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Podcast with Lia Cao

KAREN: Hey, Lia, thanks so much for taking the time to chat with me today. I'm looking forward to this discussion, continuing our series with JP Morgan on the digital transformation of treasury. Thanks again for making the time.

LIA: Yes, thank you for having me, Karen.

KAREN: So, let's start with, perhaps, the basics, although it's kind of a complicated basics. So, corporate treasurers are really trying to balance a number of different perhaps conflicting priorities. They're being asked to reduce costs-- who isn't, right? Improve profits, seems like that's another given. But at the same time, optimizing the banking relationships as a way to do both, cutting costs and improving the profits. And so I guess the way I'd like to start the conversation is, what are the available tools and technologies that treasurers have available to them to actually do that?

LIA: Yeah, absolutely, great question. And I absolutely agree with you that we're seeing our treasury clients highlighting the pressure they're under to operate more efficiently and add value with their expanded role, but oftentimes with fewer resources, and all the while navigating through regulatory changes and geopolitical risk. So, there are range of solutions and tools to help them achieve these goals.

For example, there's always longstanding goals for the Treasury Department to be more efficient to reduce the number of counts, which often means reducing fees. We're better at centralizing control within optimizing cash buffers. Right now, we have these new levers, such as virtual accounts that can really help rationalizing accounts, and at the same time, give more flexibility and visibility of accounts across the globe, across their enterprise.

And also, you mentioned their focus on not only just reducing fees, but also improving visibility and profitability. And we see there are also more and more usage of tools, such as having a holistic view of the payments value chain end to end. So, things like FX transparency on the pay-in and pay-out front, and tools like FX API can really give the treasurers the tool set and the flexibility of thinking about how they manage the risk management perspective of FX holistically. So I think there are more new digital tools available for treasurers to manage these demands. And then also the open banking push makes more tools and interfaces available for them to see the end to end processes.

KAREN: Let's pull back a little bit on all that you said. And I agree that there are certainly a lot of things available, but how does a how does a corporate treasurer decide what's appropriate, and then how to integrate that into their existing process and workflow? I mean, that seems like, particularly for these large these large enterprises, to be something that could potentially get pretty complicated.

LIA: Yeah, absolutely. I think you're absolutely spot on. I think the payments landscape is getting more and more complicated. I think two things-- one is corporate treasurers really need to think hard about their objectives and how to line against the different players with strength to their objectives. For example, global banks, like ourselves, they really provide the global reach, the scale, the security of the solutions for them. And on the other hand, the fintechs are a great source of solution for perhaps very niche, very targeted solution, with great user experience.

And I think they should think about what are the issues they're trying to solve. And then, what's the best to provide, or best solutions for addressing those challenges. And sometimes, it could be the combination of the two, best of both worlds, which we're investing heavily in as well, kind of the partnership between banks and fintech, so that they can have the best of both worlds. I think for the complexity point, we always take the view that it's a really-- we love to be a trusted advisor for our clients. We would love to be the layer to really reduce and simplify that complexity for our clients, and it's on us to help them simplify and streamline in this very complicated world.

KAREN: As you're thinking about that role and delivering on that objective for your clients, where do you identify the areas of greatest need? Certainly, it will perhaps change slightly from enterprise to enterprise, but are there fundamental things where you see the transformation of treasury using digital tools and techniques to be most valuable and, therefore, most foundational to then moving beyond that to do more things?

LIA: Yes, absolutely. I think, really, it's very fascinating [INAUDIBLE] treasury work. The company's going through-- many, many industries are going through a transformation. And therefore, the treasury's role is also going through a transformation. And we see digital solutions adding value almost across the board. And really, these solutions are elevating treasury from a more efficient treasury, being able to manage things day to day, to a more strategic business partner that plays a very critical role in supporting the business strategy and in navigating through the digital transformation of industry.

And specifically, I think for the digital solutions, how it impacts treasury, we see it three themes, major themes. One is around automation. There are digital solutions that make it easy for treasurers to do what they do. For example, instead of manually consolidating balances globally, they can now leverage APIs to provide on-demand and real-time balances, which will free up time for them to more focus on managing liquidity [INAUDIBLE].

The second theme we see of digital tools, solutions, is around digitally delivering value added services through digital channels. For example, we've talked a little bit about the virtual account. I think that's a great digital tool for treasurers to exit costly physical accounts, but still get all the benefit of the visibility of account, of the control.

Another example of the value added services is the cash flow forecasting. Right now, using digital dashboard, leveraging the big data, to look at all the payments flow through our pipes, $5 trillion a day, and using machine learning, for example, to really do pattern recognition, and discovery, and for an example project what the cash flow may look like, based on the historical pattern.

