Automation in corporate payment workflows
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Ali Curi: Treasury ConversatION is an ION podcast where we discuss topics of importance with CFOs, group treasurers, and treasurers. Join us as we explore critical topics with industry leaders, product owners, and subject matter experts providing insights and strategies tailored to the dynamic world of treasury management.

Hi everyone, and welcome to Treasury ConversatION. I'm Ali Curi. In today's episode, I'm joined by John Kennedy from ION Treasury to talk about how treasurers are rethinking payments. We'll cover how automation, real-time insights and fraud detection are helping turn payments from a back-office task into a more strategic data-driven function.

There's a lot to discuss, so let's get started.

John Kennedy, welcome to the podcast.

John Kennedy: Thanks so much for having me, Ali. I'm really excited to be here.

Ali Curi: John, before we get to our conversation, let's learn a little bit about you. Tell us about your background. What is your current role and responsibilities at ION?

John Kennedy: I'm a solutions consultant at ION Treasury, so I work across our midmarket products and my role essentially involves working closely with both prospective and existing clients to demonstrate our product capabilities, answer functional questions they have, and help them actually optimize their treasury operation.

I've been with ION just over a year now. And prior to that I worked in Dublin also as a solutions consultant. So I've actually had some good experience and been involved in projects where treasurers is actually transitioning from manual processes to automated ones, so I'm really just excited to discuss it today.

Ali Curi: Well, we're excited that you're here. Let's begin with the big picture. What are the core building blocks behind modern payment automation? 

John Kennedy: It's a great place to start. So I think at the heart of any payment automation process is the payment processing engine; your ERP systems, any treasury management systems or any core finance systems.

And what these systems typically do is the heavy lifting for you. So it's where you can start your payment creation, route them for approval, and actually then execute the payments. So in the past, what we've seen, and it's actually still going on today, is treasurers actually entering these payments in manually.

Now, this can cause really slow processes. It's quite risky as well, because errors actually creep in. Now what these engines automate, is all those steps for you. Makes the payments faster and actually less error prone. So I think that's pretty much the step one in starting off this payment processing. Then you have your connection to the banks.

Now, this might sound quite straightforward, but it actually can be really complex. Most modern treasury systems connect to the banks through multiple different ways, but typically the ones that we see will be through channels like Swift, but more increasingly through APIs. Now, my opinion, APIs are a huge game changer because they enable that real time communication. But treasury teams aren't gonna have to wait hours or even sometimes days to confirm whether the payment's gone through. They get that update instantly.

Another crucial part I see is workflow automation. And what this is all about is actually setting up clear approval paths so payments don't get stuck waiting on someone else's manual sign off. So for example, if a payment's below a certain amount, it might only need one manager's approval, but bigger transactions could require multiple sign-offs. So automating this keeps the payments moving without actually losing that control. So tying all this together, none of this would actually be complete without good reporting and analytics, kind of the core of any treasury management system or treasury system in itself.

So things like real time dashboards, give treasury teams a clear view of their payments in flight, their cash balances, and any potential issues. So instead of waiting, for example, an end of day static report, they see everything as it happens. And lastly, what's really, really important for the building blocks of this payments automation is through system integration.

Treasury systems rarely stand alone. So for example, a TMS needs to connect to an ERP, also to an accounting platform, maybe a vendor portal, and banks as we talked about, and that integration ensures that data flows smoothly between these platforms. So a payment approved and treasury system also updates the accounting records also updates the ERP, and this is all automatic, so it cuts down and reduces errors and just makes the whole process smooth very easily. 

Ali Curi: Now, speaking of integration, how do treasury teams bridge the gap of integrating payment automation with existing ERP and legacy systems?

John Kennedy: Integration can definitely be tricky. From that regard, treasury teams really need to be creative. As we just discussed, one of the more newer approaches is using APIs to connect with these systems. So as we discussed, APIs allow systems to exchange that data instantly. So when a payment is approved, all the rest of the systems and the third party integrations that they need are also updated right away.

So, cuts down delays, cuts down errors, straight away. But the problem sometimes with APIs is that some legacy systems on the market don't support modern APIs. In those cases, that's where middleware comes into play, and middleware is sort of like a translator, sits between the old systems and the new systems and converts that data into formats so that each site can understand. That way, if your ERP system is on older architecture and your treasury systems are newer, they can still talk. One of the more important aspects that is kind of overlooked as well from an integrations perspective, is the data mapping. So you need to make sure that data fields match across systems so information doesn't get lost or misinterpreted.

That might mean transforming dates, for example, payment amounts or account numbers to that right format. It can be quite detailed and a tedious process, but it's what keeps the whole system running smoothly. 

