Ovum Report: Corporate Treasurers Need More From Banks


Corporate treasurers face complex tasks, many of which require manual intervention. Image: Shutterstock

The role and responsibilities of the corporate treasurer have grown so much since the financial crisis, it’s no wonder that banks struggle to meet their needs. As corporations scale faster than ever into a global marketplace, new entrants to financial services are beginning to compete in areas traditionally dominated by banks. In light of the competitive environment, it’s crucial to know what corporate treasurers need.

Ovum and Temenos’ new report, titled “Understanding today’s Corporate Treasurer,” was written based on research conducted involving 200 corporate treasurers all over the world.

Findings reveal that corporate treasurers face operation issues in four key areas: cash and liquidity management, forecasting and analytics, risk and compliance, and cost and operational efficiency.

  • Cash and liquidity management

As it stands now, only 13% of multi-national corporates can monitor their cash position in real-time.

Corporate treasurers cite the lack of real-time data and reliance on manual processes as the biggest challenges they face today.

Under bank regulations like Basel III that are more stringent than ever, treasurers rank timely data on their liquidity as “mission-critical.” Real-time payment schemes and improved domestic payment infrastructure can offer quicker settlement and more transparency.  Additionally, cross-border payment activity is the central factor in this issue. This complicates the problem of liquidity management with foreign exchange and exotic payment corridors; a known pain point for global banks.

A lack of interoperability across platforms makes monitoring balances across multiple providers nearly impossible. Legislation like PSD2 that pushes banks to allow for the development of open APIs will likely help solve this problem, but additional support for this area of corporate treasury may come from banks or from fintech challengers.

  • Forecasting and analytics

Real-time forecasting data was the most coveted service enhancement for 39% of corporates in this survey.

Better data analytics could enable more accurate cash forecasting, according to corporate treasurers. The aforementioned real-time view of cash held in all accounts and interoperability of both transactions and data would allow for more precise scenario-based forecasting. Corporate treasurers in larger firms often manage a large number of banking relationships, in addition to other financial service providers. Simplifying the way corporates view their trade flows, receivables, future liquidity, and credit needs is the most commonly repeated request in this report.

  • Risk and compliance

Managing FX risk is a primary challenge for 25% of corporates.

As in every other job in finance, corporate treasurers face significant challenges in risk mitigation, as well as compliance and reporting. Most of the corporate treasurers surveyed identified risk as a particular operational challenge, as well as an expense. The report focuses this section in particular on FX risk for multinational corporates, for whom cross-border payments are a continual pain point. Banks stand to lose out on fee income as non-bank providers move in to offer improved services:

“From the bank perspective, the revenues attached to corporate foreign exchange business makes this an important area in which to focus on innovation in order to retain this fee income; not least because of the growth in the use of brokers and non-bank providers in this space. While the lead banking partner remains the first choice FX provider for 50% of corporates, 47% make use of brokers or specialists as a second or third option.”

  • Cost and operational efficiency

39% of corporates with $10B or more in assets still suffer from manual intervention in key workflows.

The treasurer’s classic operational objective of managing cost and and maximizing operational efficiency is also the one most dogged by manual processing and antiquated infrastructure that leaves gaps in the digital services available from banks. Nearly 30% of respondents listed this as their biggest single operational challenge, noting that the problem is exacerbated in any process with multiple stakeholders.

According to Ovum and Temenos, the final word is this: Banks that cannot adapt to better serve the needs of these treasurers will lose their dominant position as the competitive landscape of financial services opens up to challengers who may be better suited to these tasks.

Read the full report here.