Transaction Banking Survey 2017 - cgi.com GTNews Transaction Banking survey, which offers critical insight into the corporate-to-bank relationship. While 2016 ... , file formatting

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CGITransactionBankingSurvey2017

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Table of ContentsForeword 3

ClientExperienceandSatisfaction 5

ClientOverallSatisfaction 6

ReviewingBankingRelationships 8

BankProductsUnderReview 9

ChangesinBankingRelationships 11

ClientOverallSatisfactionwithSpecificServices 12

BankSelection 13

CorporatePractitionerPerspective 14

BankActivity 15

NumberofBankingPartners 16

BankingChannels 19

PreferredBankAccess 23

TypesofAccesstoBankServices 25

AreasforImprovement 24

Challenges 29

ChallengesFacedwhenIntegratingwithaBankforCashManagementServices 30

Serviceproviders 32

ChallengersforBanks 33

BarrierstoGrowth 34

ReviewingRelationships 36

DriversforChange 37

RatingPerformance 40

ScopeofService 41

FutureGrowthStrategy 43

Models 44

Businessstrategy 46

MobileAppServices 48

CompetitiveDifferentiation 49

ValueAddedServices 51

Otherpartnerships 54

Transactionservices 55

Security 56

PSD:TheRevisedDirectiveonPaymentServices 58

AbouttheSurvey 60

Conclusion 62

3

For the fifth year running, CGI is a proud sponsor of the GTNews Transaction Banking survey, which offers critical insight into the corporate-to-bank relationship. While 2016 survey results showed a dramatic drop in corporate satisfaction, this year the decline is bottoming out. Corporate satisfaction

remains low, but there is a growing sense of opportunity and greater clarity for corporate and transaction banks in finding the pathway to increased corporate satisfaction and loyalty.

Corporatesatisfactionremainsconstant,with54%verysatisfiedandsatisfiedwiththeircurrentbankingrelationshipsforthesecondyearrunning.However,therehasbeenan83%year-over-yeardropintheuseofnon-banksfromlastyear,andbankrelationshipsappeartobecontracting,comparedtotheincreaseinmulti-bankingwehaveseenoverthelastfewyears.Banksalsoseemtobemoreoptimisticandresponsivetotheneedsofcorporates,with43%nowstatingtheyareoperatingaglobalbankingmodel,comparedto31%ayearago.Thiscorporatepreferencetoremainwithtraditionalbanksandthestabilizationofmulti-bankingexpansionsendsaclearoptimisticmessagetobanks—butlesssofornon-banks.

However,whilecorporatesmaybeturningfromnon-bankcompetitors,halfofcorporatesareactivelyreviewingtheirbankrelationships,especiallysmalltomediumenterprises(SMEs)andlargemulti-nationalsforcost,technology,securityandservicereasons.Corporatesareseekingtodrivedowntheircostofbankingandconsolidaterelationships.Theyareseekinggreaterintegrationofservicesandimprovedreal-timecapabilities.Theirbanks’securityandreputationalcapabilitiesalsoareunderscrutiny,andtheycontinuetoseekbetterdigitalservicing.

Intermsofthecostofbanking,leadingbanksareinvestinginefficiencyinitiatives,especiallyinvanillaservices,todrivedowncostsandpassonthesavingstotheircustomerstoaddresshigherpricecompetitioninthemarket.Costreasonsaredriving66%ofcorporatestoreviewtheirbankrelationships.

Whencomparingkeybankrelationshipfactorswithbankperformanceratings,webegintoseesomeclearmessagesaboutthepathwaytoimprovedcorporatesatisfactionandloyalty.Intermsofsecurity,technologyandservicefactors,

oneinthreecorporatesdonotconsidertheirbankstobeperformingexcellentlyorverywell.Currentprovisionoftechnologyservicesshowsthebiggestdisappointmentamongcorporates.Ofgreaterconcern,basedonthisyear’sresults,isthemismatchbetweenwhatcorporatesandbanksviewaspriorities.Consequently,thisyear’ssurveyprovidesvaluableinsightforbankswhowanttoreprioritizetoincreasecorporatesatisfaction.

Corporatesplaceabank’ssecurityrecordandfinancialcrimecapabilitiesatthetopoftheirlistforbothexistingandnewbankrelationships.Givenwellknownsecuritybreachesandfines,aswellasthemovetoopenbankingandnewregulations,89%ofcorporatesratebanksecuritycapabilitiesandtrackrecordsasthemostcriticalfactorintheirexistingbankrelationships;yetonly43%ofbanksviewsecurityasasourceofdifferentiation.Bothcorporatesandbanksviewsecurityasamutualresponsibility,andcorporatesarelookingforamuchmoreproactivesecurityapproachfrombankstoprotectthesystemasawhole.Aswemovetoreal-timepayments,corporatesbelievetheroleofbanksinensuringend-to-endsecurityissignificantlyincreasing,sothisisakeytimetodiscusssecuritywithcorporates.

Theprioritymismatchcontinueswhenwelookattechnologyfactorsimportanttocorporatesintheirbankrelationshipsandthebanks’perspective.Overthelasttwoyears,corporateshaveplacedgreatvalueontheharmonizationofstandardsamongbanks.Thisyearisnodifferent.Over50%ofcorporatesreportmajorchallengesinonboarding,fileformattingandprocessintegrationwithnewbanks.While62%ofbanksrecognizeeaseofintegrationasasourceofcompetitivedifferentiation,only29%viewconformancewithindustrystandardsassuch.Forty-fourpercentofbanksviewthestreamliningofonboardingandentitlementservicesasapriorityinvestmenttodrivenewrevenue.Whilebanksmayviewindustry-widestandardizationasenablinggreaterswitching,thevoiceofcorporatesisclear,andthetimetoactisnow.

Integrateddigitalservicingcontinuestofallshortofcorporateexpectations.Manybanksaremakingaseriousinvestmentinnewportals,and50%ofcorporatesreportthattheyareofferedmulti-servicesportals.Another37%percentbenefitfromportalsthatdeliverservicesacrossmultiplebanks.Onlineserviceuseandpreferencearenotfollowing.Ifwelookattheprovisionofmulti-servicesonline,weseethatmanyindividualservicesarenotcurrentlyintegratedintothisenvironment.Inwhichcasethetreasurer’sdesireforintegratedworkingcapitalmanagement,forexample,cannotbemet.Likewise,theprovisionoftradefinanceinamulti-serviceonlineenvironment

Foreword

4

isverylowat28%.Howcanthetreasurerconductintegratedsupplychainfinanceinthisinstance?Drivingaclient-centricapproachtoportals,withtheinclusionofrelatedservices,isnowcritical.

Bankproductsatisfactionthisyearispoor,especiallyintermsofSMEs,withonly25%consideringproductservicesasexcellentorverygood.Satisfactionwithreal-timepaymentsisbelow40%acrossallgeographies-aclearwarningsigntobanksthatvalue-addservicesareneededoverandabovetransactionalvanillaservices.Corporatesthathaveturnedawayfromnon-banksarenowlookingforalternativelendingandsupplychainplatformsfromtheirbanks.Multi-nationalsandSMEs,inparticular,arelookingforenhancedworkingcapitalmanagementservices.Banksappeartoberesponding,apartfromofferingnewlendingoptions.

