Barclays and Oracle FS team up for virtual account management project
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 expounded on the initiative.
The project aims to deliver “more capability to corporates”, says Aubrey Hawes, senior director, global banking solutions at Oracle FS.
“They’re looking for agility to go back and define a sub-ledger or virtual accounts against their physical accounts which makes it easier to go back and track the inflows and outflows out of those accounts,” he explains.
“They want the ability to go back and logically divide around different currencies. One of the benefits that the banks are getting into is using physical accounts which has an overhead aspect.
“With managing these accounts as virtual accounts, it allows corporates to do that digitally which will start to put power back into their hands and reduce operational costs.”
Hawes describes this capability as “a game-changer” and believes it “should become table stakes for corporate cash management moving forward”.
David Shinkins, managing director, global head cash management sales at Barclays, says the bank aims to lower treasury and banking costs to its clients and at the same time streamline operational activity.
VAM provides treasurers with real-time insight into their cash positions, enabling accurate and timely reconciliation, he notes.
He also highlights other benefits such as account rationalisation, “potentially down to the currency level”, and an opportunity to gain valuable insights from the payments and receivables data.
Shinkins explains: “This can be both at the macro level in the physical account but also at the granular level of each virtual account; these, in turn, can then be assigned to an individual client or supplier, for example.”
VAM’s self-service capabilities remove the manual processes and improve traditional bank account management, he says.
“New accounts and entities can be created in real-time by the organisation on demand and visualisation tools can show the virtual account structures, overlaid with real-time balance information.
“Reconciliation is highly automated and collections in particular benefit from using individual addressable virtual account numbers.”
The VAM platform removes inefficiencies in the back-end operating model, he says.
“Our role as a core banking provider is to support our clients on their treasury transformation journey.”
FinTech Futures understands the deal was signed a year or so ago, and is likely to be rolled out to Barclays’ business outside the UK, too, in due course.