The ultimate guide to developing cash management systems with OutSystems

The ultimate guide to developing cash management systems with OutSystems

As technology continues to revolutionize, how we conduct financial transactions has changed and tracking cash position becomes significant. Often a cash management system is considered the backbone of the financial industry as it results in accurate cash forecasting and optimal control of cash flow. 

However, most financial service providers still rely on the traditional approach of handling cash that often results in erroneous entries and inaccurate inputs. This raises the issue of real-time tracking, seamless reconciliation, and an efficient cash management process is the need of the hour for financial institutions. When it comes to streamlining cash management through enterprise-grade solutions, OutSystems low-code platform innovates legacy procedures, enhances customer experience, and digitizes cash-related operations. 

Here we discuss cash management systems, why fintech providers need one, the challenges fintech faces in building cash management applications, and how OutSystems can solve them. In the end, we will also highlight how to securely transact from a cash management application. 

What are cash management systems? 

A cash management system is software that helps transact, forecast, track, and report corporate cash flows, ensuring smooth operational workflows for Financial Service providers (FSPs). These solutions integrate with your existing CRM, ERPs, accounting software, and databases to monitor, control, and optimize the cash inflows and outflows within an organization. The connecting system allows FSPs to get the updated-real time cash flow data. A cash management software allows you to automate cash management processes like tracking, payables, receivables, billing and payments, payrolls, taxes, etc.

Why do BFSI enterprises need cash management applications? 

Financial service providers need an effective cash management application as it enables enterprises  to optimize cash flow, improve operational efficiency, and enhance financial stability for businesses and individuals. Cash management applications can vary in complexity, ranging from simple solutions to sophisticated software systems, depending on your use cases. However, most of these systems help enterprises, in the long-term, to increase interest income through automatic funds transfer services, consolidate multiple transactions and reduce dependency on credits. Here are some reasons why your fintech firm needs cash management applications: 

#1. Tracking of cash flow-data

A cash management system allows enterprises to monitor and track cash inflow and outflow on corporate operating, investing, and financing activities in real-time. As the financial industry finds it challenging to track real-time cash balances based on consolidated statements and automated segmentation of cash transactions such as taxes, payrolls, receivables or payables, etc., a cash management system solves this problem while enabling a streamlined management of liquidity, reduced idle cash balances, and maximized utilization of available funds. 

#2. Seamless reconciliation

Cash management systems enable financial service providers automated functionality to match data on cash transactions, one-to-one, one-to-many, and one-to-all. It automatically defines outstanding cash transactions and reconciles them manually. 

#3. Liquidity management

Financial service providers let you manage the recording and monitoring of current and quick liquidity ratios. Cash management systems automatically calculate working capital and monitor the current and quick liquidity ratios to plan, operate, invest, and finance cash activities. It lets you schedule on-demand cash transfers between bank accounts based on needs. 

#4. In-house banking and integration with such systems

In-house banking solutions is a centralized system that assists with cash management, provides better cash visibility, streamlines payment processes, and reduces external borrowings. With a cash management system connected with your ERP and CMS, you can gain a unified view of their cash positions across multiple accounts and financial institutions. Such integrations with external banking systems results in simplified reconciliation, faster fund transfers, and enhanced financial visibility and control.

#5. Analytics, forecasting, and visualized reporting

With in-built machine learning capabilities, cash management systems empower BFSI enterprises with predictive analytics and trend-based future forecasts. It can give you accurate insights into your business's cash flow and financial performance, improving liquidity planning. A cash management system analyzes the market trends and historical data to predict future forecasts and help firms make informed decisions. This data is represented with Ad-hoc and scheduled reports for reconciliation statements, cash position reports, and cash flow statements. This helps financial service providers to evaluate cash transactions, working capital balances, payment due dates, and more. 

#6. Regulatory compliance and security 

The entire financial industry operates in a highly regulated environment. Along with a cash management system, enterprises ensure compliance with financial regulations across countries and geographies. Capabilities such as comprehensive audit trails, transaction records, and visualized reporting simplifies regulatory reporting and minimizes risks surrounding penalties or non-compliance issues. Furthermore,   Cash management systems provide multi-factor authentication, role-based access, and complete data encryption, enforcing stringent security protocols and protecting FSPs from data breaches and thefts. 

#7: Customer service and experience

Leveraging the automation, streamlined cash inflow and outflow, financial compliances, and easy integration banking systems, cash management systems result in improved customer service and experience. For example, BFSI firms can develop self-service portals for customers to view account balances, conduct transactions, and receive real-time updates on cash-related activities in real-time. Such self-service portals empower customers with complete visibility and establish a greater control into financial transactions. 

