This new Finastra report is based on a simple hypothesis: that the growing expectations of corporate treasurers has reached tipping point, and as a result of this banks will need to change their IT strategies, operating models and business models to find new ways to meet customer demand, unlock new revenue opportunities and protect shareholder value.
To test this hypothesis, Finastra quizzed 380 corporate treasurers to understand better the opportunities and challenges they face, how they consume treasury services, and their views on innovation. Finastra’s findings will provide the treasury teams of corporate banks a starting point for building IT strategies that are fit for the future.
New research from Finastra has revealed that the market dominance of banks in the delivery of corporate treasury services is under threat from non-bank market entrants. According to its survey of 380 corporate treasurers from enterprises across Europe, the Middle East and Africa (EMEA), 70 percent believe that a shift from bank to non-bank services will take place within their organizations over the next two to five years – 16 percent say this shift has already taken place.
The survey findings, presented in a new report, Digital Disruption Comes to the Corporate Treasury, reveals that corporate treasurers are considering using non-bank service providers for a wide range of core services including payments (71 percent), FX platforms (67 percent), liquidity pools (67 percent) and trade and supply chain networks (56 percent).
The move is well underway: 76 percent of respondents say their business has already integrated with trade networks to link supply chain financing with payments. More widely, just 24 percent of respondents say they now exclusively use their bank to facilitate payments, with others choosing alternatives including SWIFT gpi (46 percent) and alternative cross-border payments services (43 percent).
The demand for non-bank corporate treasury services comes as treasurers look to leverage technology to drive value and enable real-time payments. When asked about their top priorities for the year ahead, the treasurers surveyed cite technology enablers such as real-time payments reporting (74 percent), cash management technology (66 percent) and risk management technology (58 percent).
A significant proportion also note the opportunities on offer through more advanced technologies like AI and machine learning (40 percent) and mobile channels (31 percent).
Significantly, there appears to be strong demand for Open Banking-enabled services among corporate treasurers. In the Finastra survey, 29 percent said it was a key opportunity for their business in 2019; and when asked about the benefits of standardized APIs in the context of Open Banking and PSD2, European respondents cite factors such as lower costs (58 percent), cash visibility (55 percent), and new services being made available from non-bank market participants (53 percent). 83 percent of all respondents state they would like to use dedicated corporate APIs provided by their bank.
Anders Olofsson, Head of Payments, Finastra said, “Demand for convenient, real-time, digitally-enabled services has finally come to the corporate treasury. Treasurers are seeing first-hand the benefits of powerful technology platforms that use open APIs to connect cutting-edge services and are open to collaborating with third parties to benefit from these technologies. Banks need to act fast to strengthen their relationships with customers and offer the innovative services they demand.”
Microsoft and Accenture provided insights into the survey.
Patrice Amann, Regional Leader Financial Services Industry EMEA at Microsoft said, “As we move into a new era of open standards, APIs, and interconnected business models the cloud will underpin new business ecosystems that will enable corporate treasuries to thrive and their businesses to grow. Those that fail to participate in these ecosystems might stay behind and face risk of disruption.”
Gareth Wilson, Global Payments Lead at Accenture said: “Businesses are increasingly looking to their banks to become more connected in the digital economy, so they can better manage their businesses with faster real-time payments and open banking. We are moving into a world where transactions clear and settle within minutes and a number of technology players can supply vital business services. Banks will need to take care not to be demoted to the plumbing of payments and build on the trust they have with their commercial customers. Competition is heating up in the battle for the business customer.”
Download the full report here.
„O singură provizie am făcut, de card, pentru că nu mai umblu cu banii în buzunar. Banii sunt cei mai periculoși când este vorba de răspândirea unei molimi. Am renunțat la cash. În rest, este o prostie să faci provizii. Dacă vine o molimă și nici nu știi când va ajunge, dacă ar fi să se întindă, pe cât timp să poți să faci provizii? Faci provizii pe trei săptămâni, pe patru săptămâni și mai departe?”, a spus consultantul.