And lastly, but not least, we see digital solutions really delivering global capabilities locally. I think this is a very important point, because our clients are global clients. They're growing internationally. And different countries have different regulatory requirements, documentation requirements. So, we are-- I think that the banking industry as a whole, particularly at JP Morgan, we're tracking very heavily local digital solutions.

For example, in India, we have the virtual branch solution which is completely virtualized end to end suite of solutions for cross-border import and exports integrated without our electronic banking platform. And last year, we also rolled out in China a very specific digital solution. I call it e-custom, which is an innovative solution for cross-border payments in partnership with the Shanghai custom authorities. So, you'll see more and more of those, I think more digital tools, but tailored to local markets.

KAREN: Lia, you talked about four things-- automation, digitally delivering solutions, cash flow forecasting, and then global implementing or acting locally. Where do you see some of the biggest deficiencies, therefore the biggest opportunities, for either partnerships or solutions to be developed to fill the gap?

LIA: Yes, so, I think it varies from company to company.


I think also, like each company is a different journey in their digital transformation. So, I think the efficiency, which is really company specific, there are companies at the beginning and early stages of the transformation. Therefore, we see more opportunity using digital tools for automation, streamlining processes, get rid of manual processes. And there are companies who are more further down the road. Like they have already implemented new ERP systems and whatnot. Therefore, we see more of value add, like digital tools. They're looking more for digital tools.

And then you have companies who are on the more cutting edge. They're thinking about the next generation digital solution. It could be point solution, could be even a game changer, like infrastructure changes. And that's where we partner and we invest in the blockchain, for example, our information network, and really rethinking, thinking about a new way of moving information, new way of moving money cross-border. So, I think I would say, really across the board, we see efficiencies and with the opportunities to help our clients with digital solutions.

KAREN: Lia, you mentioned open banking as a trigger. Dig into that a little bit more with me. Is that on the API fintech side in order to enable some of this digital transformation to happen? Or on the readiness side for corporates to understand how fintechs won access to data, or both?

LIA: Great question. I think it's a little of both. I think the bigger backdrop is that open banking is both a regulatory push, like in Europe. It's a regulatory push, and also a bottom up demand. Our clients are asking also for the banks to be open. And so that there are other interfaces and fintechs have access to the banking infrastructure. So, I think it's both a top down and a bottom up movement.

I think that's great for our client experience, and it's also good push for the banks, to be kind of a more open ecosystem and integrate with the fintechs. So, I think there are nuances in different solutions. I think API is a great example, you mentioned. We are investing very heavily, so that our clients can have that experience. They don't have to log into a banking portal.


They can, just using their own TMS or ERP system, they can call the API and we can integrate into their portal. We bring our services to them.


So, that's a form of open banking. And with the fintechs, yes, access to the banking portal, access data, I think it's more how do we integrate fintechs and welcome them to our ecosystem, so we bring the best solution for our clients. And we're quite open. I think that's a pretty big change for the banking industry.


Previously, we would prefer to build everything in house. We would own end to end, we have visibility end to end. But that's too slow.


The speed to market is key. And now we're really building an open ecosystem with the fintechs. And we'll decide if it's our core competency, we think we have a great competitive advantage, we'll build it in house, continue to build in house.


If we think fintech has a great solution, which would help us with speed to market, at the speed of relevance, then we will partner with them, absolutely. And then when there are already fintechs that have unique solutions, and we think there's a unique synergy with our offering, we're invest or we'll acquire them, like we did with WePay in the market [INAUDIBLE] space and with Infonet. So I think it's a very open ecosystem, open mindset. And the ultimate goal is to deliver the best solution to our clients.

KAREN: So when treasurers are looking for things to help either explore digital tools, automation, improve the various things that they're doing around cash flow forecasting, and there are a portfolio of fintechs who may have elements of that capability, do they look to you to bring them a subset of the best of breed? How does that actually work in helping to create a solution for corporate that you're also confident can really help them and the area of need where they feel they need to add more capability?

LIA: Yeah. [INAUDIBLE] I think about the exact same question, as well. It's a great question. I think our clients really want the best solution. All else equal, I would think that clients, many clients actually told us so, that they would much prefer working with a global bank.


So, I think that's why we-- I think by partnering with fintechs, we can bring the best solutions to them. But while, at the same time, have the global reach, have the global coverage, and also the security, front and center. Like the data privacy, the cybersecurity, the fraud prevention, those are top of mind issues for our clients.


