The digital revolution in corporate treasury

The specific challenges of the corporate treasury have been sheltered from the impact of the fintech revolution until now. As the results from a new survey of finance and treasury teams reveal, businesses of all sizes are increasingly keen to understand how they can re-unite isolated pools of data distributed throughout the enterprise to drive treasury efficiency, improve automation and create value for the wider business.


New research, commissioned by Ixaris Technologies into the adoption of payment technologies among corporate treasurers, identifies growing interest in use of new products and services – indicating that the long road of the digital revolution may finally have reached the door of the finance team.

Initial results from the CFO Payment Pulse showed that testing new products and services – including use of emerging payment technologies – and increasing supplier collaboration are important objectives for treasury teams.

Interviews carried out in preparation for the launch of the research bear out the survey findings. For Alan Hawkins, Head of Commercial Cards at ING, automation of commercial payments using new technologies represents “the biggest opportunity” for banks. A point underlined by Alex Mifsud, CEO, of Ixaris Technologies: “The opportunities to resolve the many intractable challenges of payments across the enterprise are enormous. Banks play an important role in this and are finding ways to partner with innovators and new entrants to deliver treasury innovation.”

While the scale of the commercial payments opportunity is encouraging news for incumbent financial institutions it also highlights that banks and traditional providers have work to do to demonstrate the benefits of commercial payments products, particularly in the case of virtual cards where adoption remains relatively low. Among survey respondents, fewer than 20% currently use virtual cards or virtual accounts to settle their bills. By comparison direct debit and credit transfers are used by around 80% of respondents, and 54% use commercial payment cards.

Positioning the opportunity

As Hawkins remarked the challenge for banks is, “articulating that opportunity. Right now, this is still an immature market, with lots of innovation going on. Payment service providers need to be clear about the problems their clients have, and how their solution can help solve it. If payment systems providers want to be successful, they are going to have to identify specific sectors, and work with senior treasury executives at target clients to show how their solutions will solve problems”.

Indeed, different sectors and different sized businesses have varying expectations and requirements from their payment services. The research reveals that commercial card use among large firms is likely to be double that of their smaller counterparts.

Similarly, while risk mitigation is a priority for large firms for small and mid-sized businesses the role that payment services can bring in improving competitiveness is more important.

As proof of the challenge ahead, almost 65% of companies surveyed still use cheques – suggesting there’s considerable change to come as firms make the switch to electronic payments. 35% of respondents said they expect to reduce their use of cheques in the next year, citing a preference of cards, wire transfers or direct debit and contrasting with more than one in three respondents expecting to increase their commercial payment card spend by between 20% and 40%.

Among electronic payment methods, direct debit and wire transfers are currently most used by respondents; wire transfers are overwhelmingly popular for their perceived ease of use (75%), relatively low cost per transaction (42%), and wider supplier acceptance of wire transfer and direct debit (38%).

The insights reveal that these preferences are not set in stone, however. Respondents say that they might change their payment technologies if they could see how new systems would help reduce costs, make savings, or automate processes. James Sykes, Head of Commercial Cards at Lloyds Banking Group, says these findings tally with his experience: “Encouraging the use of cards among clients is all about reducing costs and benefitting both your clients and their suppliers. To persuade clients, it’s essential to work with them to help them see the benefits card usage can bring to their business. Payments can sit in so many different places, so helping customers to see the benefits of cards and make the change from existing systems is the biggest challenge.”

Automating the payment engine

It’s around automation, however, where the survey indicates the most profound change is still to come to corporate payments. A change that might not be that far away. The research shows a clear, as-yet unanswered, need to improve payment processes including payment approvals, reconciliation, invoice approval and logging receipts – alongside integrating new solutions with existing banking and accounting systems. 65% of those polled said this was the most important factor in selecting a new payment system followed by reducing the number of manual processes required (56%), and improving the payment approvals process (53%).

As Mifsud notes, while retailers have addressed many structural inefficiencies in payments, these inefficiencies have yet to be addressed by the corporate sector. According to Mifsud: “The introduction of machine-to-machine interfaces that reconcile transactions incurred with e-receipts and invoices could save businesses significant costs in terms of time and money.” Mifsud goes on to characterise the key areas of concern for corporate customers as being “cost, control and convenience” – that is, reducing cost, controlling data trails associated with transactions, and improving the user experience at every stage in the process.

While high profile new entrants in the business-to-business payments sector are few – there is some early proof of what the new model treasury might look like. Currencycloud has developed a strong track record supplying large banks and institutions with currency and cross-border payments services.

The company’s co-founder Stephen Lemon says: “There is an enormous opportunity in cross-border payments and currency transactions. Customer expectations are increasing dramatically. The key is to build relationships by responding to each customer’s specific needs. Lots of big corporate customers are on a mission to see what’s happening in fintech for treasury functions. This mission is borne of necessity given the pressure to cut costs and improve efficiency, especially when it comes to treasury cash management and the movement of funds between corporates and their suppliers.” As traditional commercial payment operations follow the path of consumer fintech innovations – the cry for automation and unification of payment services is going to get louder.


The CFO Payment Pulse 2017 survey was carried out by Ixaris Technologies, in partnership with PaymentEye and bobsguide.

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