Cash & Liquidity ManagementPaymentsAccess to funding the top priority for corporate treasurers today

Access to funding the top priority for corporate treasurers today

Within funding, treasurers are looking out for improved KYC process, access to alternative funding sources and access to corporate bonds, bond data

According to research, the top three priorities for corporate treasurers today are to improve access to funding, predict and manage risk and improve usability and staff productivity.

Treasury Ecosystems – Opening Today for Tomorrow  – sponsored by Finastra – surveyed 400 corporate treasurers around the world to reveal key treasury priorities.

The above mentioned priorities were considered by 84%, 57% and 53% treasurers respectively. However, 59% of the respondents said that getting real-time data and payments will become the top priority for corporate treasurers by 2022.

Banks continue to be an important member of the treasury ecosystem since almost 80% respondents answered that banks manage and govern digital treasury platforms, and are the key partners to help a treasury organizations achieve its priorities.

Torsten Pull, Senior Vice President & General Manager for Corporate Banking at Finastra, commented: “APIs and cloud-based solutions will be critical if banks are to deliver on the changing requirements outlined by corporate treasurers. Open Banking and evolving treasury technologies are transforming the corporate sector, forcing financial service providers to evaluate the role they want to play in the digital ecosystem. We’re also seeing changes in both bank and corporate treasury business models, with greater importance placed on collaboration and choice, particularly through the creation of digital treasury platforms. Platforms like Finastra’s will allow banks and their corporate clients to co-innovate and co-develop new solutions.”

Analytical solutions as service

The report expects a fundamental change to transactional business and operating models as banks explore their roles in the ecosystem. This will result in a wide variety of business models that will embrace key criteria from one or several of the following three roles: Product provider – focusing on incremental improvement of services, relationship banks – re-inventing customer relationships and acting as a trusted advisor, and platform players – combining cloud, hyper-automation and data analytics to use their data, operations, license and technology to deliver Business Process as a Service propositions.

Treasurers expect most value from simpler and faster access to a wide variety of analytical solutions. APIs and cloud-based solutions will be critical to delivering these solutions. IDC foresees tough competition for the best ideas and solutions. This will
span from generic analytical solutions from hyperscalers (AWS, Microsoft, Google); niche solutions addressing specific problems from fintech startups; highly specialized, custom solutions from analytics companies; and domain-specific solutions from financial technology suppliers.

Over time, IDC expects banks to enter the arena with offerings such as analytics as a service, enabling customers to leverage the banks’ analytical capabilities in a self-service model, and insights as a service, where the bank runs the analytics on behalf of the customer.

Another key benefit is increased pricing transparency due to product comparison platforms and to marketplaces for credit and higher-yielding deposits, to address the funding gap and low-interest rates.

Payments and payment partnerships

Banks are perceived to be weak in areas like innovation (47%), real-time data and data aggregation (45%), risk management (35%), lending and debt financing (30%) since the respondents were not satisfied enough with the service levels of the banks with regards to these factors. Real-time data and data aggregation (42%), risk management (41%), lending (11%) and debt financing (10%) also feature as the least interests from treasurers in terms of areas of partnerships with the banks. Treasurers are not only most satisfied (90%) with payments, but also are the most interested in payments as an area for partnerships with ecosystem players from a treasury perspective (78%).

Service offering for day-to-day treasury operations and analytical insights to optimize and automate the treasury function are of top interest for the treasurers. Treasurers interests in future business models, according to the report, are as follows:

  1. Treasury as a service (70%)
  2. KYC as a service (61%)
  3. Accounting as a service (56%)
  4. Analytics as a service (50%)
  5. Identity as a service (49%)
  6. Outcome-driven advisory services (47%)
  7. AR/AP as a service (43%)
  8. IoT (19%)

Transformation of the treasury department

The report concludes by highlighting the way forward for the banks as identifying their strengths, determining their future role in the ecosystem and building a road map to develop the necessary capabilities.

Thomas Zink, Research Director at IDC writes in the research: “The finance function is transforming at pace, led in large part by the growing importance of the role of the corporate treasurer, and treasury more broadly – now recognized as an essential change agent for the business. […] With this role change, we are witnessing the transformation of the treasury department into a data-driven, highly automated arbiter, equipped to optimize liquidity and enable future investments, and able to predict and hedge against volatilities in the market better than ever before.”

The full report can be downloaded here.

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