Corporatesalsoarelookingforothervalueadd-services-anareawherebankscangeneratenewrevenuestreams.Thehighestratedvalue-addservicefromcorporatesisbanksupportinunderstandingupcomingregulationsandchanges.Thisservicealsosawthebiggestdelta;while62percentofcorporatesratedthisasapriorityvalue-addservice,only39percentofbankswerealigned.

Interestingly,thesecondlargestdiscrepancybetweencorporateandbankprioritieswassecurityadvisoryservices.Thirty-threepercentofcorporatesviewtheseasapriorityareaforinnovation,whileonly16%ofbanksagree.Thereisclearlyanopportunitytoaddmorevalue-addservicesandtobenefitfromtherevenuestreamsassociatedwiththem.Bankvalue-addserviceinnovationmustbehighontheagenda.

Thegoodnewsisthatbanksarealignedwiththeircustomerswhenitcomestotheimportanceofinnovation.Corporatesare

demonstratingarealinterestinreceivingsupportinleveragingnewtechnologiessuchasblockchain.Blockchainisthesecondtopratedvalue-addserviceamongcorporatesandthehighestratedinnovationareaamongbanksintermsofitspotentialforgeneratingnewrevenue.Moreover,banksarebeginningtosupporttheircustomersinthisarea,asthepercentageofbanksofferingopenAPIsmorethandoubledfrom15%to32%.

Overthepastfiveyears,theresultsofthiscriticalmarketsurveyofcorporate-to-bankrelationshipshasprovidedimportantinsightonhowthemarketischanging,actionsthatbanksshouldtakeinresponse,andthemountingfrustrationfromcorporateswhenitcomestothedelayedchangeinthebankingsystemthatservesthem.Inthisyear’sresults,weseemuchmoreclearlythatcorporateexpectationsarematuring.Overthenextthreeyears,corporateandtransactionbankswill,onaverage,increasenewtechnologyinvestmentby24%totransformtheirbusinesstobecomecustomercentric.Nowisthetimetoensurethatthisinvestmentinafullytechnology-enabledbusinesscoverstheareasessentialfordrivingcorporatesatisfactionandloyalty.

CGIisaworldleaderinconsulting,systemsintegration,outsourcingandsoftwaretowholesalebanksaroundtheworld.Wehopeyoufindthisreportofvalueinhelpingyoutoprioritizeinitiativesthatpromotesuccess.Ifyouwouldliketodiscussthisresearchandhowwecansupportyou,[email protected]

Jerry NortonSenior Vice President, Global Financial ServicesCGI

Foreward

55

ClientExperienceandSatisfaction

6ClientExperienceandSatisfaction

Client Overall Satisfaction

Intoday’sincreasinglychallengingregulatoryenvironment,andwithaplethoraofnewdigitalproductsenteringthemarket,itiscrucialforcorporatetreasurerstomaintainastrongrelationshipwiththeirbankingpartners.Thischallengingclimateequallymeansthattreasurersneedtodemandmorefromthosebankingpartners,namelymoreadvancedsolutionsalongsidethetraditionalservicestheyreceivefromtheirbanks.

Althoughwesawalargefallincorporates’satisfactionwiththeirmainbankingfrom2015to2016,andtherehasbeennoregainingofgroundinthisarea,itdoesappearthattheincreaseindisapprovalhasbeenarrested.

Overall Satisfaction with Service Provided by Main Banking Partners(Percentage Distribution of Corporate Practitioners Rating Service ‘4’ or ‘5’ on a 5-point scale)

Overall,satisfactionfortheserviceprovidedbymainbankingpartnersamongcorporatepractitionersisalmostthesameaslastyear,withjustoverhalf(54%)ofcorporatepractitionersratingtheservicetheyreceive‘4’or‘5’ona5-pointscale(where‘1’wasnotatallsatisfiedand‘5’wasverysatisfied).Lastyearthefigurewas55%.Althoughthismarksanotherdecreaseinoverallsatisfactionwithbankingpartners’service,thisdecreaseisfarsmallerthanwhatwasrecordedbetween2015and2016,whenoverallsatisfactionfell13percentagepointsfrom68%to55%.

Highly satisfied (service rated '4' or '5')

54%46%

Less than highly satisfied (service rated '1', '2' or '3')


Overall Satisfaction with Service Provided by Main Banking Partners(Percentage Distribution of Corporate Practitioners Rating Service)

Corporateswithannualrevenuesofmorethan$5bnaremorethantwiceaslikelyasbothsmallerandmid-sizedfirmstoratetheirsatisfactionwithbankingpartners’servicesasa‘5’.Where17%oftheselargerbusinessesratedtheirsatisfactionwithbankingpartnersasa‘5’,just7%ofsmallercorporates(thosewithannualrevenuesoflessthan$500mayear)and4%ofmid-sizedcorporatetreasurers(thosewithanincomeofbetween$500mand$4.9bnayear)didso.

Mid-earningcompaniesaretheleastlikelygroupbyearningstoratetheservicetheyreceiveasverysatisfactory,thisisthelowestofanydemographicsurveyedalongsidepubliclyheldcompanies.

Publicorganisationsandmediumincomecompaniesarealsomorelikelytoratetheirsatisfactionthelowestofall,with8%and7%respectivelyratingtheirbankingpartners’servicea‘1’.

On a scale of 1 to 5, how satisfied are you with the service your organization receives from its main banking partners?

Value All <$500M $500M-$5BN >$5BN Public PrivateAsia

PacificNorth

AmericaWesternEurope

5(verysatisfied) 7% 7% 4% 17% 4% 8% 10% 8% 9%

4 48% 37% 63% 44% 50% 47% 50% 48% 45%

3 39% 43% 33% 39% 33% 37% 36% 40% 40%

2 3% 7% 0% 0% 4% 3% 0% 2% 2%

1(notatallsatisfied) 4% 7% 0% 0% 8% 5% 4% 2% 4%


Reviewing Banking Relationships

Review of Strategic Relationship with Main Banking Partner(Percentage of Corporate Practitioners)

Yes

50%50%

No

Overall,in2017exactlyhalfofcorporatesarereviewingtheirorganization’sstrategywiththeirmainbankingpartners,andhalfarenot.Farmorecorporatesarechoosingnottoreviewtheirstrategythisyear,markinga12-pointincreaseon2016’sfigure.

Review of Strategic Relationship with Main Banking Partner(Percentage Distribution of Corporate Practitioners)

Overwhelminglyso,higherincomeorganizations(thosewithannualincomeofmorethan$5bnayear)aremostlikelytobereviewingtheirstrategicrelationshipwiththeirmainbankingpartner–nearlythree-fourths(72%).Aslargerorganizationsare,aswefoundintheprevioussection,generallymoresatisfiedwiththeservicetheyreceivefromtheirbankingpartners,itcouldbeinferredthatregularstrategicreviewwithmainbankingpartnersleadstogreatersatisfactionwiththeservicetheyprovide.

