Real-time cross-border payments are growing in presence and show no signs of stopping. A growth that will affect, not only the corporates’ treasury but also the banks’ own treasury operations. The time has come to learn how to effectively manage this change.
What’s driving this change? In spite of the increase in popularity for cross-border payments, many banks have struggled to keep up with growing customer expectations. Customers demand competitive prices, immediacy and seamless connectivity, something that, until now, traditional banks have struggled to keep up with. This gap leaves room for new players to enter the ecosystem, from nimble and dynamic fintechs to the introduction of bigtechs that extend their own services, in addition to leveraging reputation and market presence in order to compete against traditional financial providers. It’s time for the corporate treasurer to step up to compete, adapting to the changing world of transaction banking.
If managed successfully, the corporate treasurer is provided the invaluable opportunity to leverage the acceleration of payments through maximising the return on their excess liquidity. This is done by retaining it in high-interest centers, moving it geographically on a “just-in-time” basis. More to the point, using the right technology, banks can fully automate their systems with a dynamic and optimised real-time sweeping structure.
That’s not to say that it’s all smooth sailing from here, with more and more challenges looming over the heads of the banks’ treasury functions. High value payments will be cleared in real-time, meaning that managing their own position is going to become increasingly challenging. How can banks combat this? Through looking at wider digitalisation, banks can encourage ERP integration, among other things, to stretch further and deeper than at present, allowing them to stay on top of potential fund movements across their customer base.
As the presence of digitalisation across corporates and banks continues to expand, it’s clear that, particularly in the corporate banking sphere, building relationships is becoming more important. So, even though banks need to remain competitive against the burgeoning threat of the bigtechs through deploying their own advancing technologies, it’s important to highlight that what sets them apart the most is that they aren’t “bigtech”.
In order for a bank to shift from their position as a product provider to a true relationship bank, or potentially a platform player, it is vital to comprehensively integrate their corporate services. The future of banking lies within the dimensions of functional business depth, breadth and open technology that will promote sustainable and agile growth. The corporate bank that will win the monopoly on market share is open, integrated and connected. Are you ready to make the change? Head to https://www.finastra.com/treasury-ecosystems to find out how you can future-proof your bank.