Will Real-Time Analytics Reshape the Future of Financial Data?

The growing adoption of real-time analytics is affecting nearly every aspect of banking and payments.

“If you don’t know where your money is, you can’t make good financial decisions,” said Koji Murase, senior product manager of ledgers at Modern Treasury.

For large companies with sprawling financial data — where critical information about business operations and transactions is spread across multiple systems — combining disparate but related data points into actionable analysis is often difficult.

According to Murase, the impacts of data sprawl are widespread. For example, he said, most companies work with multiple banks resulting in multiple bank statements and varied file formats, all of which makes converting data into insights very difficult.

“But even worse than that, what we see with a lot of companies is that they [also] have multiple systems to initiate payments,” he said.

Not only does data sprawl take up a lot of time, Modern Treasury’s Murase said, but it can also monopolize human resources as teams manage payment processors, billing systems, invoicing, ERPs and more. While there are many payment products that unify payment flows, companies are now dealing with the “fallout” of using multiple products across multiple sources.

Because many companies don’t have a unified data store, he said, they have no central source of truth, which, in turn, also compounds their workflow automation efforts.

Insight Accuracy

Bottom line: businesses that do not have access to real-time data may make decisions based on out-of-date or even wholly inaccurate information, Murase said.

The time spent attempting to gain true visibility from multiple systems, as well as the human resources required to manage reconciliation, complicate things further, he said.

According to Murase, a lack of workflow automation may have a chilling effect on payments efficiency.

“CEOs can talk a lot about the promise of moving money instantly, but the reality right now is that a lot of companies [can’t] make real-time decisions about their finances,” Murase said, before pointing to the disconnect that exists for companies that want to execute payments in real time but can’t make decisions about their own money in real time.

For Murase, the future of finance is connected to workflow automation, which begins with real-time reconciliation, noting that there are still technical challenges involved in going from analog to automated workflows.

For example, many tech solutions don’t have the ability to integrate deeply with bank feeds and make sense of transactions, Murase said, while many others cannot offer webhook API access to clients, or lack the ability to draw critical data together into a single location — a problem he said a specialized ledger database corrects.

Streamlining and Innovation

As Murase sees it, a ledger database has all of the benefits of a typical ERP or accounting system, but is also coupled with an API that can be used in real time and queried automatically. The resulting centralized database makes real-time access to — and insights from — this consolidated ledger available to the entire organization.

“Even if you’re not a traditional FinTech company, you really can’t miss the boat on this one,” he said, noting the surge of traditional enterprise companies he sees being pushed by their shareholders to launch payments products to stay competitive.

“It’s maybe one of the most effective ways that you can verticalize your product to get access to the end user through their payments flow but also capture margin,” he said.

In short, he said the engine behind these future innovations is access to real-time data.

“[There is] a huge opportunity of powering high-margin embedded payments and products, and what we’ve seen at Modern Treasury with the companies that we work with [is that the] best leaders are thinking about both of these factors and how to grow their businesses,” Murase said.