TMI | THE SOUTHAFRICANTREASURER 5 NEXT GENERATIONTREASURY world, where everyone works off the same metrics,” Fenwick explains. While SWIFT (Society for Worldwide Interbank Financial Telecommunications) already exists within the international banking framework, the differences between SWIFT and APIs is subtle yet significant. While SWIFT is a centralised messaging system that banks and other financial institutions use to send information quickly and securely; an API is a software platform that allows several different system to interact and communicate with each other. “SWIFT is a very mature systemwith a standardised way of engaging,” says Fenwick. “If you want to engage in SWIFT you have to build your systems to have certain structures, with tags and fields in a certain format, whereas with APIs everyone has been building their systems in different ways, so there’s no formal, standardisedmarket. Everyone’s trying to execute according to best practice, but you still have a lot of discretion being played out at the moment, whichmakes it tricky for corporates that are multi-banked.” While the intricacies and nuances of API standardisation will take time, Fenwick believes that it will be worth the wait for corporate treasurers. “They’ll have more robust access tomuchmore real-time, consolidated information,” he says. “Ultimately, the treasurer’s responsibility is managing the liquidity within the organisation andmaking sure that the organisation is funded across all its business arms. Currently, if the business is multi-banked or multi-jurisdictional the treasurer might have to access 10 or 15 different services to obtain the information they need. Once we get to the point of API conformity, it will change the landscape completely. Treasurers will have all the information they need on hand tomake quick decisions on transactions.” Shaped by treasurers Ultimately, client demandwill drive the technology as it rolls out. As a result, Fenwick says, Absa’s clients will play a central role in shaping API technology. “It’s about us fitting into their world, not themfitting into ours,” he says. “That’s the big change in howbanks will interact with corporate treasurers in the future: fitting into your world andmaking your lives easier, as opposed to you having to interact within our systems and our various platforms.” Before the pandemic – and themassive digital revolution it catalysed – if clients wanted to use a bank’s full proposition, their treasurers would have had to contendwith four or five platforms with just one bank. “We’ve done a lot of work to simplify that and bring everything onto one platform,” says Fenwick. “That takes away the need to execute and interact onmultiple platforms, while at the same time giving treasurers greater control.” Minimising risk For now, the demand for treasury APIs is being driven by fintechs and large global corporates. Some only want a rate streaming service for indicative or hedge accounting purposes, while others need a full suite of products. “The dynamic of the clients is quite different,” says Fenwick. “At Absa we’re dealing with fintechs that are very strong in the remittances space and that are looking for more efficient ways tomanage their treasuries; and thenwe’re also dealing with verymature, large global corporates, whichwant tominimise their operational or human error risk.That meansmoving away fromconfirming FX tradesmanually to using an automated system. Global corporates – which often deal with hundreds of banks acrossmultiple jurisdictions – also want tominimise the number of systems they use. APIs enable that.” But while the demand is particularly strong among large corporates and fintechs, Fenwick believes that will feed down to the mid-corps as API technology matures and becomes more accessible. “We’re looking at the partnerships we can establish tomake this information available to those smaller or mid-sized corporates,” he concludes. “They’ll still use our platforms, but it’s about making those services available in a cost-effective way. And I think we’re seeing that in the eurozone’s open banking framework. The technology is driving us in that direction, where we’ll start sharing services – whether with clients or across industries – and the accessibility of those services will be a lot broader than it was previously.” n PAUL FENWICK Head: Foreign Exchange Business Bank Sales, Absa CIB Paul Fenwick is currently head of the FX team at Absa CIB, covering the Retail and Business Bank client base in South Africa for the past three years. Prior to that, he was the head of Digital Market Sales for Africa for four years, focusing on rolling out and developing platforms for clients across the 10 countries where Absa has a presence. He started his career at Absa as the Head of Digital Market Sales for South Africa for five years, focusing on building and increasing digital adoption. Absa’s clientswill play a central role in shapingAPI technology.
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