And by having a partnership between a bank, a large bank with fintechs, clients have more trust. They're more confident in that interaction, in that counterparty being a bank. And we would absolutely-- we have hundreds of discussions with the fintechs. And we pick the best one to partner. And we have certain standards. Many fintech partners have also told us that we make them better as well, because we have pretty rigorous processes through our party due diligence and make sure they meet our standards to be part of the solution. So I think in that process, we also help make them better. And they make us better, as a fintech, their solutions also enhance our value proposition. I view this as a win-win situation. I think it brings benefits to our clients, like the peace of mind as kind of a partnership solution.

KAREN: It makes sense to me, particularly since you have such an intimate knowledge of what the corporate treasurers environment is, what their needs are, the dynamics of the business. And therefore, I think you're in the best position to provide that kind of guidance and advice. And you've got also the trust of the corporate treasurer as well. So, I think all those things really become important to shaping the solution.

When it comes right down to saying, all right, this is the solution that we need to accommodate this particular part of your organization or to complete a capability that you don't have, what then happens? How do you actually mobilize the implementation of that? How do you get corporates over the hump, the hurdles, that inevitably get in the way of getting things done?

LIA: And for that, that is one of the key challenges for a lot of the clients who are on the journey of digital transformation, is the capacity constraints, [INAUDIBLE]. Our view is that we want to make that as easy as possible to our clients. We want to take a lot of the burden on ourselves, either be it-- one way to do it, can we get into their ecosystem? Like, we did the integration with a lot of the TMS, Treasury Manager Systems, so that they clients don't have to do a lot of the heavy lifting. They can [INAUDIBLE] through our APIs and reading corporate, all these capabilities to their own ecosystem environment.

And second is, across our wholesale payments business, we are standardizing our APIs so the clients don't have to do multiple integration, even with our own API. So we have [INAUDIBLE] on the front end. We have a payment capabilities, real-time payments.


LIA: We are looking at that API gateway, if you will, or API stores as one standard uniform store, so clients don't have to do too many integrations. One example, for example, the real-time payments API, we're the first bank to-- I think we're the only bank that's live with real-time payments in the US, in SEPA region, SEPA Instant, and in the UK. And that the API is reusable. PayPal, that's public information that PayPal implemented RTP with us in the US.


LIA: That API set is 70% reusable for the SEPA instant implementation. That will save clients a lot of time, just to have the scale, and have the re-usability of these interfaces for implementation. So, I think we have to think about all these ways to alleviate the burden on the corporate treasurers, and also help them speed up the whole digital transformation journey.

KAREN: I'm curious to get your take on whether you anticipate priorities around the solution shopping that the corporates are doing, perhaps on all these different dimensions, given what's going on in the world today with the impact of the virus on the global economy. I would think that perhaps cash flow forecasting and getting out are a really strong handle on that might rise to the top, particularly using AI to model events that perhaps we haven't seen in a very long time, certainly on a global basis. Are you sensing any of those shifts? Or are those conversations active today between corporates and the bank?

LIA: Very, very active. I think cash flow forecasting is one example of I would say a broad set of topics around insights, value added insights, and data driven insights. And that, we definitely see a very, very strong demand from our clients. And that's where you can see that, I think, the perfect combination of scale. Scale matters, how much data flowing through our pipes. And we have visibility on the client and their suppliers, and their sellers, their vendors, or their customers.

So I think it's that network effect that can deliver a lot of the raw data. Data is a new oil, the raw data set. Then you need infrastructure to be able to analyze that data, utilizing machine learning or AI to really distill the patterns, the insights. And that's where we're also investing heavily to be able to offer it. And the cash flow forecasting, that's one of the examples, and there are many other examples of this just building that insights for clients. And that has tremendous value.

And then the third one, I think we see more and more of, is also like looking forward. Business models are changing across almost all industries. And our clients are asking a lot of questions of what does it mean for me, what are the implications if I adopt a subscription model, if I adopt a pay as you go type of business model, if I go direct to consumers, what are all the implications on my payment flow. If I'm real-time on the front end, how do I think about the back end, the reconciliation. So we see more and more of those questions as well that are also coming up very often. And I think those are also kind of insights we can draw from all these digital tools and based on a lot of the payments data that we have.

KAREN: As we bring the conversation to a close, I'm curious to get your thoughts on how all these things influence your strategy for enabling the digital transformation of treasury. As you process all of the insights from all the data that you have running through your pipes, as you as you describe, and all the relationships you have, you obviously have so much access to so many different insights. How do you align your roadmap with some of the higher priority items on that? You obviously have to be flexible and fluid, I know. But I'm just curious to get your thoughts on how you're aligning your objectives with those of the corporates.

