Thursday 28 May 2020

Olofsson: Demand for convenient, real-time, digitally-enabled
services has come to the corporate treasury

Corporate treasurers eye non-bank services: report

DUBAI, July 8, 2019

Seventy per cent of corporate treasurers polled from enterprises across Europe, the Middle East and Africa (EMEA) believe that a shift from bank to non-bank services will take place within their organizations over the next two to five years, said a new report.

Meanwhile, 16 per cent say this shift has already taken place, said the report titled “Digital Disruption Comes to the Corporate Treasury” from Finastra, a leading financial services software provider, highlighting that the market dominance of banks in the delivery of corporate treasury services is under threat from non-bank market entrants.

The survey reveals that corporate treasurers are considering using non-bank service providers for a wide range of core services including payments (71 per cent), FX platforms (67 per cent), liquidity pools (67 per cent) and trade and supply chain networks (56 per cent).

The move is well underway: 76 per cent of respondents say their business has already integrated with trade networks to link supply chain financing with payments. More widely, just 24 per cent of respondents say they now exclusively use their bank to facilitate payments, with others choosing alternatives including SWIFT gpi (46 per cent) and alternative cross-border payments services (43 per cent).

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 per cent), cash management technology (66 per cent) and risk management technology (58 per cent).

A significant proportion also note the opportunities on offer through more advanced technologies like AI and machine learning (40 per cent) and mobile channels (31 per cent).

Significantly, there appears to be strong demand for Open Banking-enabled services among corporate treasurers. In the Finastra survey, 29 per cent 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 per cent), cash visibility (55 per cent), and new services being made available from non-bank market participants (53 per cent). 83 per cent 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.”

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.” – TradeArabia News Service


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