NAB’s Vision for a Corporate Treasury Agenda to Help Clients Improve Strategic Liquidity Management

Joseph Drambarean

Welcome to Fintech Corner. We have a special edition of Fintech Corner today. We are in none other than Melbourne, Australia, and I’m joined here by my fellow colleagues here at NAB. We’re at their headquarters here in Melbourne, and I’m so excited about today’s episode because we’re going to be talking about the partnership between Trovata and NAB.

And kind of more importantly, what has kind of spurred all of this innovation and how we’ve gotten here? But first of all, I was hoping maybe you guys could introduce yourselves for the folks in the States that are fans of FinTech Corner and just kind of what your roles are in the bank and kind of how we’ve engaged. 

Jon Adams

Sure. Great to be here, first of all, and great to have you guys here in Australia. So my name is Jon Adams. I head up the product team for payments and cash management within our corporate institutional banking business.

Brett Healy

Yeah, and I will just echo Jon’s comments. It is great to have you here and it’s been great spending time with you as one of our partners. I’m Brett Healy. I head up a small team of specialists who work with our clients on the design and execution of liquidity optimization structures and strategies. 

Joseph Drambarean

Jon, I thought maybe I’d start with you. When we think about bank innovation, a lot of the things that often come to mind are whether or not the bank can deliver services and experiences that can meet clients’ demands.

It’s been interesting to hear how you all have been approaching the problem space of bank innovation. I was wondering if you could kind of give us some insight into what has driven the need in the market and how you guys have addressed it. 

Jon Adams

Yeah. So when we think about innovation, I think we, what we’ve done more recently is we think about what is core. We look at our own capabilities and what’s really important for us and our clients, and we’ll make sure we invest in that.

When it comes to innovation, maybe sits outside of our core capability. And I think the partnership with Trovata is a great example of that, where there’s a really high degree of specialization, whether it’s technical or technology specific or product related. That’s when we start to think about, well, how do we partner? How do we find the best in market? And that’s how all this started, actually. We talked to our innovation and ventures team and we talked to them about our vision for the transaction banking business and corporate institutional. And that then helped them think about how could they help when they focus on potential partners out there, they’re able to hone in on the areas that we’re looking for that, the specific expertise. And that’s how all this started. One of those areas was data analytics and cash flow forecasting. We saw that as a core thing that customers grapple with in day in, day out, whether they’re small to medium businesses or large corporates. And that’s kind of how we discovered Trovata. 

Joseph Drambarean

Brett, as you kind of been engaging with clients and you’ve been hearing some of this feedback, what have been the themes kind of emerging, kind of working with customers on the front line? 

Brett Healy

I might add to Jon’s answer and then answer that as well. So I think if we even go back maybe a few years further back and we actually sat down and looked at our treasury client or our corporate treasurers and said, what do you need from us? What do you want from banks?

So we actually come up with this concept with Jon that we were calling the corporate treasury agenda. And so the first part of that was delivering liquidity management tools, you know, to improve visibility and optimization, automate and control, but I think also look at how they can better understand their funding and manage liquidity more efficiently. So that kind of first phase of what we call the treasury agenda was just to deliver some liquidity optimization tools.

Then we started talking to our clients and like, these are really great. They’re helping us tactically manage cash and liquidity, but we still have this fundamental issue with we cannot forecast accurately long -term. We need help. Is there anything the bank can do to support us through that? And I think that, as Jon said, that’s where we started to say, all right, well, what else can we do for our clients? We’re starting to help them with the optimization, but it’s still not enough to take it from tactical to strategic. You can look at how they can better plan out the liquidity.

So we, as Jon said, is finding a partner who can really help us take that to our clients. That was a key focus. And I think that’s where we get really excited with what we’re starting to do with Trovata through Liquidity+. 

Joseph Drambarean

You know, what’s interesting when kind of thinking through the space of these clients, when you talk about forecasting liquidity management, it seems like those tactics are the front line. They’re kind of the areas that you would expect to kind of solve first. And we’re talking about clients that typically they are strapped for resources, right? 

Especially from, you know, the personnel that’s available in the first place. It seems like a quantum leap to even begin to talk about maybe more advanced topics like data transformation, like, you know, AI, you know, machine learning concepts like this. Do you feel like NAB plays an important role in supplementing the resources of your clients by providing access to these tools and innovations and kind of helping create and facilitate pathways to get there?

Jon Adams

Absolutely. I think it’s a core role of a transaction banking product team and the sales team to bring those solutions to market. So, you know, our whole role is to help finance and treasury organizations become more efficient to build and design tools that solve their everyday problems so that they spend less time on getting the data or transforming the data or ensuring the data is correct and spend more time on analyzing that data or a lot of that is about automation of manual processes or manual activities. And I think that’s core to what we do as a team. 

