20201027 generated funds
Working capital and its handling will need a helping hand from digital tools. Businesses cannot afford to delay the switch on this front. Image Credit: Ador T. Bustamante/Gulf News

It's no secret that the coronavirus outbreak has dramatically accelerated the move to digital-first experiences – but it has also compelled businesses across almost every sector to acknowledge that they've been slow to navigate innovation and embrace change.

Finance departments, in particular, have been forced to recognize that digital management of working capital - and cash and cross-border payment flows - is a reality they ought to have proactively welcomed some time ago to function more efficiently and perhaps more effectively too.

Read More

Awareness to action

In 2019, Deloitte's Global Corporate Treasury Survey found that improving data visibility was the number one challenge for treasurers, and according to a 2019 Global Treasury Benchmarking Study by PwC , more than 60 per cent of corporate treasurers see the potential in data analytics, robotic process automation and artificial intelligence in the next two to three years.

However, while aware of the opportunities – and challenges – presented by such technologies, it has perhaps taken the global pandemic to force many finance departments into action. Indeed, as treasurers have been confined to working remotely, COVID-19 has acted as a spotlight on critical pain points of weak coordination, untimely visibility of transactions, and messy, fragmented processes across multiple system interfaces.

Central to recovery

But never has having a firm handle on trade, treasury and liquidity management been as important as in the current economic landscape. For companies of all sizes, unlocking tied-up working capital isn't just about flexing financial muscle now, it's about business continuity, survival, and saving livelihoods, in what is expected to be a prolonged recovery period.

Having a single solution to make and receive cross-border payments quickly, seamlessly, efficiently, predictably, and securely, with full visibility of financial relationships, accounts and activities across markets and currencies in real time, isn't just a 'nice to have' anymore – it's an immediate necessity. Ultimately, a good liquidity strategy won't work without a streamlined tool in place, and banks simply must respond to this need.

Bridging gaps

Global banking has already started down this path. Earlier this year, J.P. Morgan formed a strategic alliance with working capital technology solutions provider Taulia to deepen the global investment bank's trade finance value proposition for clients. As companies continue to cope with uncertainty and extraordinary disruption, these trends are expected to accelerate, and as financial institutions we now have a significant opportunity to invest, co-create and evolve for the road ahead.

Businesses are depending on us to help them make the leap to more innovative ways of working so they can better manage their cash in the new environment, not only to survive any COVID-19-created stress circumstances but also so that they can thrive in its aftermath.

- Ahmed Al Qassim is Senior Executive Vice-President and Group Head - Corporate and Institutional Banking, Emirates NBD.