extended beyond banks, as initiatives promoted by local governments for the digitization of payment systems are at the forefront of strategy,” says Naz. “Market adoption of QR codes in Colombia, Mexico and Peru; or the digitization of checks, as in Argentina, are examples of the important role that central banks, clearing systems and the government can play in this digital transformation. All of the new digital offers, combined with new value-added services, will enable companies to more easily reconcile and improve the management and traceability of cash.
Santander, which won the Best Bank for Payments and Collections award, has introduced several innovative payment solutions for customers and non-customers, such as its partner PagoNxt’s open Getnet platform for collections and services. . Other innovations include collections with Echeq and virtual wallets for business-to-consumer transactions. In parallel, its QR Pix enrichment of the instant payment method generates QR codes for real-time online reconciliation.
In July 2021, Citi, winner of the Best Bank for Cash Management award, launched its Citi Digital Account in Latin America. This allows customers to completely digitize their banking experience and eliminates the need for wet-signed signature cards, checkbooks or manual transactions.
Using Citi’s Global Concentration Engine, clients can mobilize and pool liquidity domestically and cross-border. Following the platform’s integration with Citi’s foreign exchange (FX) payments platform in Mexico, clients have been able to reduce their liquidity and currency risk regionally and globally. Citi also launched Multi-Bank Target Balancing in Brazil to provide customers with real-time access to their balances held at third-party banks. The service, available in 11 regional countries, automatically scans a Citi account throughout the day, further helping to mobilize liquidity and manage risk.
For companies requiring immediate liquidity, Fondos Fima, winner of this year’s award for best provider of short-term investments/money market funds, offers the Fima Premium fund, which provides immediate online liquidity with a return close to a term. The fund mainly invests in interest-bearing current accounts and fixed-term certificates.
Covid-19 continues to hamper Latin American economies; and the upcoming elections in Brazil and Colombia, as well as the second round of elections in Costa Rica, likely next month, raise the specter of political uncertainty and social disruption that so often impede regional growth. However, greater standardization in the region and growing adoption of offshoring are creating opportunities, especially for companies using smarter treasury solutions to manage their cash in times of stability and upheaval.