EMEA treasurers looking beyond banks for innovation, Finastra research finds
Research from Finastra has revealed that the market dominance of banks in the delivery of corporate treasury services is under threat from non-bank market entrants. According to its survey of 380 corporate treasurers from enterprises across Europe, the Middle East and Africa (EMEA), 70% believe that a shift from bank to non-bank services will take place within their organisations over the next two to five years – 16% say this shift has already taken place.
The survey findings, presented in the report ‘Digital Disruption Comes to the Corporate Treasury’ reveals that corporate treasurers are considering using non-bank service providers for a wide range of core services including payments (71%), foreign exchange (FX) platforms (67%), liquidity pools (67%) and trade and supply chain networks (56%).
The move is well underway: 76% of respondents say their business has already integrated with trade networks to link supply chain financing with payments. More widely, just 24% of respondents say they now exclusively use their bank to facilitate payments, with others choosing alternatives including SWIFT gpi (46%) and alternative cross-border payments services (43%).
The demand for non-bank corporate treasury services comes as treasurers look to leverage technology to drive value and enable real-time payments. When asked about their top priorities for the year ahead, the treasurers surveyed cite technology enablers such as real-time payments reporting (74%), cash management technology (66%) and risk management technology (58%). A significant proportion also note the opportunities on offer through more advanced technologies like AI and machine learning (40%) and mobile channels (31%).
Significantly, there appears to be strong demand for Open Banking-enabled services among corporate treasurers. In the Finastra survey, 29% said it was a key opportunity for their business in 2019; and when asked about the benefits of standardised APIs in the context of Open Banking and PSD2, European respondents cite factors such as lower costs (58%), cash visibility (55%), and new services being made available from non-bank market participants (53%). 83% of all respondents state they would like to use dedicated corporate APIs provided by their bank.