Smart treasury, safer payments

Lynn Norris:

Welcome to Navigating Beyond The Expected, a new podcast from Truist Securities. So much of business success depends on the way money moves, and smart companies are rethinking their treasury systems to stay ahead. I'm your host, Lynn Norris, and today I'm talking to two Truist colleagues who are well-versed in the movement of money. Jim Pirouz is head of corporate banking at Truist Securities, and Chris Ward leads Truist's Enterprise Payments team. Hi, Jim and Chris.

Jim Pirouz:

Good morning, Lynn.

Chris Ward:

Hey, Lynn, how are you?

Lynn Norris:

I'm great. So great to have you both here. Jim, you're head of corporate banking at Truist Securities. And, Chris, you're in charge of enterprise payments, but how do these roles intersect, and why does that partnership matter to clients? Chris?

Chris Ward:

It's really critical that you're wrapping the balance sheet and the P&L with the need to move money. And all of those pieces are really critically bolted on together to the health of a company, and why we bring the insights that we do to our clients from both a capital structure, as well as a liquidity and money moving capabilities.

Lynn Norris:

Chris, let me ask you about a phrase you use often in relationship to treasury and payment systems, the three S's of safety, speed, and simplicity. Why the focus on those specifically?

Chris Ward:

Yeah, the economy continues to evolve, and our clients, the lifeblood of their business is actually needing to pay vendors, receive revenues, pay teammates/employees, shareholders, etc. And the way money is moving today from back in the old day where we had a horse and a buggy maybe delivering cash or instruments, to actually doing things a lot electronically. So everybody's really trying to focus on speed, how fast can a transaction transverse, simplicity, which is critical to how people operate today. Nobody wants a complex transaction. Everybody wants to be able to understand it and do it in the most simplistic way. And lastly, everybody wants to really do things in a safe, sound, and secure manner and protect themselves. So, as companies are working with their clients, with their vendors, with their partners, with their teammates, they have to incorporate all of those three S's in the way in which they're going to execute their payments day in and day out.

Lynn Norris:

So, Jim, looking at corporate banking more broadly, safety, speed, and simplicity would also seem to be important in areas like investor confidence and deal execution. So how do those factors influence the advice your team gives to clients in areas beyond just payments?

Jim Pirouz:

From a corporate banking perspective, quarterbacking the relationship for our clients means that we are charged with delivering comprehensive capabilities to our client base. Truist universal capabilities support growth-oriented companies and institutional investors alike. So from corporate finance, asset finance, risk management, liquidity and treasury management solution, along with robust capital markets and investment banking, our job is to deliver deep industry experience along those capabilities as customizer advice. And ultimately coming from the stability and strength of one of the largest financial services firms in the nation, that being Truist.

Lynn Norris:

So what does it look like in practice when corporate banking and payments teams are working together? Can you give us an example of how that teamwork delivers more value for a client?

Jim Pirouz:

What we ultimately are advising on when it comes to treasury solutions and payments is making sure that we're making payment processes more efficient for our clients, reducing the cost of our clients' financial operations, integrating with their accounting and ERP systems, mitigating financial risk, reducing payment fraud, and at the end of the day, really optimizing their working capital and liquidity needs.

Lynn Norris:

Great. So, Chris, let me ask you, for a business leader listening to us right now, why should they think of treasury as something more than a back-office function? What's at stake if treasury isn't managed strategically?

Chris Ward:

You're thinking about ways in which you're going to generate more revenue for your company, and interacting with their end clients, taking friction out of receiving payments, making it as efficient as possible is really important to managing their working capital. Most companies are very focused on delivering a great experience to the people that they're selling goods and services to. And if you don't think about that from a strategic perspective and how to think about how you're going to delight your clients and making it so easy, going back to the three S's, simplicity, speed, and safety, they could potentially be at a competitive disadvantage. Payments really needs to be a strategic focus on delighting their clients.