Ali Curi: That integration seems crucial, not just for automation, but also for visibility. What are some best practices you're seeing around real-time payment monitoring?

John Kennedy: Yeah, visibility is absolutely key, especially now that payments are happening faster than ever. One big thing I see working well, is giving treasury teams access to realtime dashboards. Now, we did discuss this previously, but imagine having a live screen showing every payment status from initiation through to approval, through to final settlement happening in real time.

This kind of transparency means that treasurers can spot delays, for example; failures to payments, rather than finding out in hours and days, they find out quite fast. Along with these dashboards, one of the big thing that we're seeing is automated alerts, and these are real life-savers to treasurers. These alerts can ping treasury teams as soon as anything important happens.

So take an example that a payment has failed, for example, or something needs to be approved really, really quickly. An alert can be sent to any treasury team, maybe via mobile phone or even via email, and that means treasury teams can jump on these issues rather than spending time digging through certain reports.

Another smart tool that I see, and not just for payments, but for treasury as a whole, is through cashflow forecasting. So using historical payment patterns, cash movements, these forecasting tools really help treasurers predict when money will be coming in or going out. And what this is really good for is planning, you know, avoiding shortfalls, avoiding overdrafts, and optimizing that working capital.

One other thing I wanna talk about as well, and that we've kind of discussed that, is that direct bank integration as well. So when treasury systems are talking directly to the banks in real time, that's when the instant updates on the account balances and the transactions will kick in. And that's really what it's all about.

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Ali Curi: Well, and as payments accelerate, risk also grows. How can automation help reduce payment fraud and manage risk more effectively? 

John Kennedy: It's something we see all the time. Faster payments definitely mean you have less time to catch any bad actors or mistakes, so security has to be baked into the whole process.

And automation plays a huge role here by embedding them controls directly into your workflows. So for starters, multifactor identification, so MFA is essential. So when a payment is actually approved, a person approving it can identify and prove it's their identity in multiple ways, such as a password plus a code sent to your phone.

It keeps payments from being approved from someone who's not actually supposed to approve it. Another big tool we see is anomaly detection by machine learning. What these smart systems can do, and they're embedded in a lot of treasury systems at the moment, is look at payment data to learn what's actually normal.

So who initiates the payment? What are the typical amounts to see? Timing is a big one because say for example, a payment is tried to go through at 3, 4, 5, 6 o'clock in the morning, that's kind of suspicious. So if something does look off, like the examples I just showed, the system's gonna flag that for review. So it's kind of a AI driven monitoring that can catch any of these fraud attempts.

Another big item I see is role-based access. So what you can do from this regard is limit anyone who can see or approve certain payments based on the role in that company. That way, again, you can minimize the chance of someone accidentally or unintentionally approving a payment that they shouldn't.

And finally, again, that's really, really big across treasury systems is audit trails. And audit trails really give you a detailed record of every action that's been taken on that payment. So from who created it, to who approved it, and when. And what this allows treasury teams to do is investigate the issues and comply with regulations as well.

Ali Curi: Now, let's talk about cross-border payments because they always seem like a challenge. How are clients addressing challenges and what are some solutions? 

John Kennedy: Cross-border payments are definitely more complex than domestic ones, and that complexity has a big impact on treasury teams. For one, every country has its own regulation and compliance rules, which means that companies need to be careful because they will get put down the rabbit hole of fines, of delays. They we need to manage that.

Currency conversion is another headache. Exchange rates fluctuate, of course, constantly. And managing that risk is quite tricky. You don't wanna be losing money because of a sudden unfavorable rate. Another issue we see is timing. Payments across time zones, across banking holidays, so then settlements can take longer and can be quite unpredictable.

There's a few things treasurers can do to manage these challenges. Centralizing their payments is one thing, so consolidating their cross-border payments into one specific place rather than handling them across regions makes things much more simpler, and as well as that, it reduced costs. Many organizations also use foreign exchange tools as well, so they can lock in specific rates and hedge that currency exposure to manage their volatility.

Last thing I want to talk about from this regard is from the messaging formats, especially with the new ISO 20022, this is actually going to help reduce errors and speed up processing across borders if you have them standardized formats across the board. 

Ali Curi: So now let's also talk about AI. How are machine learning and smart automation changing the game when it comes to payment workflows?

John Kennedy: Changing the game it is. AI and smart automation is really important for treasurers at the moment. As we've typically discussed, the outlier detection is quite big at the moment, so AI models trained to understand normal behavior and then highlight them, them discrepancies. What I'm also seeing is predictive analysis and it's quite a really, really useful area that treasurers can use from an AI perspective.

