Banks are facing "the most serious liquidity erosion in nearly two decades," argues M.A. Schapiro & Co. equity research director Charles Cranmer. The company's data shows that illiquid assets as a percentage of core liabilities have risen from 84% to 95% in two years. Banks are taking their low-cost core deposits for granted, he believes, and pushing customers away by keeping rates too low.
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The increasing adoption of virtual card payments by accounts payable departments has created an unexpected complication for suppliers: more friction in the processing, posting and reconciliation of payments and receivables. The root of the problem is that most suppliers rely on a manual approach to processing e-mailed virtual card payments. Suppliers are forced to balance their organization’s need for operational efficiency and control with rising customer demand to pay with a virtual card. But a new breed of technology enables suppliers to process virtual card payments straight-through, addressing the needs of buyers and suppliers. This paper details the growth of electronic business-to-business (B2B) payments, shows how manual approaches to processing virtual card payments cause friction in accounts receivables, describes a way to process virtual card payments straight-through, and highlights the benefits of frictionless payments.