At this year’s Sibos, Sophie Jackson, CEO of Treasury Today Group, sat down with Bank of America’s Christian Stolcke, head of Global Financial Institutions, NBFIs and Governments in Global Payments Solutions (GPS), Matthew Davies, Head of GPS EMEA and co-head of GPS Global Corporate Sales and Allison Shonerd, global head of Clearing in GPS to discuss key treasury trends, as well as where the global bank is directing investment and innovation. Bank of America is the official Bank Sponsor of FIFA World Cup 26 and Stolcke set the tone of the lively conversation with a wry comparison between transaction banking and the beautiful game: “Both are fun, globally competitive industries; all wins are a team effort and require collaboration across industry participants, and football and banking each have a lasting impact in the community they serve,” he said.
Stolcke explained that Bank of America has a cautiously optimistic view of the current economic environment. On the positive side, forecasts suggest interest rates are starting to come down; financial services are growing, and institutions are investing in transaction banking provision, particularly around payments.
Yet on the other hand, banks must navigate the uncertainty – alongside the opportunity – that accompanies the advent of digital currencies and stablecoins which also requires significant investment; geopolitics as well as tariffs and rising inflation combined with other forces of uncertainty are making long-term planning challenging.
“Compared to 12 months ago, some of the uncertainty has stabilised, but it’s still hard to plan in the current environment,” said Stolcke.
Today’s evolving economic landscape means corporate treasury teams must ensure they are prepared for different scenarios. An ideal approach is to go “back to basics” by ensuring good visibility and control of cash, favouring strategies that maximise liquidity and focus on working capital management, said Davies. “In these kinds of environments, working capital management strategies should be top of mind,” he said.
But Davies said corporate treasurers are focused on areas outside cash management too. For example, cyber risk, once the sole domain of IT departments, has become a shared concern across the business. “Managing cyber risk is everyone’s responsibility because a company is only as strong as its weakest point – treasury teams now play an important role from a financial and operational perspective.”
He added that treasurers are also playing an integral part managing technological change to support the typically lean organisation. “There is a lot of opportunity to drive efficiency and leverage tools. Treasurers are focused on the outcomes they are trying to drive, and how technology, including AI, can help them achieve that.”
Another key area of focus for the bank is supporting clients hone and evolve their payments strategy, an area of specialism for Shonerd. “When we think about our payments strategy, it is deeply rooted in the needs of our clients.”
For example, she is focused on supporting clients unlock the added benefits of the new payment standard ISO 20022. “We have now moved to delivering value-add capability – we know that clean, validated structured data can reduce risk and increase speed as we move to real time payments,” she says.
Investment
The conversation turned to the role of investment powering and shaping the transaction banking industry in the coming years. At Bank of America, future investment is focused on creating resilience and meeting the needs of the regulatory environment, a complex undertaking for a bank that operates across 37 markets. The team will also continue to focus on customer innovation and developing services like real-time, cross-border payments as well as developing the new infrastructure to support digital currencies and assets across payments and custody. “It is an exciting marketplace to compete in and rewarding for global players who can leverage technology on a global field,” he said, in another nod to football.
The keys to innovation
Of course, innovation is also a key part of Bank of America’s strategy. But rather than “coming up with solutions looking for a problem” innovation at the global bank focuses on helping corporates solve existing, real-world challenges. “Companies want practical solutions to real world challenges they face today, rather than solutions for problems they may not necessarily have,” said Davies.
Cue an approach to innovation whereby ideas are fed into a framework by the teams that are closest to corporates on the ground and understand the operating challenges they face. “We try to ensure everything we do solves a problem, and if you use this as guiding mantra you are never going to go wrong,” he said, reiterating that the best way to ensure quality of advice, and that the solutions the bank provides truly meet clients’ needs in today’s uncertain and constantly evolving climate, is to stay close to clients.
“We have to make sure as we grow and scale the business, that we don’t lose that quality. We must keep pace with innovation and solutions; ensure the quality of the service we are providing to improve those solutions and never lose sight of solving clients’ needs.”
But the bank’s determination to innovate touches every function, even compliance, typically associated with risk management and due diligence, is an engine for reinvention and transformation, said Shonerd. She points to PIX, Brazil’s instant payment system, launched by the Central Bank of Brazil in November 2020 and now one of the most successful real-time payment systems in the world as a good example of innovation and compliance working together to let new ideas take hold. “This regulator-mandated instant payments scheme has also transformed the payments landscape and delivered financial inclusion. It’s a good example of compliance and innovation going hand in hand.”
Innovation, she continued, also feeds off collaboration. “Innovation can’t be done in a silo or as a solo endeavour. You need great collaboration because it requires different perspectives and sets of expertise to drive forward.”
Innovation also depends on skills, and the conversation turned to Bank of America’s efforts to support the next generation of talent both in-house, and amongst its corporate treasury clients. The transaction banking team recently held an event for university students to showcase a career in treasury. “Lots of students left with a positive impression about an area of finance they don’t traditionally consider,” recalled Davies. “The skill set for treasurers is also evolving. I hear treasurers asking: ‘do we hire people with finance acumen and teach them tech, or hire a tech expert and teach them financial acumen?’ Either way round, there is no easy answer. Some universities are starting to integrate those disciplines, and we are trying to do as much as we can to support this too.”
The conversation concluded with a quickfire wish list from panellists. For Stolcke, accelerated regulatory harmonisation between banks and non-banks is top of the list. Shonerd called for stronger relationships between clients and industry peers to focus on priorities and Davies beat the talent drum, calling for increased efforts to inspire and nurture the next generation of treasury leaders.