Challenges FSPs face that can be solved with cash management applications 

With the long list of benefits of cash management, it does come with complex implementation, one that only certified professionals can undertake. Developing and implementing a cash management system requires careful expertise and experience in BFSI operations and familiarity with related tools and workflows. Let’s have a look at what are the challenges faced by financial organizations in building cash management applications: 

#1. Disparate data silos 

Disparate data silos, inconsistent data fields, varying payment methods, lack of collaboration among stakeholders, etc., result in developing and implementing a cash management system challenging. In today’s digital-first economy, cash management tools centralize your data from multiple sources and provide you with a holistic view data quickly without logging in to different platforms.

#2. Manual processes 

Cash management systems provide real-time and accurate data forecasting that help make better decisions in the financial industry. Most financial service providers still use manual processes to manage cash, making them prone to data entry mistakes, redundancy in multiple systems, and inaccurate predictions. Manual processes can be time-consuming, making real-time tracking of transactions and related data  challenging. 

#3. Complex integration 

Often, financial service providers often find themselves in a tough spot when making business decisions due to disparate legacy systems that are poorly integrated or not integrated, resulting in a lack of 360-degree view of financial operations. A cash management system allows easy integration with several banking systems to provide a unified view of the organization’s cash holdings. These solutions are compatible with popular financial software like ERP, accounting software, and treasury management systems, thus resulting in a smooth data exchange and providing up-to-date financial information. Overall, a robust cash management system can effortlessly collect, aggregate, and consolidate financial data across multiple sources, enhancing data accuracy and operational efficiency. 

#4. Security breaches and cyber threats 

Financial service providers deal with customers' sensitive data, and building a well-secured cash management system can be a significant challenge. Legacy financial systems are vulnerable to data breaches and cyber threats. To address these challenges, FSPs must develop and implement cash management systems for its robust security, compliance with financial regulations like Anti-Money Laundering (AML) and KYC (Know Your Customer) laws to prevent security breaches.

#5. Handling transactions

With the increasing number of transactions, accounts, and data, customers and enterprises need a system that is reliable. An advanced cash management system must be able to handle the increased volume of transactions without significant changes in the infrastructure. Well-developed cash management systems automate the categorization of data using pre-built rules, identifying payments, working capital, and balances. 

How OutSystems solves the challenge of developing Cash management applications? 

While we discuss the potential challenges in developing cash management applications, FSPs deal with vast amounts of sensitive data and security is a major concern. Hence, the question that arises is how to develop an effective cash management system that is secure and scalable. The solution is OutSystems high-performance low-code platform. 

OutSystems builds and deploys standards-compliant applications. Along with this, OutSystems platforms rapidly accelerate low-code capabilities to develop robust, customized applications with speed and security. Here we discuss the solutions provided by OutSystems low-code platform: 

#1. Legacy modernisation 

Digitizing your cash management applications with the help of robust tools, APIs, and cloud-native technologies gives you more flexibility. OutSystems low-code development environment allows you to build modern, agile, cloud-native, scalable applications. 

  • OutSystems develops cash management applications that centralize data, streamline processes, enhance overall cash transparency, and streamline control of operations. 
  • OutSystems low-code development allows rapid application development with pre-built templates, DevOps practices around automation, integration, and CI/CD approach. 
  • OutSystems microservices and composable architectures reduce dependencies on manual processes and enable continuous monitoring of the analyzed cash balances. 

#2. Scalable apps 

A well-developed cash management software should handle the increasing volume of transactions efficiently. OutSystems production environment makes it easy to develop cash management applications through high availability, increased user load, business logic, the volume of batch processing, and the number of transactions. 

  • OutSystems automatically develops front-end servers and syncs the applications to new front-end servers. It will act as a centralized data storage for efficient cash flow monitoring. 
  • OutSystems build high availability reliable applications and detect unhealthy front-end servers in the production environment. 
  • OutSystems uses native session management services for improved performance and operations. It also automatically distributes incoming application traffic across multiple servers. 

#3. Easy integrations 

A cloud-based cash management application can be integrated with all banks, ERPs, and other data sources. The OutSystems low-code platform development can quickly and easily add pre-built connectors, web services, and cash management APIs to their applications, along with data and backend and workflow integrations. 

  • OutSystems Forge has pre-built connectors that integrate databases to logic and workflows and securely configure it for connectivity. 
  • OutSystems-built cash management applications make complex systems integrations easy through plug-and-play elements. This enables them to quickly adapt to market trends with existing integrations. 
  • The highly extensible and customized reusable components streamline cash management application development, reducing maintenance costs and risks.  

#4. Advanced security 

When it comes to handling cash transactions, security is a major concern, and the chances of fraudulent transactions are high. To ensure the protection of sensitive cash flow, OutSystems provides a secure runtime environment and the tools necessary for the secure development of cash management applications. 