BusinessesbasedinNorthAmericaandpubliclyheldorganizationsarealsomorelikelythantheaveragetobereviewingtheirstrategicrelationshipwiththeirmainbankingpartners,with60%and58%oftheserespondentsselecting‘yes’respectively.

Are you reviewing your organization’s strategy with your main banking partners?


PacificNorth


Yes 50% 53% 44% 72% 58% 50% 54% 60% 53%

No 50% 47% 56% 28% 42% 50% 46% 40% 47%


Bank Products Under Review

Bank Product Areas Under Review(Percentage of Corporate Practitioners Planning to Assess Current Relationships with their Main Banking Partners)

Aswasthecaselastyear,cash management servicesisthebankproductareamostlikelytobeunderreview,with70%ofcorporateshighlightingthis.However,thisisaten-pointreductiononlastyear’sfigures.Nearlytwo-thirds(65%)ofrespondentsselectedpayments,anewoptionforthisyear’ssurvey,asthebankproductareasecondmostlikelytobeunderreview.

Theremainingoptionstrackreasonablycloselywiththeirpositionslastyear,withtheexceptionofpayables.Thenumberofcorporatesselectingthisfellathird,from42%in2016to28%thisyear.

Inaddition,theproportionofcorporatesselectingcredit/lendingforreviewalmosthalved,from39%lastyearto20%thisyear.Andinanotherdramaticfinding,Investment banking/capital marketsclimbedfromtheleastcitedbankproductlastyear,selectedby17%ofcorporates,to24%thisyear.

0% 10% 20% 30% 40% 50% 60% 70% 80%

Other

Forecasting

Depository services

Open account (supply chain financing)

Credit / lending

Investment banking / capital markets

Payables

Receivables

Trade finance (letters of credit, collections)

Reporting

FX (including hedging)

Liquidity solutions (including pooling / netting)

Payments

Cash Management Services 70%

65%

48%

45%

33%

30%

29%

28%

24%

20%

19%

18%

18%

3%


Bank Product Areas Under Review(Percentage of Corporate Practitioners Planning to Assess Current Relationships with their Main Banking Partners)

Nearlyalllargercompanies(thosewithanannualincomeinexcessof$5bn)arereviewingtheircash management services,with89%ofrespondentscitingthis.Ontheothersideofthespectrum,57%ofsmallerbusinesses(thosemakinglessthan$500mayear)arereviewingthisbankproduct.

Largerorganizationsarealsomorelikelytobereviewingtheirliquidity solutions, FX and investment banking/capital marketsthanotherorganizations.

What bank product areas are you reviewing?


PacificNorth


Payments 65% 60% 63% 67% 46% 68% 66% 60% 68%

Tradefinance(letterofcredit,collections

30% 27% 26% 44% 29% 32% 38% 33% 30%

Openaccount 19% 13% 19% 28% 13% 21% 22% 21% 19%

CashManagementServices 70% 57% 78% 89% 71% 68% 68% 81% 77%

Reporting 33% 33% 44% 33% 38% 40% 36% 40% 36%

Payables 28% 23% 33% 28% 25% 29% 36% 35% 28%

Receivables 29% 23% 41% 28% 21% 32% 38% 35% 28%

LiquiditySolutions(includingpooling/netting)

48% 50% 33% 72% 50% 47% 52% 54% 53%

Depositryservices 18% 17% 26% 17% 13% 24% 20% 17% 21%

Investmentbanking/capitalmarkets

24% 20% 22% 33% 13% 26% 16% 25% 13%

Credit/lending 20% 20% 22% 28% 13% 29% 24% 21% 23%

FX(includinghedging) 45% 37% 52% 78% 50% 45% 58% 54% 57%

Forecasting 18% 13% 26% 22% 4% 24% 18% 27% 19%

Other(pleasespecify) 3% 3% 4% 0% 0% 5% 0% 2% 2%

Noneoftheabove 10% 13% 7% 0% 13% 11% 8% 4% 4%


Changes in Banking Relationships

Overall,corporatesaremorelikelytohaveincreasedthenumberofbankingrelationshipstheyhaveovertheprevious12monthstoJune2017thantheywereinthesameperiodtoJune2016.Therewasaten-percentagepointincreasehere.Thepercentageofcorporatesthatdecreasedthenumberoftheirbankingrelationshipsfellmodestlycomparedwithlastyear,from19%to15%.Intotal,halfofallcorporatetreasurerssurveyedsawnochangetothenumberofbankingrelationshipstheyhadoverthelastyear.

Changes in Bank Relationships in the Past 12 Months(Percentage Distribution of Corporate Practitioners)

Privatebusinessesaremorelikelytohaveincreasedthenumberofbankingrelationshipstheyhavethantheirpubliccounterparts.Acrossincomebands,smallercompanies(thosewithanannualincomeoflessthan$500m)aretheleastlikelytohavedecreasedtheirnumberofbankingrelationships,withjust7%sayingthisisthecasecomparedto22%ofbothmid-sizedandlargerorganizations.

Largercorporates(thosewithannualincomesofmorethan$5bn),aswellascorporateswhosetreasuriesoperateinNorthAmericaandWesternEurope,arefarmorelikelytohaveincreasedtheirnumberofbankingrelationshipsoverthelast12monthsthantheywereoverthesameperiodlastyear.Where14%oflargercorporatesincreasedthenumberofbankingrelationshipstheyhadinthe12monthsfromJune2015-16,morethantwicetheproportiondidinthe12monthsfromJune2016-17,at33%.

InNorthAmerica,theproportionoforganizationsthathadincreasedthenumberofbankingrelationshipstheyhaveoverthelast12monthsmorethandoubledfrom21%to44%,andinWesternEuropethepercentagerosefrom21%to34%.

How has the number of bank relationships in your organization changed


PacificNorth


Increased 35% 33% 37% 33% 25% 32% 38% 44% 34%

Decreased 15% 7% 22% 22% 25% 11% 18% 17% 19%

Unchanged 50% 60% 41% 44% 50% 58% 44% 40% 47%


Client Overall Satisfaction with Specific Services

Overall,thelevelofsatisfactionwithbankingpartnersforarangeofdifferentserviceshasnotchangedsignificantlyfromlastyear.Thechartbelowillustratestheproportionoffinancialprofessionalsthatratedtheirpartners‘excellent’or‘good’ineacharea.

Overall Satisfaction Provided by Main Banking Partners for Each Service(Percentage of Corporate Practitioners Rating Service as “excellent” or “good”)

Whenitcametoratingtheirsatisfactionwithspecificservices,mostcorporates(52%)ratedpaymentseither‘excellent’or‘good’.Closebehindwascash managementservicesandliquidity services,eachwith49%ofcorporatesratingthem‘excellent’or‘good’.Corporatepractitionerswereleastsatisfiedwithforecastingservicesofthe14optionspresented,asjustaquarterratedthis‘excellent’or‘good’.

