US Cash Management – Three Banks Leapfrogging Legacy Technology

Over the past few years, Celent has highlighted significant new entrants or solutions launched into the US Cash Management market. Goldman Sachs launched TxB in 2020, then Silicon Valley Bank completely rebuilt their cash management capability with SVB Go. Now, in April 2024, top 10 North American bank, Canada's RBC launched RBC Clear™ - a purpose-built cash management solution for the US market.

What do these solutions have in common? In business terms, actually very little. Although all launched initially for the US market, each is designed to serve specific (and different) client segments.

• Goldman Sachs TXB – investment banking clients and Banking as a Service offerings.
• SVB – innovation economy of startups and founders, with the goal of supporting them as they grow.
• RBC Clear – Fortune 1000 companies and their US operations.

None of these really competes fully against the breadth offerings of the large cash management providers either. Again, there are slices of overlap, but really only in the specific areas mentioned. What they do have in common though is use of advanced technology and architecture models. They are each a mix of build and buy – taking modern building blocks from their IT organization, partnering with leading vendors where desired, and deploying these cash management solutions on cloud infrastructure. Each of them is a household name, but they all deployed “greenfield” solutions to enter this business, and leapfrogged much of the legacy infrastructure that typically dominates this space. One could argue that these are (in technology terms) “neo” corporate banks, but with familiar brands. So, kudos to all three of these banks that brought advanced technical solutions to market (with their vendor partners) in a very short timeframe, and with experience designed for the unique needs of their clients.

For the broader industry, Celent research from 2023 shows that “achieving greater speed and agility” ranks as a top driver of bank technology investments, and I have no doubt this will remain a dominant driver. This is not just about business agility, or agile models for DevOps, but a rethink of how technology solves business problems and addresses opportunities. Yesterday’s functions and processes are not tomorrow’s requirements. Banks allocate investment to technology that supports business growth through a combination of more effective architectures, technology platforms, and use of strategic partners.

However, this driver applies beyond innovation and the response to fintech competition. Banks must deliver the full technology portfolio faster. A longer list of portfolio initiatives can present project delivery and resource capacity issues quite quickly. The risk of not delivering faster means that compliance will dominate the agenda, with limited capacity to deliver new initiatives. If they are not careful, banks risk being mired in compliance project purgatory.

The results of Celent’s updated technology spending survey will be out soon. Reserve your spot by registering for Dimensions: IT Pressures & Priorities Live Webinars, 2024 Edition