Barclays is working with Oracle FS on a large scale Virtual Account Management (VAM) project in the UK.
Speaking at the recent Innovation in Cash Management and Payments event, the two parties explained the initiative.
The project aims to provide “more capabilities to businesses,” says Aubrey Hawes, senior director, Global Banking Solutions at Oracle FS.
“They’re looking for the agility to go back and set a sub-ledger or virtual accounts against their physical accounts, which makes it easier to go back and track the inflows and outflows of those accounts,” he explains. -he.
“They want to be able to go back and split logically around different currencies. One of the advantages that banks are getting into is the use of physical accounts that have an overhead aspect.
“With the management of these accounts as virtual accounts, it allows businesses to do this digitally, which will start to empower them and reduce operational costs.”
Hawes describes this capability as “a game changer” and believes that it “should become a major issue for corporate cash management in the future”.
David Shinkins, managing director, global head of cash management sales at Barclays, said the bank aims to reduce cash and banking costs for its customers while streamlining operational activity.
VAM provides treasurers with real-time insight into their cash positions, enabling accurate and fast reconciliation, he notes.
He also points to other benefits such as streamlining accounts, “potentially down to the currency level,” and an opportunity to gain valuable insights from payment and receivables data.
Shinkins explains, “This can be both at the macro level of the physical account but also at the granular level of each virtual account; these, in turn, can then be assigned to an individual customer or supplier, for example. »
VAM’s self-service capabilities eliminate manual processes and improve traditional bank account management, he says.
“New accounts and entities can be created in real time by the organization on demand, and visualization tools can display virtual account structures, overlaid with real-time balance information.
“Reconciliation is highly automated and collections in particular benefit from the use of individual addressable virtual account numbers.”
The VAM platform removes inefficiencies from the back-end operating model, he says.
“Our role as a provider of core banking services is to support our customers on their journey of cash transformation.”
FinTech future understands that the deal was signed about a year ago and will likely be extended to Barclays’ business outside the UK as well in due course.