0% 10% 20% 30% 40% 50% 60%

Forecasting

Open account services (supply chain financing)

Depository services

Investment banking / capital markets capabilities

Receivables

Real-time payments

Payables

Reporting



Credit / lending

Liquidity services (including pooling / netting)

Cash Management Services

Payments 52%

49%

49%

48%

43%

41%

41%

40%

38%

38%

33%

32%

29%

25%

1313

BankSelection

14BankSelection

Corporate Practitioner Perspective

Thechartbelowillustratestheproportionofcorporatesthatratedthelevelofvalueforeachfactor‘veryimportant’or‘quiteimportant’.

Thepictureherelooksalittledifferentfromlastyear.In2016securitywasthefactorconsideredmostimportanttocorporatepractitionerswhenestablishinganewbankingrelationship(87%),thisyearthatoption’scounterpartsecurity and financial crime policies and capabilitieswasthethirdmostconsideredfactor,with81%selectingit,representingafallofsixpercentagepoints.

Factors Considered When Organizations Establish a Banking Relationship(Percentage of Organizations Rating the Level of Value ‘very important’ or ‘quite important’)

Themostselectedfactorthisyearwasselecting the best-in-class providers of products or services,whichwascitedby89%ofcorporates.Highly efficient and integrated technology systems and processeswasonceagainconsideredthesecondmostimportantfactortoorganizationsestablishingabankingrelationship,with87%ofcorporatesselectingthis.

Notably,theproportionofbusinessesconsideringselecting a provider that best supports the organization from a strategic standpointa‘veryimportant’or‘quiteimportant’factorwhenestablishinganewbankingrelationshipfell10percentagepoints,from85%in2016to75%thisyear.

0% 20% 40% 60% 80% 100%

BankCorporate

Other

Access to third party non-bank services

Allocating bank services in proportionto credit facilities

Expected digital customer experience

Selecting the lowest cost providersof products or services

Historical relationship between thebank and the organization

Credit facilities offered in additionto transaction services

Geographic footprint of the bank

Selecting a provider that offers strategic financial and market advice

Security and financial crime policies and capabilities

Highly efficient, real-time and integratedtechnology systems and processes

Selecting the best-in-class providersof products or services

89%88%

87%82%

81%84%

75%80%

67%61%

65%77%

57%61%

52%42%

51%75%

50%57%

28%38%

43%50%

1515

BankActivity

16BankActivity

1

34%

24%

8%

21%

13%

2-5

6-10

11-20

21+

Number of Banking Partners

Thenumberofbanksatreasurerworkswithwilldependonmanyfactors,includingavailabilityofcredit,geography,andtheservicesoffered.Treasurersmustadditionallyconsidercounterpartyrisk,whichcanbemitigatedbydiversifyingbankaccountrelationships,andalsosecurity.

Althoughmorecorporatepractitionershaveincreasedthenumberofbankstheyworkwithonaregularbasis,thenumberofbankingpartnerstreasurershavetodayislargelythesameasitwaslastyear.Morethanonethird(37%)ofcorporateshavebetweensixand20bankingrelationships,exactlythesamepercentageaslastyear,while34%areworkingwithtwotofivebanks,comparedwith36%lastyear.

Number of Banks Organizations Work With on a Regular Basis(Percentage Distribution of Corporate Practitioners)

Justone-fifth(21%)ofrespondentsworkswith21ormorebanks.Half(50%)ofthecorporatepractitionerswithmorethan$5bnannualincomemaintain21ormorebankingrelationships.

17BankActivity

Number of Banks Organizations Work With on a Regular Basis(Percentage Distribution of Corporate Practitioners)

Unsurprisingly,aswasthecaselastyear,largercorporates,orthosethathaveagreaterannualrevenue,tendtohavemorebankingrelationships.Privatelyheldbusinessesalsohavemorebankingrelationshipsthantheirpubliclytradedcounterparts.

How many banks does your organization work with on a regular basis?


PacificNorth


1 8% 20% 0% 0% 8% 13% 8% 4% 4%

2-5 34% 47% 33% 5% 17% 40% 20% 21% 26%

6-10 24% 17% 44% 28% 29% 29% 32% 40% 30%

11-20 13% 7% 7% 17% 13% 8% 12% 8% 13%

21+ 21% 10% 15% 50% 33% 11% 28% 27% 28%

18BankActivity

Centralized Treasury Functions

Fortreasurers,thedecisionofwhethertocentralizeordecentralizecertainfunctionshingesonwhatmodeloffersthemostefficiencyforthem.Somefunctionsmaybenefitfromhighlyspecialized,localknowledge,allowingcorporatestomakequickerdecisionsasconditionschange.Functionssuchasthesewouldbenefitfromdecentralization.

However,centralizedfunctionsallowforeconomiesofscale,ensuringeffortisnotduplicatedacrosstreasuryoperations.Thepriceofthesegainsinefficiency?Greatertechnologicalcapabilities.

In2016thethreemostcommonlycentralizedtreasuryfunctionsamongcorporatepractitionerswereFX(77%oforganizationswerecentralizingthistreasuryfunction),risk management(74%)andcash pooling/netting(71%).ThisyearFXfellintofourthpositionofthe12optionsavailable,with70%ofcorporatepractitionerscentralizingthefunction.

Takingitsplaceasthemostcommonlycentralizedtreasuryfunctionwasinvestment services,citedby74%oforganizations,up12pointsfromlastyear.

Centralization and Decentralization of Treasury Functions(Percentage of Corporate Practioners)

Thetreasuryfunctionsthataremostlikelytobedecentralizedarepaymentreconciliation,citedby49%ofcorporates,andaccountsreceivablealsocitedby49%oforganizations.Thiswasalsothecaselastyear(54%and51%respectively).

0% 20% 40% 60% 80% 100%

Not applicable / Do not use Decentralized / regionalized Centralized

Supply chain finance

Trade finance

Accounts receivable

Payment reconciliation

Credit services

Accounts payable

Regulatory reporting

Forecasting

FX

Risk management

Cash pooling / netting

Investment services 74%

73%

72%

70%

66%

61%

52%

49%

45%

41%

40%

29%

8%

11%

19%

14%

30%

32%

41%

24%

49%

49%

22%

20%

18%

16%

9%

16%

4%

7%

8%

28%

7%

10%

38%

51%

1919

BankingChannels

20BankingChannels

Banking Channels

Corporatesmayuseavarietyofdifferentchannelstoaccesstheirbankingpartners’services,whichcanbechallenginginitself,astheymustaccessmultiplebanksviaseparatechannels,ormultipleproductsfromasinglebank(orlikelyboth).Eachofthesechannelswillrequestdifferentcredentialsfromtheuser,introducinginefficiencieswheretheneedtocompleteatime-sensitivetransactioniscritical.

Aswasthecaselastyear,corporatesmostcommonlyuseasingle integrated bank portal providing access to multiple services from a single bank providertoconnectwithoraccesstheirbank.Morethanhalf(54%)corporatesusethismethod,eightpercentagepointsthanlastyear.

