Since the failure of Silicon Valley Bank back in March, finance chiefs have been on high alert for how to best protect their cash flow.
“Cash visibility is the biggest thing for them right now. As companies start to grow in size, they'll generally have more than one bank and several bank accounts. So just being able to see cash in one spot starts to become an issue,” said Brett Turner, CEO of Trovata, a treasury platform aiming to help internal finance managers gain better visibility into their cash flow management.
Backed by JPMorgan Chase, Wells Fargo and Capital One, Trovata is powered by its own library of corporate banking application programming interfaces. Using generative AI and ChatGPT technology, the company is allowing organizations to see further data regarding their cash flows.
Data is power
“Most companies now manage their cash on a spreadsheet if they're doing cash forecasting, or just cash reporting, but they get all that data from the bank portal,” said Turner, a former CFO himself. “Seeing all of your cash across various banks in numerous bank portals is hard to do, manual, and clunky,” he said.
The goal of Trovata is to bring all that data into one virtual solution, according to Turner.
The finance industry has been slower to adopt the technologies of generative AI due to fears of inaccuracies, but in order to come out of the current macro environment, especially given the current turmoil in the banking industry, having strong data is key, according to Turner.
Too small to succeed
In terms of action items that CFOs can take right now, a shift in mindset is shaping the way that finance chiefs are choosing to distribute their cash. “You've got this term that came out of 2008, through the Great Recession, ‘too big to fail,’ that was the whole thing about banks and that's kind of persisted, and now you have an emerging concept that's just too small to succeed,” said Turner.
CFOs of smaller companies are now thinking about contingencies they need to have, and part of that is redundancy, he said. Meaning, if one server goes down, they want to have another one that can provide the same functions.
“So everybody's looking at multiple banks to partition risks. So it's all about managing that risk and protecting your cash. And you're starting to see that happening even if you're not one of the big banks,” said Turner.