A new study gives insight into what treasurers feel about one of their key external partners; the bank.
Here’s a message for banks from corporate treasurers: you need to start applying the best practices of technology firms to become more agile and data savvy, but you also need to beef up your advisory services. This is the call from participants of the 2018 Corporate Treasury Insights report, recently published by BNP Paribas and Boston Consulting Group (BCG).
The third annual study by the partnership gives voice to 700 corporate treasurers and multinational organisation CFOs. It demonstrates the need, in an increasingly digitalised, pressurised and regulated environment, for the corporate treasurer’s expectations to be addressed with “the highest standards”, using a “subtle equation” based on reliability acquired through digital services, multidisciplinary relationship models and data value.
Since the last survey in 2016, treasurers report that they have shifted from facing two or three critical risks to now managing five or six. Of these, cybersecurity has joined the top five risks for treasurers. To maintain an effective relationship, treasurers must be able to trust their banks.
Many respondents still view their banks as an intrinsic part of the corporate family, on a par with internal functions. Approximately 65% say they have a high level of trust in their banks, which is nearly the same degree of trust that treasurers extend to internal IT (68%).
Whilst most banks benefit from inherent trust due to their compliance with regulation, their scale and their long-term establishment, the survey also revealed that this advantage cannot be taken for granted. Treasurers, especially those in a mature economy, no longer always see banks as their sole trusted advisor.
To become a “trust champion”, the report suggests that bank service models must change to meet the specific needs of all treasurers.
To meet this need, banks should adopt a “zero-interaction model” that will appeal to treasurers who are looking for fast, stable and efficient processes to complete day-to-day business in a quick and automated way.
Banks should also consider eliminating “low-value intermediaries” and process steps, focusing instead on enabling treasurers looking for agile business intelligence to receive “rapid access to the most relevant service, insight and humans”. Further, the new bank model should leverage data generated across the client relationship to help them steer their everyday activities.
Treasurers report a unanimous willingness to share additional data to providers if they can leverage it, many calling for more proactive service and advice. Although more than 60% of treasurers say they are interested in using digital channels (compared to 50% in 2016), they say the quality of human interactions continues to play an important role in transaction banking.
Underscoring the need for a transformation of the transaction banking model, almost 75% of respondents say they are willing to pay for advisory services that help them navigate complexity. One respondent said they want their bank to help prioritise, to share best practices, “and help me be more efficient”.
According to the report’s authors, banks must now find the right balance between an integrated client delivery team “that can provide deep business expertise”, and a level of client understanding that is backed by “digitised, integrated and frictionless processes”.
There is no ‘one-size-fits-all’ for clients though. In seeking a balance between the banking sector’s technological advancement and delivery of personalised human interaction, regional preferences are apparent. Treasurers in Asia Pacific favour a transaction bank with strong IT systems, whereas those in North America and Latin America place a higher priority on service. Their European and Middle Eastern counterparts demand greater personalisation of services.
“The traditional Relationship Manager era is over,” commented Yann Sénant, Partner and MD in Paris at BCG. “Treasurers expect less human interactions, but the key will be to combine technology with experience and knowledge of treasurers’ needs. The new paradigm is a data-enhanced senior banker, working along with an agile client team.”