Channel Used When Connecting/Accessing Banks(Percentage of Corporate Practitioners)

Overtakinghost to host connections, via SWIFT solutionandtreasury workstationasamainchannelforaccessingbanksthisyearismultiple portals. 58%morecorporatesareusingmultiple portalstoconnecttotheirbanksthisyearthantheywerelastyear(38%vs24%).

Meanwhile,aboutathirdoftreasurersareusingSWIFTsolutions,hosttohostconnectionsandtreasuryworkstationstoaccesstheirbanks.TheproportionoftreasurersusingSWIFTsolutions(whichoffercorporatestheabilitytoexchangefinancialmessageswithwhicheverbankstheyplease)hasn’tmovedsincelastyear,buttheproportionofthoseusingthelattertwohasincreased,from24%to33%forhosttohost,andfrom24%to32%fortreasuryworkstation.

0% 10% 20% 30% 40% 50% 60%

Third-party aggregator

Paper based / fax

Service bureau

Mobile apps

Single integrated bank portal providing access to services from multiple bank providers

Treasury workstation

Host to host connections

Via SWIFT solution

Multiple portals (separate channels for specific services at the same bank)

Single integrated bank portal providing access to multiple services from a single bank provider 54%

65%

38%

33%

33%

32%

19%

24%14%

14%

13%

7%

21BankingChannels

Channel Used When Connecting/Accessing Banks(Percentage Distribution of Corporate Practitioners)

Thechannelsusedbydifferentsectionsofthesamplevariedgreatly.Forexample,largercompaniesarefarmorelikelythansmallerorganizationstouseasingle integrated bank portal providing access to service from multiple bank providers.TheyarealsomorelikelytouseaSWIFT solution,orhost to host connections.Understandably,largerorganizationsareusingmoreofthesechannelsthansmallercompanies.

Which of the following channels do you use to access or connect with your bank(s)?


PacificNorth


Singleintegratedbankportalprovidingaccesstomultipleservicesfromasinglebankprovider

54% 70% 37% 56% 33% 61% 40% 48% 43%

Singleintegratedbankportalprovidingaccesstoservicesfrommultiplebankproviders

19% 10% 22% 33% 13% 21% 18% 25% 19%

Multipleportals(separatechannelsforspecificservicesatthesamebank)

38% 27% 52% 39% 29% 47% 48% 44% 40%

ViaSWIFTsolution 33% 30% 22% 56% 33% 37% 34% 33% 34%

Treasuryworkstation 32% 10% 48% 50% 29% 37% 40% 40% 40%

Hosttohostconnections 33% 17% 30% 56% 38% 32% 36% 35% 38%

Paperbased/fax 13% 13% 11% 17% 8% 21% 18% 10% 11%

Mobileapps 14% 17% 22% 6% 17% 18% 12% 10% 6%

Third-partyaggregator 7% 10% 7% 6% 8% 11% 8% 4% 4%

Servicebureau 14% 23% 7% 17% 13% 21% 14% 15% 17%

2222

PreferredBankAccess

23PreferredBankAccess

Preferred Bank Access

Aswasthecaselastyear,thecorporates’mostpopularmethodofaccessingbanksisthroughasingle integrated bank portal that provides access to services from multiple bank providers.Justoverafifth(22%)oforganizationsselectedthisastheirpreferredbankaccessmethod.However,morethanathird(34%)ofcorporatesselecteditlastyear.

Fallingalittleoutoffavourfromlastyear,single integrated bank portal providing access to multiple services from a single bank providerwasselectedby19%ofcorporatesthisyear,comparedwith24%in2016.

Whichmethodsarestealingsharefromsingle integrated bank portal providing access to services from multiple bank providers?Manymorecorporatespreferhost to hostconnectionstoanyotherbankaccessmethodwhencomparedwithlastyear.Theproportionoforganizationsselectingthismethodastheirpreferrednearlyquadrupledfrom3%lastyearto11%thisyear.Similarly,theproportionofcorporatesselectingtreasury workstationastheirpreferredbankaccessmethoddoubledfrom7%in2016to14%in2017.

Preferred Bank Access Methods(Percentage Distribution of Corporate Practitioners

Single integrated bank portal providing access to services from multiple bank providers

20%

19%

22%

11%

5%

4%4% 3%

14%

Via SWIFT solution

Single integrated bank portal providing access to multiple services from a single bank provider

Treasury workstation

Host to host connections

Service bureau

Multiple portals (separate channels for specificservices at the same bank)

Mobile apps

Third-party aggregator


Preferred Bank Access Methods(Percentage Distribution of Corporate Practitioners)

Thistableshowsthatwhereassmallerorganizations(thosewithanannualrevenueoflessthan$500m)aremorelikelytofavourusingasingle integrated bank portal providing access to multiple services from a single bank provider,largercompanies(withanannualrevenueofatleast$5bn)prefer–byfar–a single integrated bank portal that provides access to service from multiple bank providers.

Largercorporatesarealsomorelikelytopreferusinghost-to-hostconnectionswhenconnectingwiththeirbanks–justunderaquarter(24%)selectedthismethodastheirpreferredoption.Forthesebusinesses,withannualturnoverofatleast$5bn,themostpreferredwayofconnectingtothebanksisviaSWIFT solution,with29%citingthismethod.

Whencomparingpreferencesacrossgeographies,SWIFT solutionsemergeasbyfarthemostpopularmethodofconnectingwithbanksinNorthAmericaandWesternEurope,with28%oforganizationsinbothregionsselectingitastheirfavourite.TwopreferredmethodscametopofthepileinAsiaPacific–viaSWIFT solutionsandsingle integrated bank portal providing access to services from multiple bank providers–eachcitedby25%oforganizationsinthisregion.

OrganizationsinNorthAmerica,comparedwiththoseinAsiaPacificorWesternEurope,prefertousetheirtreasury workstationstoconnectwiththeirbanks–19%citedthisinNorthAmerica,comparedwith8%forAsiaPacificand11%forWesternEurope.

Publicorganizationsaremorethantwiceaslikelyastheirprivatelytradedcounterpartstoprefertouseatreasury workstationasabankaccessmethod(17%ofpubliccompaniesciteditastheirpreferredmethod,comparedwith8%ofprivatecompanies).

Which of these would be your preferred method to access your bank(s)?


PacificNorth


Singleintegratedbankportalprovidingaccesstomultipleservicesfromasinglebankprovider

19% 30% 19% 6% 21% 19% 13% 13% 19%

Singleintegratedbankportalprovidingaccesstoservicesfrommultiplebankproviders

22% 20% 19% 24% 17% 22% 25% 19% 21%

Multipleportals(separatechannelsforspecificservicesatthesamebank)

4% 7% 0% 6% 4% 5% 0% 4% 2%

ViaSWIFTsolution 20% 13% 19% 29% 21% 16% 25% 28% 28%

Treasuryworkstation 14% 3% 27% 6% 17% 8% 8% 19% 11%

Hosttohostconnections 11% 13% 4% 24% 13% 14% 17% 9% 11%

Mobileapps 4% 3% 8% 0% 4% 5% 4% 0% 0%

Third-partyaggregator 3% 3% 0% 0% 0% 5% 2% 2% 2%

Servicebureau 5% 7% 4% 6% 4% 5% 6% 6% 6%


Types of Access to Bank Services

Onceagain,oftheoptionsgiveninthesurvey,mobileisthemostwidelyprovidedmethodofaccesstocorporateclients,with58%ofbankingservicesprovidersofferingittotheirclients.However,itappearsgrowthinthisareahasstalled–59%ofbankssaiditwaspartoftheirpackagelastyear.

