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Citi Perspectives for the Public Sector
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2015 – 2016
37
Going digital
The truth is that any business, whether it
operates for-profit or not-for-profit, can
improve the use of constrained financial
resources and enhance cash flows by replacing
time-consuming, outdated manual and
paper-intensive activities with more efficient
electronic processes and systems.
Among well-run organizations of all types and
sizes, electronic banking systems and payment
services have become commonplace because
of the strategic and operational advantages
they spawn. Generally speaking, non-profits
have been a little slower than for-profit entities
to take on the task of transforming familiar,
yet inefficient, ways of doing things. However,
“bridgers” within their ranks, industry forums
that highlight success stories and best
practices, and technology-savvy donors can
provide needed catalysts for change; so can
banking partners.
The tools that are frequently cited for making
the leap include cross-border electronic
payments systems that streamline the
authorization and transmission of payments to
local currency accounts practically anywhere in
the world. Such systems can be used to initiate
various types of payments including checks,
cross-border ACH and funds transfers such
as mobile payments. These systems help rein
in transaction processing costs, but also can
drive down foreign exchange costs by providing
access to competitive FX rates, aggregation
of FX purchases, and reduction of FX and
counterparty risks. For organizations that make
a large number of payments to multiple local
agencies and projects around the world, the
financial and administrative advantages can add
up quickly.
Electronic transaction initiation and information
reporting systems have revolutionized how
organizations manage their funds. In addition
to providing a platform for managing payments,
electronic banking platforms can generate more
timely and accurate details of cash balances and
transactions, and typically include the added
advantage of aggregating information across
multiple accounts and regions.
Technology-based account management also
opens up opportunities to create direct links to
donors, particularly large donors who serve as
program partners, providing them with real-
time reporting and greater transparency into
how their funds are being used.
While there is no single solution to the complex
cash management challenges that NGOs and
non-profits face, learning from the successes
of other organizations and working with an
experienced banking provider can lead to
enhanced stakeholder confidence and free up
additional funds for front-line activities.
The tools that are frequently cited for making
the leap include cross-border electronic
payments systems that streamline the
authorization and transmission of payments to
local currency accounts practically anywhere
in the world.