Banks under pressure to meet treasurers’ digital demands

As treasurers become more digital savvy through their growing use of analytics, it’s time for banks to ramp up their agility, says report

Traditional banks are under increasing pressure to meet the ambitious digital expectations of corporate treasurers, according to the 2016 World Payments Report from Capgemini and BNP Paribas.

Published in late September, the report points out that treasurers’ Top Four priorities for the immediate future are:

  1. centralisation of account management services;
  2. optimisation of banking operations, including process automation;
  3. customer-focused solutions built around data analytics; and
  4. fraud detection and prevention.

In particular, the report notes, treasurers have built up their digital savvy over recent months by experimenting with a range of analytics-based tools for improving their financial operations.

Those initiatives occurred mainly in key areas of customer analytics, such as 360-degree counterparty analysis, fraud management (for example, blocking suspect or unusual transactions) and compliance tracking.

Corporates, says the report, are using analytical methods to improve customer relationship management, and to assist with product or services refinement. By using customer-engagement data, corporates have been developing customised operating models for internal and external non-financial transactions.

“In risk tracking,” the report explains, “analytics have helped corporates to manage their liquidity risk through faster credit decision-making on their existing exposure to counterparties.

“The successful adoption of analytics by corporates has increased the appetite for such solutions.”

Indeed, that appetite is forcing banks to devise ever more innovative technologies that will bear comparison with the tools that have become familiar to their treasurer clients.

According to the report, “Banks have recognised this, and multiple levers exist for them to close the digital gap – but meeting and exceeding corporates’ expectations will require significant improvement in digital maturity levels.

“Cash management solutions and treasury operations are not being heavily disrupted by fintech offerings, but banks must be aware that they must innovate more today to keep a leading edge tomorrow.”

It adds: “While banks rate their digital maturity highly as it relates to operational efficiency and customer experience, corporates’ perception of banks’ digital abilities is much lower. Banks will need to increase their investments in digital and better market their abilities.”

The report recommends a “more open approach” will help banks stay ahead of emerging competitors and grow their transaction banking businesses. Specifically, that will entail integration with fintech firms.

“Fintechs will benefit from an enhanced partnership with banks as they face challenges based on credibility and business continuity,” it adds. “In addition, banks must continue to foster a more collaborative approach for interbank innovation, as witnessed for SWIFT’s global payments innovation initiative.

The report concludes: “Banks need to adopt agile practices… to improve their internal processes and meet challenges posed by external disrupters. As a consequence, a digital agenda should be a top priority for banks.”

Find the full report here.

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