So what this does is it really helps treasurers plan better and avoid surprises like unexpected cash shortfalls, for example. What the AI model is typically trained to do is analyze past payment and cashflow data and it can forecast them payments to say, okay, 'When is it likely to be made?" Or, "Where is cash actually tight?"

So all in all, AI really helps treasury teams move from being reactive to just pointing out fires. To being proactive, so strategically managing their payments with confidence. 

Ali Curi: Now, you mentioned ISO 20022, that is something we've discussed on the podcast before, but as a refresher, briefly share with us why it's important and how companies should prepare and what advantages ISO 2022 brings to payment automation.

John Kennedy: ISO 20022 is basically the new global language for payments. So unlike older messaging formats, it carries more richer and more structured data, which means that payments can include more detailed information that's used for reconciliation, used for compliance and analytics. So to get ready for ISO 20022, companies first need to assess their current payment systems.

Many still rely on the old Swift MT messaging that aren't maybe as compliant as ISO 20022. So investing in flexible systems that can handle both the new and the old formats during this transition is crucial. Automated mapping tools are also very, very helpful. So what they can do is translate that data between the formats and making that switch much more smoother. Again, like everything, if you're implementing say, an ERP system or a treasury system, testing is a big part of this and it's really, really good for preparation. What companies can actually do is build environments where they can simulate for the ISO 20022 messages to catch any issues before they go live.

And as well as that, and kind of ties into that preparation, is aligning with a clear transition roadmap that involves your IT team, your treasury team, your vendors and any compliance teams that you have as well. But the benefits from having all of this is significant. With this richer data, reconciliation becomes faster, much more accurate. Which again, saves time and reduces any errors.

That global compatibility improves your cross-border payments that we talked about, so everyone is really speaking the same language. It's a big change, but it's really an investment that pays off in efficiency and control.

Ali Curi: So, John, where does it all go from here? What's next for treasurers and payment automation?

John Kennedy: Great questions. I think the future is all about agility, integration and intelligence. I see treasurers pushing for even tighter alignment with their ERP, TMS and core finance systems, and having that tightness within these systems allows you to reduce that friction and ensure that data consistency is across the board. There's gonna be no more siloed systems.

As we spoke about what API connectivity, real-time capabilities will become the norm. So as instant payments become more widespread, treasury teams will need to be able to handle these settlement cycles with specific tools and real-time cash positioning. So this means that decisions can actually be made up to the second on that data rather than having outdated snapshots.

Talking about ISO 20022, standardization will continue to grow. Making cross-border payments and compliance much more easier, as we talked about. And finally, I think with every single process in treasury risk and compliance, automation will also take center stage. Treasury teams will and always are increasingly using automation to handle sanction screenings, fraud detection, audit readiness, and they're always responding to regulatory demands without trying to balloon costs.

So in short, I think treasury will become an even more strategic partner, empowered by technology to drive that efficiency, reduce the risk, and support business growth. 

Ali Curi: John, you have shared a lot today around modernizing payments. I'm certain there's a lot more things we can discuss, but for now, what's the one big thing you hope listeners will take away from this episode?

John Kennedy: If I had to boil it down to one big idea is that payments have evolved way beyond than just being a back office operational task. They become much more of a strategic asset for any business. So when treasury teams embrace automation and integration, not just for speed, but for smarter control and real time visibility, they unlock a whole new level of efficiency and risk management.

This means treasury can move from being reactive to problems, to actually driving business agility and growth. Obviously, in today's fast-paced financial world, modernizing payments isn't just a nice to have anymore. It's foundational to being and staying competitive and being resilient. So my message is, don't wait, start your journey now. Every improvement compounds and puts you ahead. 

Ali Curi: Now, one bonus question, a bit of a sidebar. What's an important lesson you've learned in your career so far that others can learn from? 

John Kennedy: I'd say the biggest lesson I've learned is about the power of truly listening. So again, it sounds kind of straightforward, but in a world full of technology buzz, quick fixes, it's very easy to jump straight to solutions without fully understanding what the client needs or what the business actually really needs.

So taking the time to listen deeply, to understand pain points, their goals, or even sometimes their hesitations, really makes all the difference. It can really help you design and recommend solutions that actually work for the people using them, not just what looks good on paper. Plus, and always a bonus, it builds trust and stronger partnerships.

So if there's one piece of advice I give is, listen as much as you can. It pays off in more ways that you can actually predict. 

Ali Curi: Well, I think that is some great advice. John Kennedy, thank you for joining me today and sharing your insights. Let's do it again soon.

John Kennedy: Ali, it's been an absolute pleasure. Thank you. 

Ali Curi: And that's our episode for today. You can follow ION Treasury on X and on LinkedIn. Thank you for joining us.