Lynn Norris:

So with that background of strategy and collaboration in treasury management, let's talk about what's changing in terms of technology and innovation. Jim, before we dig into some of the new technologies and solutions involved, what's your take on why treasury modernization matters at the corporate banking level?

Jim Pirouz:

Our investments at technology and enhanced payments platform and expansion of our product offerings are all designed to continue to optimize and continue to streamline banking operations for our clients. Their needs are changing; their customer's needs are changing. And so, as a result, we are constantly evolving our technology and enhanced payments to not just keep up, but frankly lead the industry, help through our holistic approach, help our clients in the areas of cash management, advising and bringing up-to-date best practices for streamlining their cash flow in day-to-day operations in an ever-changing environment.

Lynn Norris:

So liquidity is a critical tool for most companies, and controlling liquidity can be complicated for big firms with lots of different assets. So, Chris, I'll start with you. What strategies and tools are evolving to help with that challenge?

Chris Ward:

As companies continue to manage their liquidity, at the end of the day, they've got three buckets of cash that they're really trying to manage. Their short-term working capital that's needed for the health of running their organization day in and day out. And that's where payments are so critical. There are intermediate funds which might be used for some intermediary planning that they have going on, whether that be a little bit of minor capital investment, etc. And then there's strategic cash, which might be being driven to manage strategic objectives of the company, whether it be M&A or other activities that they have going on. So we really work really closely with our clients over the life cycle of all of those cash needs to ensure that they're optimizing each one of those buckets to their balance sheet, to their income statement, etc., for the benefit of the entire organization.

Jim Pirouz:

When it comes to strategies around liquidity, we really think about it as a flywheel for our clients. It starts with optimizing liquidity, improving information access and accuracy, thinking about accelerating of receivables, controlling and extending payables, and ultimately preventing fraud as well. These are the key components to a strategy and a plan that we put in place when we discuss and advise our clients.

Lynn Norris:

Chris, what do you see as the most disruptive innovations in enterprise payments right now? And how are those innovations changing things on the ground for companies?

Chris Ward:

Think about if you had your phone in your hand right at the moment and you ordered a cup of coffee, you'd get immediate confirmation of when that coffee is going to be ready. When somebody makes a payment, they actually want to know that it's going to happen and that it did happen. And that's really when you think about the three S's and why we talk about execute simplicity, do it with speed, and speed comes information, and do it safely. So we've really got a lot of things going on with real-time payments where when you make a payment, you get immediate confirmation that it was made.

You also have all of our companies tend to be looking at investments in the technology that they use to run their companies, and there's new technology to be able to talk to your banks digitally, called APIs. And so as the ERP systems are being upgraded, those technology trends are really making it easier for clients to interact with their banks, interact with their banks in a real-time basis, and to be able to execute with insight and confirmation that transaction's occurring. So all of that is coming together to really speak to the digital economy that everybody's moving to with speed, simplicity, and safety.

Lynn Norris:

So with all of that digital consolidation and expansion and innovation, fraud has become a critical topic for companies today as scams can cost millions and erode trust. Chris, what have you learned about fraud trends happening right now?

Chris Ward:

Fraud continues to be a huge problem in all aspects of our life. I bet you if I asked everybody listening to this podcast today, did you pay your unpaid toll? You chuckle to yourself and say, "No, I didn't do the unpaid toll," saying really, at the end of the day, it's really imposter compromise. It could come via email, it could come via text, it could come via any way, and the U.S. mail from checks being stolen. All of those things continue to be problematic. And fraud unfortunately is like a balloon. When you squeeze it, meaning that you've tried to prevent it one place, it usually goes to a different place. What's really important is you've got to make sure that you're really looking through your fraud policies, your processes to protect yourself, and actually slowing down a little bit. If it seems suspicious, it's probably suspicious.

