BNP Paribas and Boston Consulting Group new research shows that corporate treasurers want more optimised and personalised services from their transaction banking partners to cater for new risks and a more challenging environment.
According to a new survey published today by BNP Paribas and The Boston Consulting Group (BCG), corporate treasurers expect their transaction banking partners to play a bigger role in enhancing operational efficiency and provide a more tailored approach to managing risks and adjusting to new industry constraints.
Based on a survey of 750 corporate treasurers and CFOs from multinational organizations, the 2016 Corporate Treasury Insights report reveals that security, transparency, managing liquidity in a low rate environment and combatting persistent new risks such as cyber-risks and fraud rank high among corporate treasurers’ main concerns. Corporate treasurers are clearly looking for transaction banks to accompany them through their life cycle as trusted advisors providing a tailored and data-driven experience.
When it comes to selecting a banking partner, service and price trump product
In the face of continued market uncertainty and operational complexity, the survey results show that treasurers are less interested in product enhancements than they are in having their transaction banking partners deliver predictable, reliable solutions backed by excellent execution. Service and pricing were the top selection criteria, for 60% and 70% of treasurers respectively, when choosing a transaction banking partner.
Jacques Levet, Head of Transaction Banking for Europe, Middle-East & Africa at BNP Paribas, said: “The treasury ecosystem has become ever more diverse and banking products are now more and more commoditized. This is leading banks to seek differentiation through enhanced client experience and security levels rather than only through piling up product functionalities.”
Treasurers want platform independence and flexibility
Treasurers indicated that a consolidated view of their liquidity and financial positions, detailed reporting, and greater consistency across geographies are increasingly important. They expect transaction banking platforms to aggregate areas such as cash management, trade, working capital management and foreign exchange hedging. But they don’t want to be tied to a single platform. 60% of treasurers view the ideal tool as fully bank-independent – which is already a reality for 45% of them.
Yann Sénant, Partner & Managing Director in Paris at BCG said: “Treasurers have signaled that they find closed platforms to be intrusive and binding. Instead, they’re looking for an integrated, multibank offering that preserves neutrality.”
Service models need to evolve
While the trend towards adoption of treasury management softwares is not new to the industry, this year has seen mobile apps emerge as a channel in North American Large Caps. To manage their increasingly complex operating environment, treasurers expect their transaction banking partners to deliver comprehensive, easier-to-use platforms along with personalized service and targeted, data-driven insights.
Yann Sénant, Partner & Managing Director in Paris at BCG said: “Treasurers remain frustrated by overly complex banking processes. They want banks to go further in simplifying administrative tasks, especially those related to compliance procedures and make the entire user experience fast, simple and convenient.”
Banks can differentiate their service models in four ways:
- Orchestrate the full treasury ecosystem: the use of open-architecture would allow banks to create a “one-stop-shop” in which third parties could contribute, with the bank playing a role of global coordinator. To this end, banks would need to standardize data and provide timely, customer-specific analyses.
- Provide efficient tailor-made service through channeled IT capabilities: banks need to provide treasurers with better visibility and traceability across geographies, standardized performance metrics, and more frequent and relevant communication.
Offer superior risk management and advisory capabilities: many treasurers consider banks to be the gold standard when it comes to IT system quality, given the high security thresholds required for their own operations. More than a half of respondents said that banks are their preferred provider for traditional mitigation measures, such as transaction and network traffic monitoring mechanisms and staff training. In addition, 20% to 40% would consider using bank solutions for all their IT-based treasury needs. The booming preoccupation of cyber security – now seen as #1 risk by treasurers, at par with market or counterparty risk - is an area where banks are seen as most legitimate, with as many as 45% of treasurers considering banks as service providers.
Improve the treasury experience with tailored analytics and digital capabilities: treasurers want banks to leverage on their data solutions to provide enhanced market intelligence, which would be especially valuable for large multinationals.
To meet rising expectations, banks need to focus on providing their treasury clients with a streamlined, transparent, digitized and customer-friendly experience.
BNP Paribas’ Jacques Levet concludes: “Banks should devise a true commercial offering around some of their core expertise, especially in areas like risk management and cyber security, in order to assist treasurers in the management of those same risks. Similarly, banks will need to be flexible and seek strategic partnerships with fintechs and other providers whenever relevant, i.e. choosing collaboration over internal developments when that ends up delivering more value to their client.”
Notes to Editors
This report was developed based on a proprietary cross-industry survey of 750 corporate treasurers and CFOs from organizations around the world with consolidated annual revenues of more than $500 million. The survey was conducted by Expand Research (a wholly owned subsidiary of BCG) for BNP Paribas and BCG. The study also included interviews with 25 corporate treasurers and CFOs from multinational organizations. This second edition of the Corporate Insights Treasury report adds two topics that increasingly concern treasurers: cybersecurity and advanced analytics.
BNP Paribas is a leading bank in Europe with an international reach. It has a presence in 75 countries, with more than 189,000 employees, including more than 146,000 in Europe. The Group has key positions in its three main activities: Domestic Markets and International Financial Services (whose retail-banking networks and financial services are covered by Retail Banking & Services) and Corporate & Institutional Banking, which serves two client franchises: corporate clients and institutional investors. The Group helps all its clients (individuals, community associations, entrepreneurs, SMEs, corporates and institutional clients) to realise their projects through solutions spanning financing, investment, savings and protection insurance. In Europe, the Group has four domestic markets (Belgium, France, Italy and Luxembourg) and BNP Paribas Personal Finance is the leader in consumer lending. BNP Paribas is rolling out its integrated retail-banking model in Mediterranean countries, in Turkey, in Eastern Europe and a large network in the western part of the United States. In its Corporate & Institutional Banking and International Financial Services activities, BNP Paribas also enjoys top positions in Europe, a strong presence in the Americas as well as a solid and fast-growing business in Asia-Pacific.
About the Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 85 offices in 48 countries. For more information, please visit bcg.com.