Theproportionofbanksprovidingsingle sign-onasatypeofaccessfortheircorporateclientsincreasedbysevenpercentagepointscomparedwithlastyear,from44%to51%.Thisovertakeslastyear’ssecondplacetypeofaccesstobankservices,integrated (one portal for the bank for all services),whichclimbedmodestlyfrom47%lastyearto50%thisyear.

Types of Access to Online Services Offered to Corporate Clients(Percentage of Banking Services Providers)

TheproportionofbanksofferingopenAPIsaccesstoservicesmorethandoubledfromlastyear’sfigure,from15%to32%.ThisislikelyareactiontotheintroductionofPSD2,whichmandatesthatbanksmakecustomerdataavailabletonon-bankpaymentplayers,withaviewtoincreasingcompetitionandchoiceinthefield.

APIswillplayalargeroleinenablingthisdevelopment,whichisexpectedtobringusclosertoanopenbankingstandard.APIs,orapplicationplanninginterfaces,makeiteasierforsoftwareprogrammestotalktoeachother,andcanprovideaccesstoanorganization’sdataandservices.Whatthismeansfortreasurersisfasterconnectivity,andreal-timevisibilityofbankingactivityontheirtreasurymanagementsystems.

Theproportionofbankingservicesprovidersnotprovidingonlineaccessatallfellslightly,from6%to5%.

0% 10% 20% 30% 40% 50% 60%

Do not provide online access

Separate sign-on (for specific services)

Open APIs

Integrated (shared multi-bank portal access)

Integrated (one portal for the bank for all services)

Single sign-on

Mobile

32%

28%

5%

37%

50%

51%

58%

2626

AreasforImprovement

27AreasforImprovement

Aswehavealreadyfound,themajorityofcorporatesishighlysatisfiedwiththeservicesoftheirbankingpartners.Butdotheybelievethereareanyopportunitiesforbankstoimprovetheirofferings?

Forthethirdyearrunning,harmonization of standards between bankswasthemostcommonlydesiredareaforimprovement,thoughtoagreaterdegreethisyear–wherehalf(50%)ofcorporatepractitionersselectedthisasanareaforimprovementlastyear,60%oforganizationsciteditthisyear.

Desired Areas of Improvement for Banks(Percentage of Corporate Practitioners

0% 10% 20% 30% 40% 50% 60%

Additional services (please specify)

Proactive guidance and advice

Integrated forecasting

SWIFT connectivity

Availability of online and mobile tools

Greater support in service onboarding,including set-up and data input

Geographic coverage

Automated payment remittance andreceivables tracking and reconciliation

Single integrated point of entry for all services

Seamless integration of corporateto bank processes

Integration of data from many banks

More timely information (e.g., real time instead of next day)

Harmonization of standards between banks

25%

5%

26%

30%

30%

31%

33%

43%

43%

46%

53%

53%

60%

28AreasforImprovement

Integration of data from many banksisseenasfarmoreimportantasanareaforimprovementthisyearcomparedwithlast.Where36%selecteditin2016,morethanhalf(53%)didsothisyear,thejointsecondmostcitedareaforimprovementinthisyear’ssurvey,alongwithmore timely information.

Thisincreaseintheproportionofcorporatesviewingintegrationofdataasanimportantareaforimprovementmaysuggestthattreasurershaveabetterunderstandingofthepotentialofdata,orthattheyareclosertorealisingthepotentialbigdataholds.Theabilitytoderivemeaningfulinsightsfromdataisakeydifferentiatoramongbusinessesacrossallsectors,offeringgainsinefficienciesandcuttingorganizationalcosts.

Forthetreasurer,havingaccesstodifferentdatasetsandameansforanalysingtheminrealtimecanmakeforecastingvastlymoreaccurate.

Desired Areas of Improvement for Banks(Percentage of Corporate Practitioners)

Harmonization of standards between banksismoreofaconcernforlargercompanies.Infact,thelargertheorganization,themorelikelyitistocitethisasadesiredareaofimprovement.

What would most improve your banking services?


PacificNorth


Moretimelyinformation(e.g.realtimeinsteadofnextday)

53% 57% 52% 50% 42% 58% 56% 48% 53%

Harmonizationofstandardsbetweenbanks

60% 53% 67% 72% 54% 71% 58% 67% 66%

Singleintegratedpointofentryforallservices

43% 47% 44% 33% 33% 58% 44% 50% 43%

Availabilityofonlineandmobiletools

30% 43% 22% 17% 29% 37% 26% 21% 19%

Geographiccoverage 33% 27% 30% 44% 25% 42% 42% 42% 40%

Integrationofdatafrommanybanks

53% 47% 59% 56% 46% 61% 52% 56% 49%

Seamlessintegrationofcorporatetobankprocesses

46% 37% 52% 56% 50% 45% 44% 50% 45%

Automatedpaymentremittanceandreceivablestrackingandreconciliation

43% 47% 41% 44% 25% 53% 46% 35% 32%

Proactiveguidanceandadvice

25% 27% 19% 33% 17% 26% 20% 21% 21%

Greatersupportinserviceon-boarding,includingset-upanddatainput

31% 27% 26% 50% 33% 32% 30% 27% 30%

SWIFTconnectivity 30% 20% 30% 44% 25% 34% 34% 33% 32%

Integratedforecasting 26% 23% 26% 28% 29% 26% 26% 27% 23%

Additionalservices 5% 3% 4% 11% 8% 5% 4% 4% 6%

2929

Challenges

30

Forcorporatepractitioners,thejointmostsignificantchallengesfacedwhenintegratingwithabankforcashmanagementservicesareease of integration into your environment and processesandKYC onboarding,eachcitedby56%oforganizations.

AlthoughtheproportionofcorporatescitingKYConboardingasachallengefellslightlyfrom60%lastyearto56%thisyear,ease of integration into your environment and processeshasemergedasachallengeformoretreasurersthisyearthanitwasin2016.Wherejustoverathird(34%)oforganizationsselecteditlastyear,thisroseby65%thisyear.

Challenges Faced When Integrating with a Bank for Cash Management Services(Percentage of Corporate Practitioners)

Challenges

Challenges Faced when Integrating with a Bank for Cash Management Services

File formatting issuesalsoemergedasagreaterchallengethisyearthanlastyear,withjustoverhalf(52%)ofcorporatesselectingitasoneoftheirbiggestchallengeswhenintegratingwithanewbankprovider,comparedwith45%lastyear.