If the Taylor Swift ticket's price is too good to be true, it probably is, and it's probably a scam. And the same thing can be said in business. If you get this emergency, you’ve got to do a wire transfer to the CEO, and that's an unnatural thing, you should probably not do it and figure out what the right thing is. So take actions or reviewing your policies, ensure that you're taking advantage of all the fraud techniques and tools that are available from your financial institution, and make sure you're talking to your banker about what are the steps that they can do to protect themselves, whether it be a check, an ACH, a wire transfer, a real-time payment. There's all kinds of solutions that are available to protect yourself.

Lynn Norris:

So, I'm sure many of us got the text about our unpaid tolls, and knew better than to click on those links and pay anything. But what role do you see smart treasury technologies playing in fraud prevention? We have smartphones, and we can quickly Google if something's a scam, but in treasury technologies, it's not always just on your phone.

Chris Ward:

There's all kinds of things that continue to evolve in the treasury space. So take for example, just as something as simple as validating who you're going to actually be paying, right? So there's new technologies that say, "Hey, this is the first time I'm paying somebody. Does the recipient information seem legitimate?" And those technologies can be deployed in a treasury function to actually help prevent you paying somebody incorrectly. Talking to your banker about account verification services is a good example, or doing positive pay on your checks that you're still issuing, right? There's all those techniques that can be used to take advantage of the technology and the smarter technology that's available to help prevent fraud.

Lynn Norris:

Fraud prevention and treasury modernization are important right now, but of course, corporate leaders are also responsible for planning ahead. So let's talk a little bit about where treasury is headed next. Jim, in talking with clients, what needs are they telling you about that your corporate banking teams are going to need to be solving in the future?

Jim Pirouz:

Clients are telling us that they want to maximize cash flow, they want to keep up with the digital transformation, they want to optimize working capital, and they're very, very focused on security and control. By the same token, they're also trying to minimize manual processes, trying to reduce administrative expenses and costs, processing costs, and also reduce risk exposure, which we've been talking about. That's what we're hearing from clients and that's what we're attempting to solve on their behalf.

Lynn Norris:

And, Chris, it feels like artificial intelligence is being applied to just about every challenge these days, even though most of us are still trying to get our minds wrapped around its uses and its potential risks. But looking forward, what do you see as the possibilities for AI in the payments arena and what do we need to be cautious about?

Chris Ward:

I think there's two ways to think about it. Obviously, if you think about fraud, the topic we were just talking about, AI is a great example of using that to try to detect anomalous transactions, to detect fraud vectors, etc., and to try to prevent them. But on the flip side, what you could be cautious about is the fraudsters are going to use AI too. I joke with people all the time, it's like the battle of the robots in terms of whose AI is going to be smarter than the other person's AI fraud is an asymmetrical war. The fraudster just has to get one transaction through. Our customers and us have to prevent every fraudulent attempt from getting through. And so I think that's the paradoxical situation we live in, that the technology is going to really help us, but it's also going to be used by the fraudsters to try to attack things.

But at the end of the day, I think making smarter, faster payments using AI to help you pay the optimal way that benefits working capital and insights that you need for the business, I think is going to be a long-term gain. I bet you actually, everybody listening to this podcast will chuckle a bit because they're probably still using a spreadsheet to do cash forecasting. AI is another great example where you should be able to apply that to actually get better insights to your cash flow, your liquidity position, and how your funds are going to cycle through your account over time. So I think all of that cash forecasting is another ripe area where AI is going to really be helpful over the years.

Lynn Norris:

And is this where you see the biggest opportunities for innovation in the next few years, or are there other opportunities as well?

Chris Ward:

I don't think there's one set of technology that's going to innovate. It could be process improvement that's going on, it could be the faster payment rails and doing real-time payments and requests for payments. I think all of these things are going to be coming together to really delivering what I would call smart money and who's not going to want programmable money and money that's going to move with the right speed, with the right simplicity and the right safety, all together in a more automated fashion. Who's not going to want that?

Lynn Norris:

And, Jim, what do you think distinguishes companies that are building this smart treasury operations for the future from those that are or will be struggling to keep up?

