AFP Nashville 2024 – what do corporate clients want from their bank?

In today’s turbulent economy, corporate treasurers are looking for banks that offer payment and treasury services that help them automate tedious AP and AR processes, optimise their liquidity management, reduce risks as well as costs. As a result, banks need to change to meet the higher expectations that corporates have towards their payment and treasury management services.

One of the key objectives of Icon attending AFP Nashville this month is to hear first-hand from corporate treasurers about the issues they are facing and the services they would like to receive from their banks. The intelligence gained allows us to continuously extend and improve our payment processing solutions that help banks to adapt and innovate their payment services to the changing needs of their corporate customers and be able to create new revenue streams by offering new value-added services to these corporates.

In this blog, we have outlined some of the key areas that we expect to be top of the agenda.

Seamless integration with treasury management systems

Removing error-prone and inefficient manual processes is a top priority for the corporate treasury function. This means that, when it comes to adopting new banking services, corporates want a banking partner that can seamlessly, and digitally, integrate with their existing accounting, ERP and treasury management systems.

For this, flexibility is crucial. Many corporates are switching to new industry standards like ISO 20022, but at the same time banks also need to have the flexibility to support other message formats that corporates may have so that the corporate is not forced to change its systems. Corporates also want to receive from their banks digital payment notifications and account statements in formats that are more data-rich, such as ISO 20022, to reduce the inefficiencies and exceptions in their AP/AR processing.

24/7, real-time payments services with international coverage

Many large corporates operate on a global basis and are looking for banking partners that can process payments through the payment infrastructures in multiple geographies in the most cost-efficient manner. Payments are business critical operations and the move to real-time services is becoming increasingly important. It can enable treasurers to improve working capital optimisation and liquidity management, reduce costs and manage risk. This means that a bank servicing large corporates can obtain a significant competitive advantage when it is able to clear and settle as many payments as possible via one of the real-time payment rails that are emerging in the different parts of the world.

While adopting new payment rails can be costly and time-intensive for banks, there are opportunities to maximise investments. New ISO 20022 based real-time payment rails have a large number of similarities and make it possible to consolidate payment processing to one single solution instead of different solutions for each scheme or country. The cost reductions that banks can achieve from this consolidation are enormous and make the business case for a consolidation initiative very attractive. In addition, a new solution can also enable banks to launch new value-added services that can create new revenue streams for the bank, like Confirmation/Verification of Payee (CoP/VoP)).

Services to improve risk related insights and decision making

The corporate treasury environment is becoming increasingly complex in which risk management takes a more prominent role. It concerns risks related to customers, suppliers, countries, currencies, interest rates and commodity prices. If these risks are not managed correctly, one single risk event can have a major impact on the financial results and even stability of the company. Therefore, getting insights in these risks and making decisions regarding risk mitigating measures has become a significant part of the treasurer’s responsibility. There is an interesting opportunity for banks to offer services which can help treasurers with gaining insights and managing these risks.

A survey that Icon conducted with Celent revealed analytics-driven tools to support better decision making are also high on the list, with 77% of the corporates indicating that service enhancements in this area is something they would pay for. However, it is also something for which corporates said they are prepared to move. In fact, 69% would consider moving some or all of their banking business to a provider that could help them overcoming the growing complexities of treasury management.

What does this mean for banks?

Automating processes, increasing operational efficiencies, and improving data-driven insights are top priorities for corporates. As a result, we expect that services to support these aims will become an increasingly important part of renewal negotiations and RFPs.

With competition from fintechs and challengers intensifying, the pressure is on for banks to be able to understand, meet and even help to shape the requirements of their corporate clients. Modern technologies like Artificial Intelligence (AI) and Machine Learning can play a key role in this respect, helping to support a new wave of service innovation.

In many cases, though, the ability to leverage data, embrace new technologies and seamlessly integrate to provide value-added services that deliver the best user experience, requires a transformation of bank’s underlying technology architecture. It also hinges on the ability to think holistically, strategically, and long-term, about how and where to prioritise efforts.

If you are attending AFP in Nashville or would like to arrange a call with Icon to discuss how we can support you in meeting the needs of corporate clients, get in touch today.