Brett Healy

There’s a second part to me as well is our clients are also, they’ve got resource constraints and tech budgets have evaporated at the back end of COVID. And so they’re saying, hey, banking partner, we’ve got problems, but we just don’t have resources to address these. Is there things that you can do? Can you help us with some of these challenges? And I think that’s where we’re really excited to be able to step in and support that.

Jon Adams

And just to build on that point, I think it’s even more acute when you think about transforming internal, invisible processes. So if investment dollars are going to be found or capex, it’s typically going to go on the customer experience or the front end. Probably the last area they’re going to spend it on is things like internal treasury and finance systems that don’t have the same obvious ROI or return on investment. So totally agree. And I think it’s more acute when we think about the finance part of the organization. 

Joseph Drambarean

I think that’s also something that’s very clear even when it comes to procuring the best solutions or the right strategy when it comes to data transformation. I think that ultimately when you are underserved as a target segment or a buyer segment, you typically have less at bats and less opportunity to get familiar with whatever might be the best practice. And I think that seems to be another important role that you’re playing is that, because of your influence in scale and visibility into the best in the world, you almost sit in this kind of unique crossroads of facilitating but also providing solutions. 

Jon Adams

Correct. So when I look at the partnership with Trilata and what that brings, and we’ve obviously branded that as NAB Liquidity Plus, it’s exactly what you’re describing. It is essentially bringing advanced product capability to a scaled market. And that’s effectively what we’re doing. And what it means is that whether it’s a small to medium business or a large corporate who knows their business, they understand how it works. They understand the nuances of that business. 

What this brings is a level of technical specialization or a tool that helps them get the most out of that. So combining those two things should make them far more effective at treasury management services, liquidity management, and in this case, cash flow forecasting. 

Joseph Drambarean

I’m curious and I’ll let you jump in in a second, but as you’ve been delving into this market, it seems like you are straddling the role of, as we had mentioned, kind of providing that solution, but also now getting involved in the tactics, the day -to -day with the customer in a way that, correct me if I’m wrong, that typically has not been something that has been done in the past, especially from a product perspective and an operations perspective. How has that gone? What has it been like kind of being more closely involved with a client’s needs on that front and kind of helping productize some of the offerings?

Brett Healy

Look, I think what’s really exciting is we’re helping them solve a foundational issue in treasury. And cash and liquidity management is always the number one priority in every survey, every client we talk to. It’s always the number one priority, but it’s also the number one challenge. So when we talk to clients about what are their challenges, it’s always, well, I don’t have the visibility. I don’t have the appropriate data to help solve this. 

And it feels like whilst there has been some form of evolution in the treasury technology, it hasn’t helped move cash and liquidity management or cash flow forecasting too far from a technical perspective. People are still using spreadsheets. People are still relying on manual processes.

And I think it’s really exciting that we can come to our clients and say, we know you need to make better use of your data for decision making. We know that the cadence of reporting and the scenario planning has completely changed and been completely disrupted through the last few economic cycles, COVID, post-COVID, and now what is happening now with higher inflation and higher funding costs. So we are now helping our clients and developing a really intimate relationship with our clients and how we can help them solve some of their day -to -day challenges, but also how we can take them up a level and enable them to be more strategic in it. You know, have a seat at the table as the saying goes from a strategic perspective. 

Jon Adams

I mean, that’s been talked about for years, right? Treasurer is a stronger seat at the table as sort of CEO level. And I guess this is an opportunity in that, that they can access not just the data, but the insight using the product that sits behind the Trovata application. And, you know, hopefully makes that even more real than it’s, you know, it’s been talked about a lot, but. Hopefully it turns that into something that’s actual and real. 

Joseph Drambarean

So it makes me curious, you know, as you’ve been delving into these client problems and solving them together, do you feel a level of responsibility than when clients are also interested in advanced capabilities, right? All the talk in every circle of tech at this point is how AI is going to transform not just our daily routines, but it’s going to make us better versions of ourselves. And I’m sure that when you’re sitting in the role in treasury where you’re coming from highly manual processes, you’re doing things in Excel, you’re doing things in a low leverage way, the idea, the quantum leap to AI just seems almost incomprehensible. And how have you guys navigated that given the freshness of some of these topics?

Jon Adams

I think we see we certainly have a role in that. At NAB, we’re certainly taking a really close look at generative AI and AI in general. We have AI in general probably for years. So I think we see we have a role that if you think about banks, one of our core pillars is trust. There’s a huge amount of trust in us looking after people’s data, looking after people’s money.

