The research revealed that corporates’ expectations today are very much related to the ability to scale, automate processes and gain efficiencies. Respondents noted that among the most important capabilities they look for from their banks today are the ability to process transactions in real or near-real time (30.1%), the ease of using online banking systems and platforms (29.5%), and provision of mobile banking (29.1%). Clearly, technology today is seen as a means to faster and more convenient treasury management, freeing up time for treasurers to take a more strategic role in their firms.

Ole Matthiessen, Global Head of Cash Management at Deutsche Bank, explains how the bank approaches innovation on this basis. “Deutsche Bank continues to view innovation with two lenses: those emerging technologies and financial services that have begun to scale, standardise and democratise service provision, and those innovations that combine existing and emerging technology and processes in new combinations creating different outcomes for our client base.”

In the future, it is these creative solutions that treasury and finance professionals will expect as standard. Driving treasury efficiency will no longer be enough. Corporates will also expect the fusion of banking technologies to catalyse change beyond the treasury function, and enable new strategies and revenue streams. As one respondent noted, “As technology changes the landscape and the needs of our own customers and our business, we will have to work with our banks to find the best solution.”

As corporates themselves seek to understand how changing technology will transform their businesses, they expect their trusted banking partners to provide opportunities to co-create new solutions.

Indeed, the opportunity to collaborate is going to be an important part of the service offering that corporates will seek moving forward. 37.1% of survey respondents noted that “service”, which includes interaction with responsive and accessible industry experts, will be a key requirement in the future. Technology and innovation should not be launched in isolation as clients will want to be kept informed of future product roadmaps, and be involved in the development of new solutions that meet their specific needs.

Some banks are already changing their approach to product innovation in anticipation of these changing needs. Deutsche Bank, for example, has a programme that brings together clients and product developers to better understand clients’ pain points and technology solution requirements.³

Matthiessen notes that already, their clients are seeing benefits from this approach. “The bank’s investment in B2B2C innovation is illustrated by the deployment of a bank/wallet provider agnostic technique of paying and receiving securely at the point of sale [POS} within a client’s ecosystem. This uses a proprietary industry-customised ecommerce gateway coupled with our trusted secure fintech provider, Modo. Addressing our clients’ requests to become increasingly paperless, we are rolling out our upgraded digital service manager solution that enables our clients to digitally manage their interactions with the bank. This makes it possible for them to download e-binders of their bank mandates, effect an online end-to-end initiation and resolution of legal entity or product amendments, and execute documentation and audit confirmations online using e-signatures.”

Transaction banking at its core, is about banks and clients working together, in continued discussion and co-creation. While technology is expected to revolutionise treasury management in the future, the Ideas and Action report found that CFOs and treasurers do not expect technology to replace human judgement, debate and discussion. Technology is seen as a means of creating more effective, informed and efficient decisions within treasury management. The data, insight, and resources generated as a result, is seen as an opportunity to discuss client needs and possible solutions.

A review by Deloitte in early 2019 ⁴ reported that while technology will replace or supplement some functions currently completed by humans, others which are non-process based, context specific rather than standardised and non-routine, will still require human judgement.

Given that these descriptions of functions could be used to describe many of the processes and decisions required in treasury management, the future looks set to be a powerful fusion of people, new and existing processes and technology to drive true innovation.

For more details on the transaction banking selection criteria used by corporates, download the full research report ‘Striking the right note, building resonant propositions for transaction banking’ from www.ideasandaction.com.

Pia Gonzalez-Nazareno is CEO & Managing Partner, Ideas and Action

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Sources:

¹ Ideas and Action, Striking the Right Note: Building Resonant Propositions for Transaction Banking, June 2019
² Financial Times, 27 November 2017, ‘Most innovations are mere novelties’ (https://www.ft.com/content/a3357dfe-cbb4-11e7-8536-d321d0d897a3), accessed 10 July 2019
³ 2019 Banking and Capital Markets Outlook, Deloitte Centre for Financial Services, www.deloitte.com
⁴ Deloitte Review, Issue 24, January 2019, What is Work?