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The Multi- Channel Treasury

Measuring the Growing Demand for Multi-Channel Bank Access within Corporate Treasury

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Executive Summary In our survey of 200 treasury professionals around the world we found overwhelming evidence that Corporates are placing a greater value than ever before on consistent multi-channel (smartphone, tablet, desktop) access to their banks information and services. Our research found that almost 80% felt it was important that their bank offer multi-channel access, and over half said it would be an important decision factor when selecting a new bank relationship. Today around 40% of treasurers use more than one channel to access their bank. This is expected to grow to around 60% over the next 12-18 months (a growth rate of approximately 50%). Driving this growth is the expectation of greater convenience and efficiency, and the expanded functionality being offered within these channels, providing the capability to manage all aspects of treasury operations. Our research found that multi-channel access within Treasury will be the norm at most companies within the next two years. Banks have so far underestimated the value Corporates place on multi-channel access. Although Corporates consider multi-channel access to be a very important factor when selecting banking partners, currently less than 50% of banks are offering consistent, standardized multi-channel functionality. The challenge for banks in the near term will be not just to develop solutions that can meet basic functionality requirements within each channel, but to develop harmonized online environments that standardize the way data is viewed and transacted across channels. Those banks that are proactive in adopting strong solutions that offer consistent, standardized functionality across channels will be able to easily differentiate themselves from those banks that have underestimated the value of a multi-channel offering to Corporates.

Introduction & Survey Background Treasury and financial professionals have been using desktop computers to conduct business with their banks for decades. Bank access is now changing with the rapid growth of mobile Corporate banking services available on tablet computers and smartphones. Mobile Corporate banking applications enable end users to remotely access a wide range of services, which include account and transaction information, remote authorization of payments, letters of credit, and trade document management. Corporate treasurers and other financial professionals are quickly adopting these solutions and realizing greater efficiency and convenience in doing so. Treasury Strategies surveyed over 200 companies of various sizes across six continents regarding the following topics: Current usage and future plans for access to banking services via multiple channels channels defined as computer, tablet, and smartphone The importance and value of consistency and standardization across multiple channels The degree to which current banking partners offer consistent, multi-channel access and the importance of this in selecting new banking partners The survey obtained responses from a broad range of company types, sizes, and geographies in order to assess demographic differences. The distribution of respondents is as follows: By Geography: 52% North America, 24% U.K. and Europe, 24% Central/South America, Asia Pacific and Middle East/Africa By Annual Turnover/Revenue Size: 30% Under $50 million, 40% $50 million - $2 billion, 30% Over $2 billion Companies Place Substantial Value on Integrated, Multi-Channel Access to Banks Corporates consider a bank offered, multi-channel solution to mange treasury activity very important, as evidenced by the survey responses. 59% of respondents considered a multi-channel solution very important.
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Only 8% of respondents considered the multichannel solution not at all important. The degree of importance that Corporates place on a multichannel solution underscores the need for banks to provide solutions to meet these needs. The value that Corporates place on a multi-channel offering is bound to grow as the technology and usage of smartphones and tablet devices increases.
On a scale of 1 5, 1 being not at all important and 5 being extremely important, how important is it that your banks offer a solution that allows you to perform treasury activities from multiple different channels such as desktop, smartphone, and tablet
1 - Not at all important, 7.9% 5 - Extremely important, 26.2% 2, 7.9%

3, 24.3% 4, 33.7%

However, simply offering a multi-channel solution does not fully meet corporate business requirements. Corporates are not just looking for a multi-channel solution, they are looking for a bank offered solution that is consistent across channels, meaning a standardized way in which activity is viewed and transacted. Corporates consider the ability to transact and view banking activity in standardized fashion across channels to be of utmost importance. Banks that are able to offer consistent, and harmonized functionality across channels will be able to differentiate themselves from other banks in the multi-channel space very easily.
On a scale of 1 5, 1 being not at all important and 5 being extremely important, how important is it for Treasury management activities to be consistent across channels such as desktop, smartphone and tablet?
1 - Not at all important, 3.5% 2, 4.5% 3, 13.9% 5 - Extremely important, 43.1%

4, 35.1%

Single Channel Usage Will Decrease by 50% in the next 12 18 Months The use of multiple channels to manage banking activity will continue to grow with the advent of more refined smartphone and tablet technology, as evidenced by survey responses regarding the current and planned use of channels.
How many channels does your organization currently use to access bank information and services? Dont know, 4.4%

