Trust is top priority for treasurers as risks increase

BNP Paribas and Boston Consulting Group’s 2018 Corporate Treasury Insights report reveals that for treasurers working on strategic projects with third parties, trust is still the key deciding factor when choosing a partner organisation.

The findings come against a backdrop of increasing regulation and the rise of new, digital players in the marketplace.

The report surveyed 700 corporate treasurers and CFOs from multinational businesses, who cited trust alongside reliability, excellence in delivery and strong relationships as the key factors when deciding upon a service supplier.

However, these qualities are becoming harder to track and establish in an increasingly digitalized environment. The report highlights that 65% of treasurers have a strong level of trust in their bank, but that is starting to erode as new, disruptive competitors to traditional banking institutions emerge.

Traditional human interactions in banking are still valued over digital channels, but treasurers are becoming more interested in using digital service delivery methods – 60% compared with 50% in 2016.

Jacques Levet, head of transaction banking for Europe, EMEA at BNP Paribas, said: “As treasurers operate in an increasingly complex world, the complete trust they are able to place in their key partners becomes an ever-more critical success factor.

“If banks do not want to lose part of the inherent trust their clients have in them to new digital providers, they need to focus on improving their operating model both in terms of engagement and delivery.”

As traditional banks come under more regulatory pressure and greater competition from a fragmented financial services landscape, the number of risks faced by treasurers when making decisions around transactions and technology are increasing, particularly as the role of the treasurer expands.

Whereas the 2016 survey found that treasurers were tasked with managing two or three critical risks facing their business, they are now responsible for dealing with five or six – including cybersecurity, which has been placed in the top five risks facing treasurers for the first time.

The use of client relationship data to better understand treasurers’ needs is among the report’s key recommendations. According to Yann Sénant, partner & Paris managing director at Boston Consulting, as treasurers become accustomed to fewer human interactions with third-party suppliers, “The key will be to combine technology with experience and knowledge of treasurers’ needs. The new paradigm is a data-enhanced senior banker, working along with an agile client team.”

The full report is available here.