Jim Pirouz:

The companies that more effectively embrace evolving payments technology are the ones that are not only going to be able to achieve the highest degree of efficiencies, but at the end of the day, it's going to allow them to leverage those efficiencies and optimize growth as well.

Lynn Norris:

There's a lot of technology to keep up with. Tell us how Truist can help—why people should be talking to their bankers and to your team about their treasury operations and how you guys can contribute.

Chris Ward:

At the end of the day, we're our client's trusted payments partner, and we're there to provide them insights in terms of where things are going in the industry, marrying with what's going on with their business to create the optimal solutions so that actually the movement of money and the collection of revenue, payment of vendors, etc., is a strategic asset of our clients to drive the most optimal P&L balance sheet working capital needs that our clients have to ensure their success. So all of that comes together to really create a holistic, trusted payments partner consultative approach to driving our clients' success.

Lynn Norris:

There's so much to this topic, so thank you both for helping wrap our minds around where treasury is heading. And I should note that there's more on the subject on Truist.com, including a Purple Paper that really dives deep into implementing treasury modernization. So we encourage everyone to download that. Now, before we let you go, I've got just a few more questions for both of you here, and I want you to answer them rapid-fire style. We'll go back and forth, and we'll start with you, Jim. What's something you loved doing as a kid that you still enjoy?

Jim Pirouz:

Playing and watching soccer.

Lynn Norris:

All right. Chris, what app on your phone are you surprised you use as much as you do?

Chris Ward:

Oh, that's a tough one. I won't give the company away, but it's probably a shopping app.

Lynn Norris:

Great. Me too. Jim, what's a recent moment at work that made you feel proud?

Jim Pirouz:

A town hall celebrating the success in the build-out of our corporate banking and our wholesale payments businesses.

Lynn Norris:

That's great. All right. Chris, what's the hardest personality trait to work with?

Chris Ward:

I think it's probably somebody who's already made up their mind before the discussion's already started. If you're trying to be consultative and trying to create new ways of doing things, that could be sometimes some of the more difficult folks.

Lynn Norris:

All right, we have one more, and you can each take just a little more time with this one if you'd like. Jim, what's one way you try to go beyond the expected in work or in life?

Jim Pirouz:

Building long-standing relationships, both professionally speaking and also personally speaking.

Lynn Norris:

That's so important. And, Chris, what's one way you try to go beyond the expected in work or in life?

Chris Ward:

Really trying to drive people to break down barriers. And I talk all the time about making friends with somebody who's different than you, that you can learn from that is maybe opposite in the way you think or the way you do things. It's a great way to actually build your skills and see different points of view.

Lynn Norris:

That was great. Both of you, Jim and Chris, thank you both for being here on Navigating Beyond the Expected, and I hope we get to have you back soon. Listeners, thanks for joining us on Navigating Beyond The Expected. Each month we bring you new conversations with Truist Securities experts on the issues shaping corporate and investment banking. Subscribe today so you never miss an episode, and check out more beyond the Expected Insights videos and articles on the Truist website. I'm Lynn Norris. We'll see you next time.

Truist Securities is the full-service corporate and investment banking arm of Truist Financial Corporation. With a rich history extending back more than 125 years, Truist Securities offers a robust capital markets and investment banking platform that includes a comprehensive array of strategic advisory, mergers and acquisition, and capital markets capabilities for corporate and institutional clients, including sales, trading and research services in both fixed income and equity. The firm also provides corporate finance, asset finance, risk management, liquidity, and treasury management solutions to meet clients' full spectrum of financial needs. Securities and strategic advisory services are provided by Truist Securities, Inc., member FINRA and SIPC. Lending, financial risk management, and treasury management and payment services are offered by Truist Bank. Deposit products are offered by Truist Bank, Member FDIC. Headquartered in Atlanta, Truist Securities has offices located across the U.S. Learn more at www.truistsecurities.com. This podcast is for informational purposes only. Opinions expressed in the podcast are current opinions only as of the date of recording.