0% 10% 20% 30% 40% 50% 60%

Other

Use of their security protocols and procedures

Ease of integration across and with your current banking providers

Testing procedures for new bank services including technology

Differences between what was sold versus what is to be implemented

File formatting issues

Ease of integration into your environment and processes

KYC onboarding 56%

56%

52%

42%

33%

33%

31%

4%

31Challenges

Challenges Faced When Integrating with a Bank for Cash Management Services(Percentage Distribution of Corporate Practitioners)

What are the biggest challenges you face when integrating with a new bank provider?


PacificNorth


Fileformattingissues 52% 40% 70% 44% 42% 50% 55% 56% 49%

Differencesbetweenwhatwassoldversuswhatistobeimplemented

42% 40% 37% 56% 42% 45% 43% 48% 43%

Testingproceduresfornewbankservicesincludingtechnology

33% 33% 33% 28% 13% 45% 33% 35% 32%

Useoftheirsecurityprotocolsandprocedures

31% 33% 26% 33% 21% 34% 29% 31% 30%

KYCon-boarding 56% 57% 48% 61% 54% 66% 63% 56% 66%

Easeofintegrationintoyourenvironmentandprocesses

56% 60% 59% 44% 50% 50% 49% 50% 47%

Easeofintegrationacrossandwithyourcurrentbank-ingproviders

33% 37% 19% 44% 25% 34% 29% 33% 32%

Other 4% 3% 0% 11% 8% 3% 4% 4% 6%

32Challenges

Service Providers

Weaskedcorporatepractitionerswhethertheywereusing,orconsideringusing,differenttypesoffinancialservicesbeyondtheirbanks.Oursurveyfocusedonfourdifferenttypesofnon-bankserviceproviders:FX providers, payment networks, supply chain finance, and on-boarding service providers.Foreachofthenon-bankservices,nomorethanaboutathird(37%)ofcorporateswerecurrentlyusing,orconsideringusingthem.

Non-bank Service Providers Used(Percentage of Corporate Practitioners)

Ofthesefouroptions,corporatetreasurersweremostlikelytobeusingnon-bank FX providers–17%oftreasurersarecurrentlyusingthis,with16%consideringusingitinthenext12monthsorlongerterm.However,afargreaterproportion,68%,isnotconsideringusingtheserviceatall.

Just9%ofrespondentsarecurrentlyusingnon-bankpaymentnetworks,though28%plantostartusingthisserviceinthenextyearorbeyond.Only1%ofrespondentssaidthattheywerecurrentlyusingnon-bankKYCandon-boardingserviceproviders.

0% 20% 40% 60% 80% 100%

Not consideringConsidering for the longer term

Will use in the next 12 monthsCurrently using

Non-bank KYC and on-boarding service providers

Non-bank supply chain finance

Non-bank payment networks

Non-bank FX providers

76%19%4%

1%

76%17%4%

63%7% 21%9%

3%

68%13%17%

3%

3333

ChallengesforBanks

34ChallengesforBanks

Ofthe14barrierstogrowthhighlightedinthesurvey,thosecentredaroundregulationwerethemostcommonlycited.Regulatory complexity in new countrieswasthemostcitedbarriertogrowthbybankingservicesproviders,withmorethanhalf(51%)selectingit,whileregulations in existing countrieswasselectedby47%ofbanks.

Greatest Barriers to Bank Growth(Percentage of Banking Services Providers)

Beyondregulatoryconcerns,systems limitations/scalability of current infrastructureemergedasasignificantconcern,with46%oforganizationsidentifyingitasabarrier,fourpercentagepointupfromlastyear.

Disruption, new entrants and/or changing business needs wasselectedbyslightlylessthan50%moreorganizationsthisyear(citedby22%in2016vs31%in2017).

Barriers to Growth

56% 0% 10% 20% 30% 40% 50% 60%

Other

Cross selling in existing client base

Access to skilled labour, e.g. digital talent

Changing or declining market demand

Discretionary funding / investment

Sales capability (availability,skills, training, tools)

Entry costs to new countries

Disruption, new entrants and/orchanging business models

Cost

Multiplicity of legacy channels/poor customer experience

Competition

Fragmentation / silo of technology solutions and platforms

Systems limitations / scalability of current infrastructure

Regulations in existing countries

Regulatory complexity in new countries

16%

4%

17%

18%

19%

22%

24%

31%

39%

39%

39%

42%

46%

47%

51%

35ChallengesforBanks

Greatest Barriers to Bank Growth(Percentage Distribution of Banking Services Providers)

What are the greatest barriers to your bank’s growth today?


PacificNorth


Entrycoststonewcountries 24% 24% 38% 23% 23% 27% 29% 30% 30%

Regulatorycomplexityinnewcountries

51% 53% 33% 62% 52% 57% 64% 63% 53%

Regulationsinexitingcountries

47% 39% 62% 45% 48% 41% 55% 50% 53%

Multiplicityoflegacychannels/poorcustomerexperience

39% 43% 48% 30% 31% 48% 34% 30% 30%

Systemslimitations/scalabilityofcurrentinfrastructure

46% 43% 48% 55% 45% 48% 46% 40% 43%

Fragmentation/silooftechnologysolutionsandplatforms

42% 45% 29% 43% 47% 34% 47% 45% 40%

Discretionaryfunding/investment

19% 10% 29% 26% 21% 16% 21% 20% 21%

Salescapability(availability,skills,training,tools)

22% 29% 14% 15% 16% 25% 14% 17% 13%

Crosssellinginexistingclientbase

16% 18% 19% 13% 14% 23% 16% 15% 11%

Disruption,newentrantsand/orchangingbusinessmodels

31% 29% 38% 36% 37% 27% 39% 35% 34%

Changingordecliningmarketdemand

18% 20% 29% 13% 24% 11% 17% 20% 16%

Competition 39% 49% 38% 36% 42% 41% 46% 35% 36%

Cost 39% 43% 48% 38% 37% 46% 42% 32% 36%

Accesstoskilledlabour,e.g.digitaltalent

17% 18% 24% 11% 11% 23% 13% 12% 13%

Other 4% 4% 0% 2% 4% 2% 5% 5% 3%

Comparingtheresponsesacrossincomebandsrevealssomestarkdifferencesinopinionaboutbarrierstogrowth,particularlybetweenmid-sizedcompanies(thosewithannualrevenuesofbetween$500mand$4.9bn),andsmallerandlargerbanks(whichrespectivelymakelessormorethanthisband).

Forexample,regulatory complexity in new countriesappearedtobeagreaterbarrierforthesmallerandlargerbanksthanformiddle-sizedorganizations.However,mid-sizedbanksaremorelikelytoseeregulations in existing countriesasabarrier,as62%oftheseorganizationscitedthiscomparedwith39%ofsmallerbanksand45%oflargerbanks.

Mid-sizedbusinessesarealsomorelikelytofindaccesstoskilledlabourabarrier–nearlyaquarter(24%)oftheseselectedaccess to skilled labour, e.g. digital talentasoneoftheirgreatestbarriers,comparedto18%ofsmallerorganizationsand11%oflargerones.

