Treasury APIs: Banking on a New Connectivity Ecosystem

By Eleanor Hill, Editor of Treasury Management International

Eleanor Hill (EH): Congratulations on your Award win – the third in as many years. This time, DBS RAPID was the winning solution. How can treasurers benefit from this?

John Laurens (JL): Companies are intensifying their focus on digital - from specific initiatives to new business models and platforms to create competitive advantage and realise their commercial ambitions. This also involves driving greater use of the cloud, be it for the creation of new commercial business propositions or the migration from legacy systems to cloud-based treasury and finance systems. As a consequence, connectivity of treasury, finance and commercial business platforms, with banking solutions via APIs, has become the standard today. As has been recognised by TMI, DBS RAPID (Real-time APIs with DBS), has led the world in corporate-bank connectivity.

Embracing digital is also changing the shape and nature of the interaction with banks. Traditional RFPs and Sales engagements are looking increasingly passé, as they are being rapidly replaced by co-creation partnerships, the application of human-centred design thinking in solutions development, using agile and customer-journey centred practices. All of which are essential ingredients that enable companies to deliver a differentiated experience to their customers and suppliers with speed.

 

EH: OK, before we delve into the solution itself, for those of us who aren’t API-savvy, could you give us a short recap as to what they are?

Photo: John Laurens, global head of transaction banking at DBSJL: APIs or Application Programming Interfaces have been around for some time, however, as mentioned, with increasing use of cloud-based tech stacks, corporates are creating unparalleled transformational change enabled increasingly by the innovative use of APIs. The machine-to-machine connectivity at the core of API use, brings continuous and instantaneous interactions across a broad spectrum of transactional and information management process flows and systems. This increasingly includes connectivity with banks and other financial service providers. It’s the very nature of this connectivity that is enabling companies to create transformational change, be it at the heart of their commercial platforms or in supporting treasury and financial systems.

JL: APIs or Application Programming Interfaces have been around for some time, however, as mentioned, with increasing use of cloud-based tech stacks, corporates are creating unparalleled transformational change enabled increasingly by the innovative use of APIs. The machine-to-machine connectivity at the core of API use, brings continuous and instantaneous interactions across a broad spectrum of transactional and information management process flows and systems. This increasingly includes connectivity with banks and other financial service providers. It’s the very nature of this connectivity that is enabling companies to create transformational change, be it at the heart of their commercial platforms or in supporting treasury and financial systems.

With DBS RAPID, our customers can seamlessly integrate DBS’ banking services into their platforms, eliminating or avoiding ‘old tech’ costs that have no place in today’s digital business models. For example, Gojek, a leading Southeast Asian ride-hailing platform, wanted to help their drivers who were used to dealing with physical cash, become comfortable with accepting cashless real-time pay-outs of their earnings. Gojek implemented the DBS RAPID solution, thus ensuring that drivers are paid electronically via a mobile app immediately, as and when they choose to cash-out. This is a frictionless experience that empowers drivers and thereby brings enhanced employee and customer experience.

DBS has worked with numerous companies to create and deliver solutions that enhance customer and employee experience across a broad range of industries. These solutions require the seamless dovetailing of treasury and accounting systems with commercial platforms and applications, invariably by using APIs. This is having a profound impact on the role of the treasurer and its continued evolution. In addition to the treasurer’s established responsibilities, today’s treasurer is increasingly engaging or being engaged by his or her commercial and technology counterparts around the application of cloud-based technology and API connectivity to create new business opportunities and competitive advantage.

Another example of this is Lykos - India’s first online refined metal sales platform. Lykos was seeking a partner bank to implement a robust, progressive digital solution to create this platform and be able to scale it for future growth. The solution provided real-time updates of incoming flows into buyers’ trading accounts, together with the ability to initiate refunds or debit pre-funded e-wallets instantly. The DBS RAPID solution enabled Lykos to create and scale the operational processes and customer trading platform and thereby establish this new line of business.

EH: Tell us more about DBS RAPID and the functionalities on offer.

JL: With DBS RAPID, we have published an extensive and growing array of APIs, examples of which are summarised in Fig 1.

For example, in the automotive logistics and natural rubber supply chains, DBS used RAPID API connectivity in conjunction with customers’ blockchain platforms, to integrate parties to industry ecosystems to bring immediate and clear transparency, from the status of orders to the sustainability credentials of suppliers and their processes. In addition to meeting the sustainability objectives of these ecosystems, this approach also enabled smaller businesses further down in the supply chain, to access working capital finance that previously they couldn’t gain access to.

EH: Could you give some examples of how companies are using solutions featuring API connectivity to gain a competitive edge?

JL: There are different potential use cases in almost every sector, and it’s really exciting to work with clients on new ways to leverage APIs to create seamless operations, and to transform the experience they offer to their customers. I shared examples earlier where we have done this with clients in transportation, logistics and e-commerce. There are many more examples across different industries we have worked with, to achieve similar benefits and create transformational change.

In the insurance sector for example, we introduced our DBS RAPID suite to help insurance companies leverage their investments in artificial intelligence and machine learning to reduce decision-making cycle time for policy claims. The combination of the latest in insurance claims management technology, with 24x7 immediate payment services delivered via RAPID, is powerful. As a result, insurers are now able to automatically settle claims at the point of approval, and at times, before a claim has even been made. RAPID has proven to be transformational for insurers as it enables them to significantly enhance the experience they deliver to their policyholders.

Singapore Airlines (SIA) is another example. As part of SIA’s drive to enhance customers’ travel experience and continually improve competitiveness in a fast-moving operating environment, SIA focused on enhancing customer experience to underpin revenue-generation initiatives and improvements in operational efficiency. SIA and DBS signed a memorandum of understanding (MOU) to enhance digital capabilities across various digital platforms and enable a seamless banking and travel customer experience for passengers. Under the MOU, SIA and DBS are collaborating to introduce digital flight booking and merchandising capabilities on DBS’ platforms, and, the expansion of payment options for SIA customers leveraging digital payment capabilities through DBS RAPID.

The success of this model can be seen in our partnership with global agri-commodity trading company, Agrocorp International. We collaborated to develop a first-to-market innovative blockchain-based electronic platform to digitise the entire process for commodities transactions. With the implementation of the blockchain platform, Agrocorp and its counterparties are also able to enjoy a seamless and more secure transfer of goods ownership and payments. The streamlined process cuts Agrocorp’s average working capital cycle by about 20 days, and helps farmers receive payments for their goods more quickly, making it a win-win for all.

EH: Finally, how do you see bank connectivity progressing during 2020 and beyond?

JL: As mentioned, APIs have set the standard for corporate-bank connectivity and their use in creating innovative solutions for companies will be at the forefront of product development in transaction banking.

As we’ve seen at DBS, having built our product suite on cloud-based architecture, this has enabled us to quickly create an API suite to drive the development of innovative solutions and be very responsive to customers emerging, and invariably digitally driven needs. Being an intrinsic part of the transformations and new businesses that customers are producing through our co-creation workshops to discover, define, develop and deliver solutions has fundamentally reshaped our engagement with customers. API connectivity has been a catalyst and enabler in this regard.

Treasurers will increasingly leverage API-enabled transaction banking solutions to bring about transformational change in partnership with their commercial business units, as they seek to embrace digital and leverage the cloud to create new business opportunities. Exciting times for all!

Have a conversation with DBS today.

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This article was first published by Treasury Management International in March 2020.

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