Transaction banks should keep the ideas and products coming but they should up their services game, too.
If banks want more transaction banking business from treasurers, they’re going to have to work a lot harder and offer a lot more customized services. That’s the upshot of a recent report from BNP Paribas and Boston Consulting Group, which survey 750 treasurers and CFOs.
“[C]orporate 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,” the BNP report said.
The reason for this is that an “open and more digitized playing field” has disrupted the way banks and companies interact. As such, treasurers expect their banks to do four things, the report noted. These include:
- Serving as a leading aggregator for the entire treasury ecosystem;
- Using IT capabilities to provide efficient and personalized service;
- Offering superior risk management and advisory capabilities; and
- Tailoring big-data analytics and digital capabilities to improve the overall treasury experience.
As the BNP report also noted, treasurers “expect banks to distinguish their service by getting out of a product mind-set and putting the customer experience first. Banks should redesign processes and solutions with treasurer needs in mind by centralizing, streamlining, and integrating high-quality solutions and advice end-to-end.”
That means banks must provide creative ideas in addition to services, to help companies attain their goals, Mr. Subramanian said. For instance, if it’s a matter of attaining working capital efficiencies and driving working capital metrics, the bank or other provider that will win the business is the one that brings to companies “the intellectual capital to drive toward what they need to achieve,” he said.
And banks have been partnering with fintechs to offer companies that needed brainpower. In the early days of fintech, there was some speculation that the banking business was in for major disruption (and possible replacement a la Uber) as new, more nimble and more risk-tolerant upstarts would take over bank business. However, banks are now finding themselves in the older sibling role, funding and in many acting as regulatory advisors as rule-makers begin paying more attention to fintechs. Now banks and fintechs are working together to offer treasurers the tailored services they seek.
Still banks will have to continue to work harder “to meet the sophisticated needs and expanding remit of their treasury clients,” the BNP report states.
“At a time of increasing fragmentation, treasurers expect banks to offer a streamlined, transparent, digitized, and customer friendly experience and serve as a one-stop shop to address the full set of treasury needs,” the report said. “Banks can meet those expectations by leveraging their traditional IT strengths and trusted advisor status and by partnering with fintechs.”
And they have to deliver on their promises, Mr. Subramanian said. “If you just come up with the idea and don’t deliver, it won’t work,” he said. “I think it is the advisory and the ideation which always will remain important, but that has to be coupled with a strong capacity and commitment to deliver. And that’s what treasurers are looking for; they’re looking for consistency over time, and reliability.”