And actually that trust could be super powerful when it comes to these kinds of new technologies, new services. If NAB has done the assessment, looked at the possibilities, but also at the risks and we’ve managed to get comfortable with that. And then we bring that as part of our solution. I think customers would see real value in that because it gives them a level of comfort and assurance that this is a safe thing to use. And we will, we will make sure we deliver it in an extremely safe and secure way in terms of how we deliver that within our services to our clients. 

Joseph Drambarean

Yeah, sometimes a lot of the assessment is in strategic insight and whether you see a path. And I’m curious, having delved into a lot of these technologies, because I know that both of you have access to a lot of the skunkworks activities and all the things that are being worked on at the bank, putting your futurist hats on, what do you think about the future of AI? What do you think the role it will play will be in the short term and in the long term?

Brett Healy

I’m not going to call myself a futurist, but what I will say is from the moment Google came out with, is it, what is it? Google, what’s the AI? 

Joseph Drambarean

Gemini?

Brett Healy

No, no, just the base one, the Google, the chat. 

Joseph Drambarean

There have been so many. 

Brett Healy

Just that little kind of home thing where you could go, Hey Google, order me a pizza. 

Joseph Drambarean

Oh right. Yeah. Google assistant. 

Brett Healy

I was waiting for what I call the treasury assistant. Hey Google, give me a projection of my cashflow for the next two weeks. Hey Google, do I have any liquidity shortfalls I need to be starting to think about over the next six weeks? What is my FX exposure? You know, they’re the things, and I know that’s more futuristic, but I kind of see some of the advanced analytics that treasurers need to understand being democratized through that process of generative AI. And that’s the bit that I find really exciting is these tools are typically hard to access. I take the technical skill set that in a resource constrained environment, treasuries are never going to have access to. And that to me is the really exciting part of where Gen AI can really play a role. 

Joseph Drambarean

Yeah. I think that you just hit the nail on the head because one of the things that even if you’re in a resource constrained environment and you’re looking to procure advanced treasury solutions, the next conversation is, we will need a team, a team of consultants and staff to help train us on how to use it, set it up in the first place and get us to value. And it seems like you know, that brain damage, if you will, of having to go through that cycle and process, but then also not being able to evolve because of the expenditure, the immense expenditure to get it up and running in the first place, seems to be totally flattened by the possibility of, as you mentioned, having a conversation, true conversation with an entity that is able to understand you on the other side, right? I’m curious, from a product perspective, Jon, how have you guys thought about the possibility of experiences changing over time as a result of generative AI?

Jon Adams

I think Brett described it well. I think moving into conversational, we’re only starting to realize that now. And I think the exciting thing about it is that, especially as someone who’s also a little bit older, I think, you know, in some ways you could look at this and say the technology is new and changing rapidly and I can’t keep up with it. But another way to look at it, and in fact, the far more likely way this is going to play out is that actually the unique thing that people will have is experience, knowing how to ask the right questions. 

That comes with time and experience. And actually generative AI removes that technical barrier. So in the past, let’s say you were doing AI or machine learning, you needed to have people or access to people with coding skills. With GenAI, you won’t need that. So that barrier gets removed. And so the people who will benefit most out of this are the people with the most experience. And the reason that’s exciting is because that can have the greatest impact on the company. So we’re certainly thinking about that as we evolve our products and processes. And as a bank, the privilege we have is that we create these solutions, and we have access to millions of customers. We have 5 million consumers in Australia, circa nearly a million businesses, Australia’s largest business bank. So we can have a huge impact on the community and businesses and people in Australia by investing in these things and then taking them so that everyone can access them. 

Joseph Drambarean

Shifting back to innovation, I know that the temptation is always so high to talk first about AI, but are there any other modalities and areas on the innovation front that you two are excited about that are in the pipeline? 

Jon Adams

Yeah, probably the biggest one, noting we’re in the transaction banking space, that the other big one that we’re very focused on is real -time payments, referred to as account to account. Real -time payments is a relatively new payment type if you think about it over the last sort of 40 years, but it’s started to grow rapidly, whether in the US, but also in Europe and UK, Singapore, Thailand, Australia.

And we’re really seeing adoption and take up of that moving very quickly. But not only adoption and take up to replacing the old overnight batch based solutions, but actually creating whole new ways, whole new problems to be solved and new ways for customers to interact with payments. And you talked about AI before and generative AI. If you think about the horizons of how that will be used, the next horizon you can see it being used will be for ordering things. 

