Some businesses still turn to spreadsheets to crunch data about cash balances and transactions, or to treasury workstations that rely on bank file transfers to aggregate information across multiple accounts.
“You would be surprised at how often Excel is still the tool for large corporate clients,” said Chris Noe, head of Wells Fargo segment strategies and digital partnerships.
To make analysis and forecasting more efficient, financial institutions such as Bank of America, Goldman Sachs and PNC Financial Services Group have created their own tools for businesses; other banks, including Eastern Bankshares, First National Bank of Omaha and M&T Bank have aligned themselves with fintechs that tackle these tasks for small businesses.
Wells Fargo is introducing commercial customers to another option. The bank announced Tuesday that it is both an investor in and will refer clients to Trovata, a San Diego company that automates cash reporting, forecasting and analysis for midsize and large companies. Wells Fargo Strategic Capital led a $20 million Series A funding round that included J.P. Morgan, Capital One Ventures and other institutional investors.
The goal is to introduce clients to a product that will help them better manage their businesses. Trovata connects with Wells Fargo and other large banks though direct application programming interfaces. It then aggregates account data from multiple banks and uses it to conduct cash-flow analysis and forecasting, with little setup on the part of the business.
The bank describes the partnership as part of its broader “connectivity as a service” program; it launched Wells Fargo Gateway, which offers APIs across multiple financial services areas, in 2016.
To Wells, Trovata’s abilities to stitch together data from multiple banks using APIs and automate cash positioning, cash flow analysis and forecasting were its major selling points.
“There are other products in the market that are trying to be similar to Trovata but their approach, from how they come to market in the cloud to the user experience, is best-in-class technology,” said Reetika Grewal, head of commercial, corporate and investment banking at Wells Fargo.
Trovata says it can connect to almost any bank in the world using APIs or collect data by file transfers. The web and mobile app use transaction data to generate charts, graphs and lists that show customers how much cash they hold across their bank accounts, which Trovata founder and CEO Brett Turner points out can number in the hundreds for some larger customers.
Users can search for specific activities (for example, “Best Buy > 10,000” to isolate transactions involving Best Buy that total more than $10,000) and filter further by account, type of transaction or currency. They can create tags for their searches and build reports. Trovata will help users generate forecasts by deploying machine learning to examine historical trends and letting them test positive and negative growth factors.
The payments company Square, which is both a Trovata and Wells Fargo customer, has been using Trovata full time for the past four months. Timothy Murphy, treasurer and head of finance operations and real estate at Square, said that Trovata gathers data in real time from about two dozen banks with which Square has accounts. Having the data consolidated in one place lets Murphy analyze the data by country, currency, legal entity and more; decide how to move money; and produce reports for treasury and other teams.
Previously, he says, Square used Excel and a different treasury workstation system.
“Other products effectively do similar things but it’s last-generation technology,” Murphy said. “Trovata is the first to use APIs rather than the more traditional bank-to-bank reporting systems, so the information is richer and more real-time.”
Wells does not sell Trovata’s software to clients directly. Instead, it refers those from its commercial and corporate bank, with typical revenues of $10 million and above, where it feels Trovata is a good fit. The bank will also earn a commission from these referrals.
“This is part of our efforts to make our bank easier to do business with, easier to extract value out of,” Grewal said. “The partnership is furthering our journey of being a partner to our clients as they grow.”
Referrals began at the end of the first quarter, and so far several dozen Wells Fargo clients have adopted Trovata. The bank says it has received very positive feedback and seen no attrition.
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