  • OutSystems responds in real-time with automated controls and compliance processes that balance security and speed. The low-code platform addresses security concerns and implements multi-factor authentication, OTP, KYC mandate, and due diligence checks. 
  • The low-code platform, OutSystems, offers built-in security that encrypts data at rest and gives role-based access control allowing you to have secure applications. 
  • The OutSystems platform quickly deploys new payment mechanisms and has automated compliance and recovery controls to meet compliance requirements. 
  • With powerful tools such as AppShield and Sentry, OutSystems adds a layer of security to cash management applications deploying APIs. 

#5. Standardized architecture 

The standardized architecture allows you to maintain cash flow reliability for financial service providers and eliminates the need for guesswork. OutSystems allows you to automatically calculate cash balances, receivables, payables, etc., generating a standardized web or cloud architecture. 

  • OutSystems workflow builder enables fintech players to resolve productivity challenges. From transaction approvals to cash flow management, the case management of such incidents can be digitized with the help of the OutSystems framework. 
  • OutSystems Forge consists of reusable UI components that allow you to build user-friendly applications, creating delightful experiences
  • Managing OutSystems applications and SDLC is the key to successfully delivering cash management applications eliminating technical debt. 

How to develop a cash management system with OutSystems 

Many cash management applications help financial service providers maintain the inflow and outflow of cash. One can customize it as per their needs and market trends. A low-code development approach will help build efficient digitization of their unique cash monitoring, reconciliation, and forecasting workflows. To know how cash management applications manage bills receivable and payable, credit card payments, etc., we have taken an example of secure transactions through OutSystems applications. 

  1. Developers need to analyze business needs and requirements before starting the transaction process from any cash management applications. 
  2. Right after the analysis of business requirements, the application will go under the designing stage, where OutSystems will help you design its functionality, architecture, and tech stack for cash management systems. 
  3. A fintech provider will now examine its customized needs and let the cash management application develop as per business requirements. 
  4. Then, high-quality applications will now go through quality checks. 
  5. Now, financial service providers can migrate their cash flow data into the systems with the help of APIs. 
  6. Meanwhile, businesses can establish integration with third-party systems. 

How to transact securely from OutSystems cash management applications? 

A digital banking and cash management application makes financial transactions easy. While a user can perform multiple transactions, it raises a concern for security. So how can financial institutions perform secure transactions? Here are a few steps on how OutSystem helps secure transactions: 

Step 1: Logging in

OutSystems allows you to securely login into applications without storing your sensitive information like passwords and personal details. 

Step 2: Data sensitivity 

After logging in, OutSystems checks data sensitivity. Data sensitivity includes credit card details, passwords, bank account information, balances, etc. If the data is sensitive, it will not be stored in a cache, but the non-sensitive data will be stored in a cache with the help of a security token if required in the future. 

How security token works: Security tokens allow users to store sensitive information based on devices that generate random numbers, encrypt them, and send them to a  server with user authentication data. 

Step 3: Call APIs

After securely checking data sensitivity, you can call relevant cash management APIs happening at the backend. Your device will act as a code generator, providing a one-time password (OTP) while transacting. These one-time passwords are generated through authenticator apps on the device or sent by SMS on your mobile phones. 

Step 4: Transact

At the time of sending money, cash withdrawal, bill payments, etc., you can securely log in to the application and transact through API-generated OTP. And that is how OutSystems allows you to transact securely. 


Explore how OCB built a secure mobile banking application with OutSystems 

Read the success story here

Leverage low-code capabilities for cash management applications with Ranosys 

OutSystems low-code platform is perfect to enhancing your cash visibility, streamline reconciliation statements and ensure accurate and timely reporting. It can help you build robust cash management systems, improving UI/UX, compliance, and security. As an OutSystems Partner, we have assisted leading banking and financial firms, and we can accomplish your business cases too. Connect with our certified experts to know how OutSystems can transform your cash management processes. 

Deepa Takekar

Project Lead

Deepa is a Project Lead at Ranosys. Working on the OutSystems platform since 2019. She is a certified associate web and mobile developer holding an expertise in banking and financial industry applications. She has been delivering projects right from requirement gathering, analysis, development and delivery for banking mobile and internet applications. In her free time she likes to write about low-code, and solve challenging problems by transferring her knowledge. Connect with her over LinkedIn.

Ramniwas Suthar

Tech Lead

Ramniwas is a Tech Lead at Ranosys. Working on the OutSystems platform since 2021. He has 7+ years of IT experience as a software developer & Tech Lead in developing applications having multiple certificates with expertise in delivering digital banking solutions.He is highly-skilled, motivated, and product-oriented mobile app developer with strong object oriented programming concepts and design skills. Connect with him over LinkedIn.

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