LIA: We're aligning it from two dimensions. One is I think given the very dynamic nature, and the challenges, and opportunities that corporate treasurers are facing, they have problems here and now. So we're investing very, very heavily in the solutions to really help address those pain points or opportunities here and now. Those are the things, we're modernizing our global platforms, we're bringing a lot of the value added tools, like [INAUDIBLE] like data and analytics to help our clients solve their problems.

And for that category, I think we're very, very focused on how do we deliver a unique value proposition, leveraging all the assets we have on the wholesale payments, which is quite unique. I think we're probably the only global bank that has all these assets under one roof end to end, pay-in, [INAUDIBLE] acquiring to pay out, liquidity management to FX franchise. So I think that's one.

The other one I think is really important is looking forward to the horizon, to the future. The future's very uncertain. I think now, more than ever, that clients are looking for a strategic partner as they go into the future. And many of the industries are changing, really adopting new business models. Those are uncharted waters for our clients.

I think having a strategic partner, someone to keep them company on that journey, and really brainstorm ideas, and bounce off ideas, and really help them think about all the dimensions and make sure that they don't have any blind spots, and think about all the implications of what a new business model means for the payments infrastructure, the liquidity infrastructure, I think that is also-- we invest very heavily in solutions there to be able to be the partner for the future and to future proof them. So I think I see we're investing in both, here and now, and the future, to be relevant and to be strategic to our clients.

KAREN: What's the one word of advice that you give to all corporate treasurers as they contemplate their digital transformation?

LIA: I think it's really to think about themselves as a very strategic partner to the CEOs and the CFOs. In that lens, through the digital transformation journey, then put position to what's their vision and, therefore, what are all the issues, and problems, and opportunities they're trying to tackle in that digital transformation lens. Thinking broadly, and then that will lend them to a very more tangible objective.

KAREN: I once introduced the corporate treasurer of a very large Fortune 500 company as the most important person in the company, because they really are the only people who know where the cash is. I think that's probably pretty true. It's like these are the guys who know where the money is, and when it's coming in, and when it needs to go out. So, I think you're right about the appreciation for the strategic nature of the corporate treasurer today. And now, the availability of so many new technologies to help them do their job more accurately with more precision, of course. Because if they are the people who know where the cash is, they better have the right answer at the right time, no matter who's asking.

LIA: Yes. Yes, absolutely. Business is moving towards real time, on-demand nature. I think corporate treasurer absolutely plays a more and more important role to make sure that that can be supported.

KAREN: Absolutely. Well, listen, Lia, what a great conversation. I really enjoyed it. And I appreciate all of your great insights. Thanks, and I hope we can do again soon.

LIA: Thank you, thank you, thank you for having me.

KAREN: Bye-bye now, thank you. 

How Automation, Digital Channels and Global Solutions Are Transforming Corporate Treasury. Digital Transformation of Treasury.


  • Corporate treasury departments are in the midst of a digital transformation, which has elevated the treasurer’s role to become more of a forward-thinking, strategic business partner. Treasurers are looking to digital solutions to improve profitability, reduce fees and manage rising demands – all with fewer resources.
  • Top themes emerging from a corporate treasurer’s digital to-do list include: reducing repetition and error with automation; improving efficiency and delivering value-added services through enhanced digital channels whether online, mobile or host-to-host; and making international payments as easily as domestic.
  • Faced with a multitude of digital solutions, corporate treasurers are looking to bank-fintech collaborations, which provide the best of both worlds to develop more secure, targeted, niche solutions on a global scale.
  • J.P. Morgan partners with businesses to help vet strategic initiatives along their digital journey—whether it’s adopting new business or payment models, or other areas of uncharted territory.


Lia Cao

Global Co-Head of Corporate and E-commerce Sales & Solutions

Lia Cao is a Managing Director and the Head of Wholesale Payments Solutions within the firm's Wholesale Payments business. Lia and her team design and scale uniquely integrated solutions that meet complex client needs, incorporating all aspects of the firm's holistic payments offering: Global Payments, FX, Merchant Acquiring, Commercial Card, Trade and Digital Retail Banking. Lia partners closely with product and sales organizations, and is responsible for the overall global solutions strategy to maximize commercialization of the firm's capabilities with some of its largest and most strategic global clients.

Previously, Lia was the Head of Business Transformation for Treasury Services. Lia joined J.P. Morgan in 2011 in the Corporate Strategy Group and was responsible for leading many cross-line of business projects. Prior to joining J.P. Morgan, Lia worked as an Associate Principal in McKinsey & Company, a leading global management consulting firm. She spent more than five years at McKinsey, serving a wide range of banking and capital markets clients.


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