Pushing Treasury APIs That Will Make the Industry Better

"Our treasury team of four manages more than 800 bank accounts across nearly 40 active banking relationships," explains David Miller, senior vice president and treasurer of Hunt Companies. "As a real estate owner and operator, we have to keep funds separated across all our projects because every entity that we control is different. Many of our projects involve external partners, with different ownership structures and internal and external investment vehicles. This makes consolidating cash very, very difficult. We really need a one-to-one relationship between entity and bank account."

Not surprisingly, this complex account structure makes cash management challenging. "Because we cannot commingle funds, automation is crucial," Miller adds. To that end, direct connectivity between internal technology systems and Hunt's banking partners is key. "For years, I have been pushing our treasury management system vendor, Kyriba, and our banks to build APIs [application programming interfaces]. It pains me to implement new FTP connections at this point."

Miller started college as a computer engineering major and retains a strong appreciation for the potential impact of technology. He points out how prevalent APIs are in our lives as consumers. "No one even knows they're using APIs when they use Uber Eats or DoorDash and link to their personal bank account," he says. "Or when they ask their bank's website to show them the nearest branch, that also happens through an API to Google Maps. This is all seamless for consumers, and I have been encouraging our partner organizations to provide the same level of automation and 'real-time everything' for Hunt's treasury operations."

Hunt has always used interest-bearing operating accounts, but a couple of years ago, Miller saw an opportunity to earn more by investing excess funds from all its various entities. Short-term investments in money-market funds would be ideal—if the company could automate many of the processes underlying such investments. "Without automation, we could not even entertain the thought," Miller says. "The extra yield we could pick up wouldn't have been worth the number of accountants we would have needed to make it happen across all our banks every day."

Then Miller heard that Kyriba and ICD were planning to develop an API for short-term investments. Hunt was already using the Kyriba system for managing cash, bank statements, real-time payments, and long-term investments. He jumped on the opportunity to be involved in development of the API. "We were customer number one for the API," he says. The timing was right, because interest rates soon started rising.

"Kyriba and ICD built single sign-on connectivity and an API," Miller explains. "We helped them alpha test it, beta test it, and we piloted it—and it works great. If we want to move money into a money fund, we go into Kyriba and seamlessly launch ICD. It looks like we're still in Kyriba, but we can see all the ICD funds that we can buy, as well as our open positions and rate cutoff times. We can easily place purchases on the ICD platform, and the API will generate the wire payment within Kyriba in real time. When we have approved and released the payment, the funds will be sent over, and confirmation of the transaction will appear in Kyriba." Finally, the Hunt team will use the Kyriba entry to create and reconcile the transaction in the company's general ledger (G/L).

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Redeeming a short-term investment follows a similarly streamlined process: The Hunt team logs into Kyriba and initiates the redemption, and the funds flow from the ICD platform to the bank's BAI file. Data flows from Kyriba into Hunt's G/L.

"These workflows all just naturally flow through the Kyriba modules and ICD platform with very little manual interference from us because of the API connection," Miller says. He now manages the company's short-term liquidity himself, and his involvement in the process is limited to reviewing available funds and interest rates, locating excess cash, deciding where to transfer funds, and initiating wire transfers within Kyriba.

Miller stays in close contact with individuals in financial planning and analysis (FP&A) and throughout the company so that he is aware of cash balances and anticipated cash flows. But, he says, the actual activities around investing excess cash take mere minutes each day across Hunt's 800-plus bank accounts "because managing liquidity is now very simple."

For corporate reporting, Hunt accountants log into ICD Portal through Kyriba to gather data such as historical yields or investment positions, and they don't even realize they're utilizing a third-party application. "They just call it Kyriba," Miller says. "It's all completely seamless and straight-through."

Miller estimates that without the API connectivity, each short-term investment or redemption would take about 20 minutes of time for someone on the Hunt treasury team, which means "we wouldn't do it," he says. "Without all this integration in place, we just wouldn't be moving money into and out of money funds. That means the 10 to 15 basis points we are making on the money funds compared with our interest-bearing bank accounts is entirely attributable to our use of the Kyriba-ICD API. And it's significant to our business: The interest income I've projected for 2024 may be the most Hunt has ever made from interest income in one year."

What lessons has Miller learned from this project? "APIs are brand new in corporate treasury, and they are not happening quickly," he says. "But every treasury professional should be telling everyone they do business with right now—banks and software vendors—that they want APIs. Because APIs are going to get us to a real-time world where treasury is no longer relying on batch-process FTP transmissions. We are already there as consumers, but corporate treasury is not there yet.

"So treasury professionals need to both be patient and ask for exactly what they want," he concludes. "They need to take the time to think through how their processes could work better, then build relationships with the vendors that can support those new processes. That way, when they call to ask for an API or other new technology, the vendor will answer the phone and respect their opinion. It is worth the time and effort because in the end it will make us more efficient and make the industry better."

NOTE: David Miller is the treasurer and senior vice president of Hunt Companies, and has more than 25 years' experience in treasury and cash management operations. The views expressed in this article are his own and not those of Hunt Companies, and should not be viewed as an endorsement of Kyriba or ICD, nor should this be viewed as financial advice.