Corporate Treasurers’ survey indicates alternative providers are a real threat to traditional banks
Disintermediation risk looms, but strong opportunities exist for banks that act quickly to improve services.
GENEVA, Switzerland – 16 October 2014 – Temenos (SIX: TEMN), the market-leading provider of mission-critical solutions to the financial services industry, and IDC Financial Insights, today announce the results of their ePayments Corporate Treasurers survey, which canvassed the opinions of 245 corporate treasurers within the FTSE 500.
The survey recorded a high level of dissatisfaction among treasurers, with, on average, only 9% reporting them-selves ‘satisfied’ or ‘moderately satisfied’ with their ePayments services. This stands in sharp contrast to the abundant profitability opportunities currently offered by corporate banking, with payments and international trade showing strong growth. Banks’ failure to take advantage of these opportunities is leaving them open to disintermediation, with 47% of respondents within Europe having investigated alternative payments providers.
However, the survey identified tangible ways for banks to improve their ePayments services, through gathering information on the pain points most commonly experienced by treasurers. The lack of a universal view and the inability to access and create a single picture from multiple systems scored highest in the survey. The former was predictably the top item on the corporate’s “wish list”, recorded by 91% of the respondents.
Surprisingly, security concerns ranked high in only one or two geographies, perhaps because security is seen as a core banking function. The remaining pain points included the lack of payment deferral, the requirement to prioritise payments, and the inadequacy of mobile payments functionalities.
Overall, the survey revealed that resolving pain points and offering value-added payments services is clearly the route for banks wishing to improve their overall profitability through corporate banking services. The technology for achieving this already exists; it’s incumbent on banks to act quickly and institute the necessary changes if they’re to avoid losing out to alternative providers.
Amanda Gilmour, Product Director – Payments, Temenos, said:
“It’s more important than ever that we understand what banks’ corporate customers want. While our survey reveals a low level of satisfaction with ePayments services, almost a third of respondents rated their satisfaction level as ‘neutral’. Addressing the pain points identified in the survey should raise this rating to ‘satisfied’, and prevent these corporates from transferring their custom to new players in the market. Where there is a gap, there is an opportunity; we can help banks to focus on this opportunity.”
Jerry Silva, Global Banking Research Director, IDC Financial Insights concurs:
“The technology to address these challenges is available today, and helping their corporate customers overcome these pain points represents an opportunity to strengthen their relationships and drive growth in the corporate payments business.”