This channel shift represents the widespread adoption of multiple channels for treasury management. The improvements in smartphone and tablet technology coupled with the need for Corporate Treasury groups to be more operationally efficient have led to a perfect storm for the momentous increase in demand of bank offered multi-channel solutions. Worthy of note is the fact that a significant number of Corporates plan to move from using two channels to using three channels of delivery over the next 12 months. This shift from a second to a third channel represents the addition of the tablet as a viable channel to manage banking activity and transactions. The implication for banks here is that they must be willing to develop secure technology and functionality that offers Corporates enough flexibility to work in a consistent fashion across three different channels. Corporates will be turned away from banks offering functionality across channels where the look, feel, and usability are different within each channel. While the use of multiple channels is expected to grow across organizations of all sizes over the next 18 months, markedly greater growth is expected at small and medium size companies. This is likely the result of a greater need for more flexible and convenient solutions that can help smaller treasury departments be more efficient. Banks that offer a multi-channel solution as a means to help these companies achieve greater efficiency will be successful in increasing overall satisfaction levels.
Planned use of two or more channels in the next 12 - 18 months by Corporate revenue size

Currently use three or more channels, 22.1%

Currently use one channel, 52.9%

Currently use two channels, 20.6%

Planned use of two or more channels is expected to grow by approximately 50%.


Within the next 12-18 months, how many channels does your organization plan to use to access bank information and services? Dont know, 17.2% Plan to use one channel, 23.0%

80%
Plan to use three or more channels, 38.7% Plan to use two channels, 21.1%

70% 60% 50% 40%

In the next 12 18 months, only 23% of respondents indicated they wil continue to use one channel to manage banking activities. This data illustrates the massive leap from single channel to multi-channel use by Corporates that will be taking place over the next two years.

30% 20% 10% 0% Less than $50M $50M - $250M 4 $250M - $2B Greater than $2B

Less than 50% of Banks Offering Consistent, Standardized Multi-Channel Functionality to Corporates The survey results presents a scenario where multi-channel access will be the norm at most companies within the next two years. This presents a major challenge for those banks that are behind the curve adopting technology in this area, and there are a large number of banks behind the curve. Survey data indicates that less than half of banks today offer a multi-channel solution with consistent, standardized access across channels. Those banks that are not able to meet growing Corporate demand will be hard pressed to maintain strong relationships and grow additional treasury management business.
Do your primary banking partners currently offer consistent, standardized multi-channel access functionality for you to conduct treasury activities?

Do your primary banking partners currently offer consistent, standardized multi-channel access functionality for you to conduct treasury activities? - European Response Summary

Yes, 28%

No, 72%

The below figure highlights the urgent need for European banks to step up multi-channel offerings.

Do you prefer to manage treasury activities through multiple channels including desktop, smartphone and tablet? (vs. using a single channel) - European Response Summary

No, 13%

Yes, 43.7% No, 56.3% Yes, 87%

Although demand for multi-channel access is consistent across geographies, bank offerings are not. Multi-channel bank offerings appear to be limited across a number of geographies including Europe, Central/ South America, and the Middle East. In Europe, for example, only 28% of respondents indicated that their banks offered harmonized multi-channel functionality. This figure stands in stark contrast to the number of European Corporates that indicated they would prefer managing treasury activities through multiple channels.

Corporates are now selecting and grading banks based on their ability to meet a full suite of business requirements, and the ability to transact and access information across multiple channels is now one of those core requirements. In the near future, questions about a banks multi-channel capabilities will certainly become staples of any complete banking services RFPs. When asked how important multi-channel access was when establishing a new relationship with a bank, nearly half of Corporates considered it very important.

On a scale of 1 5, 1 being not at all important and 5 being extremely important, if you were establishing a new relationship with a bank, how important would the availability of all three channels for reporting and transacting activity be in your decisi

5 - Extremely important, 26.0%

1 - Not at all important, 7.4% 2, 12.3%

3, 27.9% 4, 26.5%

Call to Action for Banks The explosion in tablet and smartphone device technology over the past few years has changed not only the way consumers interact with banks, but also the ways in which Corporates transact and view banking activity. Corporates have recognized the efficiency improvements and convenience that can be gained from leveraging multiple channels to conduct their banking. Widespread adoption of multiple channels to manage all aspects of banking activity appears to be inevitable, provided that banks can deliver in a consistent manner. The challenge for banks will not only be to develop solutions that can meet basic functional requirements within each channel, but also to develop harmonized online environments that standardize the way data is viewed and transacted across multiple channels. The growth in multi-channel usage represents an opportunity for all banks to improve user interfaces and meet a strong, growing demand from Corporate customers. Those banks that are proactive in adopting strong solutions that offer consistent, standardized functionality across channels will be able to easily differentiate themselves from those banks that have underestimated the value of a multi-channel offering to Corporates.

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2012 Treasury Strategies, Inc. All rights reserved.

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