Why Savvy Treasurers Are Taking an API-First Approach to Cash Management

Written by Joel Salinas
March 31, 2023

In the recent panel, “Navigating the Present and Future of Treasury – Insights from Corporate Treasurers,” Bruce Edlund, Group Director and Assistant Treasurer at Cloud Software Group, made a closing comment that his company will re-evaluate relationships with banks that do not offer APIs. Many treasurers who are looking for ways to be proactive and mitigate risk agreed with that sentiment. 

But, why?

Bank APIs are a way to consolidate and normalize balance and transaction data into a multi-bank data lake, empowering finance teams with a single source of truth for bank and cash data. 

Whether you bank with a giant or regional bank, through an automated cash management platform, APIs connect directly to your company’s key accounts for greater control and visibility into your cash. Exciting, right? 

In this article, we’ll explore how to take ownership of your bank and financial data using an API-first approach.

Why Are Corporate Treasurers Switching to API Cash Management?

Before we dive into the benefits of an API-first approach, first let’s review how teams typically handle their data via the more traditional route, ala spreadsheets.

The OLD Treasury Workflow

old treasury workflow with spreadsheets

Typically, aggregating bank data in spreadsheets involves logging into multiple bank portals, normalizing all that balance and transaction data into one standard format, and then performing custom modeling and formatting to craft the most basic reports. 

As your treasury scales, transaction volume exponentially increases. Manually managing bank data in spreadsheets becomes a dreadful exercise.

This is why treasurers are adopting a new treasury workflow that leverages banking APIs to automate data management.

The NEW Treasury Workflow

new api cash management approach to treasury workflow

Open banking APIs take the manual element out of data aggregation and consolidation, which means less busy work for your treasury. APIs enable banks to frequently transfer data to clients directly and securely. 

So instead of normalizing bank data manually, your organization gains near real-time cash balance, transactions, and payment tracking in one platform. 

Using one secure platform not only improves security and performance, but it also unlocks automation opportunities and an entirely new intuitive, digital experience for users and developers.

In fact, Trovata utilizes a proprietary parsing and normalization engine that takes all of the various bank formats. 

Whether it is coming from BAI2, CAMT, JSON APIs, event-based APIs, or even proprietary CSV formats, Trovata’s open banking APIs consolidate your bank data into a common standard. 

You can then use this data to seed data lakes and create output to ERP systems and other finance applications that depend on bank feeds.

In summary, the potential for APIs to automate treasury tasks is substantial and on the rise.

According to Mario Benedict, Head of APIs and Digital Product Solutions for EMEA, J.P. Morgan Wholesale Payments,

“Treasurers are using APIs to move from traditional manual processes to the treasury of tomorrow. And in the current environment, automation and digital transformation are more necessary than ever as corporates strive for real-time monitoring of cash flows, optimization of working capital and the flexibility to respond to rapid changes in the macro landscape.”

treasury api cash management
Image via JP Morgan

Benefits of APIs for Corporate Cash Management 

When you switch to an API-first approach to cash management, you gain command and confidence over your cash flow by achieving 100% visibility of cash daily across all your banks and accounts. In doing so, you can: 

  • Eliminate manual data management
  • Establish a single source of truth
  • Empower rich, in-depth analysis
  • Take advantage of new real-time payments rails

3 Ways You Can Use APIs for Richer Cash Flow Insights

There are three significant areas where Trovata, in particular, utilizes open banking APIs for its machine learning algorithms and artificial intelligence to analyze data and provide richer insights:

Data Aggregation

Each financial institution your organization uses has a different method for connecting and retrieving transaction and balance activity, but Trovata aggregates this data into one unified format. 

Trovata does this by:

  1. Working with each of your financial institutions to determine the appropriate data, format, and delivery
  2. Storing all data retrieved into a Multi-Bank Data Lake™, enabling further historical analysis
  3. Continuing to work with each institution to improve setup, aggregation, and analysis

Data Normalization & Storage

Each financial institution provides data attributes and fields for transaction and balance activity with its unique methodology. Trovata takes these methodologies into account to normalize the data automatically. 

Trovata does this by:

  1. Reviewing each institution’s data set and mapping them to the appropriate data attribute to create a unified format
  2. Storing normalized data in a secure database to enable further customization via the API developer portal

Pushing Data Downstream

Each ERP and B.I. tool has its method of accepting data from an external third-party based on the capabilities of the tools. Trovata has integrations to some of the most popular ERPs, such as Sage and Oracle Netsuite, so that you can establish a single source of truth for all financial data across your systems. 

Level-Up With Bulk API Payment Processing

Another important aspect of managing cash is how your company handles its outflows—payments. The beauty of API payment processing is that you can now make payments through the bank’s own payment rails and take advantage of real-time payments. 

When you use APIs to process payments, you no longer have to use batch file processing (SFTP-H2H). You can send payments in bulk, without incurring any third-party processing fees. On top of that, reconciliation is made simple because each payment within the bulk is still submitted individually to the bank. 

Trovata Founder and CEO, Brett Turner, shares why API payment processing is a much-needed upgrade: 

How Krispy Kreme Leveraged Bank APIs to Manage $2 Billion in Cash 

Okay, you don’t have to take my word for it that APIs are the way of the future for your treasury! Here’s why Krispy Kreme, the world’s most beloved doughnut brand, got on board.

In the past five years, Krispy Kreme experienced phenomenal growth. So much so, that it needed an upgrade from managing cash within corporate banking portals to finding a modern solution that could scale with it. 

Their treasurer sought a robust solution that could work well with its banking partners like Wells Fargo to automatically aggregate, consolidate, and analyze multi-bank data across multiple currencies. 

Since we started using Trovata, our treasury technology capabilities have completely transformed for the better. We have more time to focus on driving strategy and unlocking growth opportunities.”

– James Krikorian, VP & Treasurer at Krispy Kreme

After being recommended Trovata by one of its banking partners, in mere weeks, Krispy Kreme was able to leverage our APIs to create a financial data lake, enabling its treasury to:

  • Manage increased treasury management complexity, driving timely and actionable cash insights without the need to hire more staff
  • Stop logging into its corporate banking portals and use a cash management platform instead for a fraction of what it would cost and the time it would take to implement a TMS
  • Obtain 100% visibility into its multi-bank data in one place

Use Bank APIs to Manage Cash Like A Pro

Whether you’re a Krispy Kreme or a seed stage startup, Trovata can assist you in tapping into banking APIs and help you reap the immense value from them. Trovata empowers everyone to analyze, report, forecast, move – manage cash like a pro – no matter who your business banks with.

Connect your first bank with a free Trovata account to explore your cash flow with access to:

  • Balances
  • Transactions
  • Transactions Tagging
  • Analysis
  • Payments
  • Online Documentation and Videos

Want to see it in action? Schedule a demo today!

bottom cta manage cash like a pro book demo min

Subscribe to Newsletter