And if you’re going to be ordering things, then you need to have a payment. If it’s a payment, it needs to be real time. It needs to be interactive. You need to have real time responses on those things. So, you know, I’m pretty excited about the fact that we’re working on real time payments for things like e-commerce that’s never been used before. And that will also lead us to be able to do those sort of generative AI real -time experiences. 

An example I heard the other day was, a couple of examples. One is you might be going to the train station to go to work. Today, we all have to get out and we have to go and buy a parking ticket. In the future, our assistant built into our car will know that we’re parking and it will buy the ticket for us. To do that needs to have an embedded payment service with it. 

Another example might be you’re driving home from that train station. And you need to, you want to get pizza for dinner and it will be able to order your pizza and pay for it. So you can just drive through and collect it. So payments and real-time payments will be really embedded into our experiences in the future. And that’s exciting. 

Joseph Drambarean

Do you believe from the kind of clients that we’ve been talking to and how we’ve been kind of thinking about the innovation in the treasury space that these modalities AI real -time payments, that there is a future horizon where that can overlap with their day-to-day as well? 

Brett Healy

I think there’s a part of real -time payments that we sometimes miss, and that’s the ability to transport significantly more information. So all of a sudden now we have a real -time mechanism that can also be useful in the amount of information it can provide to then trigger a subsequent action on the other end. And that to me is where we start to see the true benefit of automation. It’s not just in the ability to execute, but it’s to trigger a secondary execution and a third theory. So we start to automate what has typically been very manual, high cost transaction processes or treasury or finance processes. So that to me is where I get really excited tactically, but I look forward to not buying my train ticket and I look forward to not, you know, not having to think about what I’m going to order. Just let the AI tell me what I needed to probably sell me, I need to eat less, but outside of that, you know, it’d be good to have someone else making these decisions.

Joseph Drambarean

A question to both of you, and this is one that we fielded at the AFP conference in San Diego last year, and it was one of key interests. Given all of these technologies, AI, the use of machine learning and forecasting, new payment types, the evolution of how we interact with visibility and liquidity and all of that, do you see a sea change coming when it comes to the role of treasury, an evolution to that role? 

And it’s one of the things that, at least from a treasury perspective, there’s angst and fear about these systems replacing them or their role being kind of put to the side because of these types of automations. And I’m curious what you think about that and if you think that there’s opportunity for leverage and kind of growth. 

Jon Adams

My initial view on that would be, I don’t think they should fear it. I think they should be excited about it because certainly in the first instance, it’ll enable them to do their job more easily, more effectively, and most importantly, enable them to have far more impact on the organization, which means, you know, the CEO and CFO are going to want to engage them more. 

So I think that’s a really positive thing. What we’ve seen over many, many, many hundreds of years is that technology comes in and changes things. What we typically see is fear around job loss, but actually what ends up happening is whole new communities of jobs exist that we hadn’t thought of before. And I find it difficult to believe that this won’t be true as well in this scenario. But fundamentally, the role of the treasurer will not go away. I mean, organizations need to understand their cash flows. It’s the lifeblood of how they survive. If they run out of cash, they go out of business. So I don’t think that will go away. I think what will happen is they’ll be able to do it more effectively and actually their role will grow and evolve in a positive way. 

Joseph Drambarean

Yeah, I think that’s an amazing insight. And ultimately, the fear of the uncertain, it only is kind of made worse if you don’t embrace the opportunity to learn all these new things. And it kind of sounds like you sit in a unique position because you’re not only providing and facilitating the tools, but you’re also helping and being part of the process. 

Brett Healy

I’d like the idea to touch on what Jon’s saying. Treasury has always wanted to be more strategic, to always have that seat at the table. But when I talk to our treasurers, it’s, they’re very much under-resourced. It’s a very small team of treasury specialists. They’ve got legacy technology. So most of the time, 100 % or 120 % of their time is actually just trying to get the minimum base outcome of how much cash do I have? Do I have a liquidity gap that I have to fund over the next few weeks? What other things do I have to manage? Do I have some FX risk that I have to look at mitigating, you know, funding risk, liquidity risk? These are all the things that I think they’re just really tactical.

And they just never have the chance to actually be more strategic, to actually get involved in looking at how they can support the business strategy around acquisition or how to finance different transactions. And this is where I think we can really enable treasurers to actually leverage the data to automate certain processes, but actually start to make really core decisions for the business.

Joseph Drambarean

That was great. And guys, thank you so much for taking the time out of your extremely busy days. I’ve gotten used to see you guys operate and I appreciate you stopping by Fintech Corner and we are excited about the partnership and thank you for having us here in Australia. We’ve really enjoyed ourselves and for those watching at home, we’ll see you guys next time. This has been Fintech Corner.