Open Banking for Finance Teams: 4 Steps to Take Advantage of It Today

Written by Trovata Team
May 5, 2021

Open banking is quickly becoming an industry-wide phenomenon, changing the face of finance as we know it, thanks to APIs. API technology is essentially pre-packaged programming that businesses can use to create data bridges between applications. These new API-driven apps are changing the face of finance, pushing transparency and efficient cash management to new heights.

Transparency and efficiency are not just about improving cash forecasting and visibility, automating more processes, and making better risk management decisions. It’s also leading the way to a more inclusive and democratized approach to cash management. With real-time access to cash data, the entire finance department benefits from greater insight and control over their cash flow and transactional data.

This blog lists 4 key steps that CFOs, Treasurers, and other Financial Professionals can take to adopt and leverage open banking APIs. Let’s dive in.

Step 1: Automate (Almost) Everything

The first step is taking a look at the processes you can automate. For finance professionals, such digitization has been slower to arrive in the business world. Legacy technology is still widely used, and basic spreadsheets are even more common. These old ways of processing and presenting information fall far short of the potential for data analysis, cash visibility, and the rich user experience that the latest technology can offer. Open-banking APIs give finance professionals the keys to unlock better cash visibility and data analysis. 

From generating cash flow reports to running bank reconciliation, there are opportunities for efficiency in every department. Streamlining tedious manual workflows provides teams with the freedom to focus on more strategic work, ultimately enabling better decision-making.

Step 2: Get the Team Onboard

When exploring the benefits of using a new platform, bring everyone to the table by explaining cross-departmental benefits. Illustrate how real-time cash data can provide the business with a competitive edge. For the CFO, automation means more accurate reports on-demand. Finance teams can leverage API connections to collect and standardize data for forecasts. APIs also provide a secure single source of truth for your cash data, streamlining data collection for your accounting department. Cloud-based platforms also remove the burden of implementation from your IT department.

Step 3: Ask Critical Questions

When evaluating a solution, consider the following: 

  • What is the onboarding process like, and how long will it take?
  • Are the connections based on APIs, BAIs, or MT940 files?
  • How will this technology integrate with or replace existing systems?
  • What kinds of training and support are available to users?
  • Can this tool scale to meet the needs of my growing organization?

Thoroughly understanding how open banking technology works to solve your problems and automates repetitive or time-consuming processes will go a long way toward making the transition smooth and successful. 

Step 4: Stop Relying Heavily on Spreadsheets

Your organization’s digital transformation will open new pathways for data access and limit reliance on manual processes. The result?

Automated Processes

  • Simplification: A new commitment to automating time-consuming and tedious tasks will simplify record-keeping and make accessing those records a breeze. API technology will connect you faster than ever to the data you need and simplify processes that used to require significant work hours and expertise.
  • Compliance: Automation will also reduce user errors for mundane tasks, helping to ensure that best practices are consistently observed, that payments are made on time and that your company meets its regulatory obligations. Sophisticated artificial intelligence programming will help to ensure prompt and correct calculations.
  • Accuracy: Automated processes to capture data in real-time results with greater accuracy. No more sifting through endless transactions or manual errors. This means that important business and financial decisions can be made with more clarity and certainty, improving your company’s overall health and performance.

Improved Visibility

  • Normalization: Thanks to API technology, new financial platforms centralize and normalize data from various disparate sources, allowing you to gain insight into cross-currency transactions and multiple payment channels.
  • Communication: A single user-centric dashboard or reporting system provides more utility across departments, helping everyone stay on the same page with the same data set. 

Optimized Decision-Making

  • Risk Management: Evaluating risk becomes much more practical as data is captured in real-time, and up-to-date reports are generated in a fraction of the time. 
  • Cash Management: Cash forecasting becomes much more accurate thanks to machine learning algorithms that sift through historical cash data. This means that a company’s liquidity risk is much lower, reducing the risk of insolvency and creating a more efficient day-to-day management of accounts receivable, vendor payments, and more.

Trovata Platform leverages open banking technology to provide financial professionals with real-time data. Our proprietary machine learning algorithms and AI technology enable us to connect, streamline, normalize, and analyze data from multiple channels. Our reporting and forecasting dashboards provide at-a-glance visualization for multi-layered analysis. 

Learn how Krispy Kreme leveraged open banking APIs to scale its treasury and manage cash like a pro.

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