Research and consulting firm IDC Financial Insights and banking software systems provider Temenos gathered feedback from 220 corporates around the world about the e-payments services offered to them by their banks. Nearly two in three of the corporates surveyed (63%) responded that they are dissatisfied with the services they receive.
Corporate-bank relationships are becoming more precarious as companies seek to reduce risk by establish multiple banking relationships. Additionally, corporates are increasingly interested in new providers able to offer innovative payments services that banks do not.
“The overall message that we’ve got is that there’s an opportunity for change, innovation and agility,” Amanda Gilmour, payments director for Temenos and one of the authors of the survey, told gtnews. “There are opportunities and options available now to corporates. Corporates are now recognising that they now have a bigger voice.”
Based on the survey findings, IDC and Temenos conclude that if banks refuse to make more of an effort to appease their corporate clients, they risk losing them altogether. “What we can see from the response of the corporates is that they feel their financial institutions have been fairly insular,” Gilmour said.
“Two or three years ago, [corporates] would stay because they didn’t want to or couldn’t move. Now they’re saying, ‘Hold the phones; we actually can move.’”
- Dissatisfaction over e-payments is not limited to one geography but is global: With the exception of Latin America, dissatisfaction rates ran from 61% to 73% in all regions surveyed, with Australasia having the highest rate.
- Corporates are not convinced their banks are interested enough in their success: Six in 10 survey respondents do not believe that their banks support their e-payments requirements, which is evidenced by a dearth of relevant and innovative services. Given the right alternatives, IDC and Tenemos believe some corporates could ultimately take their relationships elsewhere.
- Banks need to provide their corporate clients with a universal view: A hefty 91% of respondents said they want a universal view of the corporate payments environment. The inability to access and create a single picture from multiple systems was identified as corporates’ biggest point of frustration.
- Corporate/bank relationships remain stable – for now: Nearly three in four respondents (73%) reported that the number of banks they do business with will likely remain consistent. However, some of the respondents who do plan on increasing their number of banks are doing so to gain services not currently available to them.
- Corporates are looking around: One in four respondents globally admitted to looking at nonbank providers. Nearly half the respondents in North America and Europe said they have investigated alternative providers.
Gilmour noted that corporates do not necessarily want to give up their banks for nonbank providers, rather, it’s simply about finding the services that they need. “I think that there is an element of inertia. I think they’d rather their bank offer them what it is that they’re looking for, as opposed to moving,” she said. “One of the messages that comes across quite strongly from the research is that the financial institutions cannot afford to be complacent anymore.”
Gilmour added that the report is not meant to ‘bash the banks’; instead, it is intended to show them what they need to do to keep their corporate clients. “Where there’s a gap, there’s an opportunity,” she said. “They want you to innovate; so innovate. They want a single view; give them a single view. It’s about where you can go as opposed to just showing where you failed.”
The global economy has seen about eight years of growth, but we are starting to see the end of this which is triggering some volatility in global markets, Stefan Bielmeier, DZ Bank, argued in his keynote speech at the Bellin annual 1TC conference. Other speakers discussed blockchain, cyber crime and netting.
A series of governments are now very worried about the idea of bitcoin and these currencies because customers would be able to make sustainable ongoing transactions and payments without having to ever introduce the use of a typical financial model or banking system. To combat this potential threat, several countries including major central banks like the Bank of England and the Bank of Israel will be launching their own version of a cryptocurrency. This could bring big advantages to customers.
In modern-day banking, transactions are still a laborious process—sending money across the globe involves time, effort and risk. Payments moving across borders are slow, as they typically hop from one correspondent bank to another, each sitting on the funds, ccollecting afloat for who-knows-how-long.
Once there is KYC blockchain, the technology will be at the forefront of helping to identify those who present a greater risk of criminality, argues David Poltorak, chief technology officer at Fortytwo Data.