3636

ReviewingRelationships

37ReviewingRelationships

Costemergedasthemostsignificantreasonforreviewingbankingrelationshipsamongbothcorporatesandbankingservicesprovidersthisyear,withjustoverfour-fifths(81%)ofrespondentsselectingit.Thisisa19-pointincreaseonlastyear.

Thesecondmostcitedreason, bank stability and reputation,wasselectedbynearlytwo-thirds(62%)ofrespondents–adramaticincreaseonlastyearwhentheequivalentoption,bankstability,wasonlyselectedasadriverbehindbankingrelationshipreviewfor35%ofallorganizations.

Reasons for Reviewing Banking Relationships(Percentage of Corporate Practitioners and Banking Services Providers)

Sincelastyear,theproportionoforganizationsselectingimproving the integration of services into your systemshasfallenfivepointsfrom59%to54%.Onerespondentsaidthattheirbankingrelationshipswerealwaysunderreview.

Drivers for Change

0% 20% 40% 60% 80% 100%

Other

Leveraging non-bank services, e.g. blockchain

Forecasting

Lack of credit facilities

Concerns with security

Business growth outside of your current banks’geographic or industry coverage

Improving digital customer experience / service

Improving end-to-end real time capabilities

Simplifying or consolidating yourbanking relationships

Improving the integration ofservices into your systems

Bank stability and reputation

Cost

10%

10%

14%

19%

25%

33%

40%

46%

52%

54%

62%

81%


Reasons for Reviewing Banking Relationships(Percentage of Corporate Practitioners and Banking Services Providers)

What is driving you to review your banking relationships?


PacificNorth


Cost 81% 75% 92% 85% 86% 84% 82% 79% 80%

Bankstabilityandreputation

62% 56% 75% 69% 64% 63% 63% 62% 60%

Improvingdigitalcustomerexperience/service

40% 44% 50% 39% 43% 47% 48% 38% 36%

Improvingend-to-endrealtimecapabilities

46% 44% 42% 46% 36% 58% 44% 35% 44%

Improvingtheintegrationofservicesintoyoursystems

54% 63% 58% 46% 43% 68% 44% 55% 52%

Lackofcreditfacilities 19% 25% 17% 15% 7% 32% 22% 17% 20%

Businessgrowthoutsideofyourcurrentbanks’geographicorindustrycoverage

33% 31% 50% 39% 29% 42% 52% 41% 52%

Concernswithsecurity 25% 19% 33% 31% 14% 32% 19% 28% 20%

Simplifyingorconsolidatingyourbankingrelationships

52% 38% 42% 69% 50% 53% 48% 59% 52%

Leveragingnon-bankservices,e.g.blockchain

10% 6% 17% 15% 7% 16% 15% 10% 12%

Forecasting 14% 19% 25% 8% 14% 16% 11% 21% 16%

Other 10% 6% 8% 8% 14% 5% 11% 7% 8%


Costwasagreaterconsiderationformid-sizedcompaniesthanitwasfortheirsmallerandlargercounterparts,citedasadriverforbankingrelationshipreviewfornearlyall(92%)ofthisesurveyed.Smallerorganizationsaremorelikelytobedriventoreviewtheirbankingrelationshipsduetoalack of credit facilities–25%citedthis,comparedwith17%ofmid-sizedorganizationsand15%oflargerfirms.

Publiclyheldandprivatelyownedorganizationsappearedtohavethemostsignificantdifferencesofopinionwhenitcametodriversforreview.Forexample,wherejust7%ofpublicorganizationsselectedlack of credit facilitiesasadriver,nearlyone-third(32%)ofprivatecompaniesdid.Privatecompaniesaremorelikelytobeconcernedwithimproving end-to-end real-time capabilitiesthanpubliccompanies–58%ofprivatecompaniescitedthisasadrivercomparedwith36%ofpublicorganizations.

Therewerealsosignificantdifferencesinoptionbetweenpublicandprivateorganizationswhenitcametoimproving the integration of services into your systems(citedby43%ofpublicorganizationsv68%ofprivatebusinesses),business growth outside of your current banks geographic or industry coverage(29%v42%),andconcerns with security(14%v32%).


Rating Performance

Theareainwhichcorporatepractitionersaremostlikelytoratetheirbankingpartners’performanceas‘good’or‘excellent’issecurity record.

Aswasthecaselastyear,justoverhalfratetheirpartners’understandingoftheorganization’sbusinessandoperationsas‘good’or‘excellent’,thoughthatpercentagewasslightlylowerthisyear(52%in2017comparedwith56%in2016).However,slightlymoreareratingbank acts as a strategic partner and working for longer term solutionsas‘good’or‘excellent’thantheywerelastyear(51%in2017comparedwith45%in2016).Justunderathird(32%)ofcorporatesratetheirpartners’digital servicing capabilitieshighly.

Performance of Organization’s Current Banking Partners(Percentage of Corporate Practitioners rating “good” or “excellent”)

0% 10% 20% 30% 40% 50% 60%

Other

Digital servicing capabilities

Ease of integration with current systemsand processes

Continually improving their products andservices and providing innovation ideas

Conformance with industry standards

Bank acts as a strategic partner andworking for longer term solutions

Face to face relationship management

Bank’s understanding of the organization’sbusiness and operations

Banks provides credit

Security record

20%

32%

37%

40%

47%

51%

52%

52%

54%

56%


Scope of Service

Inachangefromlastyear,whenbanksweresplitfairlyevenlyacrossthefourdifferentmodels,bankingservicesprovidersarenowmostlikelytoadoptaglobalbankingmodel–morethantwofifths(43%)ofbankssaidthattheyprovidedthisscopeofservice,comparedwith31%lastyear.Asmallerproportionofbanksarenowadoptingtheregionalbankingmodel–14%thisyearcomparedwith21%lastyear.

Scope of Service Provided(Percentage of Banking Service Providers)

A global banking model

43%

14%

21%

22%

A regional banking model

Local banking with either global / regional model

Specialist or niche provider


Scope of Service Provided(Percentage Distribution of Banking Service Providers)

Unsurprisingly,largerbanksarefarmorelikelytobeusingaglobalbankingmodel–69%ofbankswithincomeofmorethan$5bnayeararedoingso,comparedwith34%ofsmallerbanks(withannualincomeofupto$500m)andmid-sizedbanks(withannualincomeofbetween$500mand$4.9bn).Mid-sizedbanksaremorethantwiceaslikelyassmallbanksandnearlyfourtimesaslikelytoprovidelocalbankingwitheitherglobal/regionalmodel.

What scope of service does your organization provide?


PacificNorth


Aglobalbankingmodel 43% 34% 29% 69% 51% 37% 58% 63% 58%

Aregionalbankingmodel 14% 9% 19% 19% 19% 11% 14% 14% 11%

Localbankingwitheitherglobal/regionalmodel

22% 21% 48% 13% 22% 20% 15% 14% 20%

Specialistornicheprovider 21% 36% 5% 0% 7% 33% 14% 9% 11%

4343

FutureGrowthStrategy

44FutureGrowthStrategy

A global banking model

36%

20% 11%

17%

15%

A regional banking model

Local banking with either global / regional model

Specialist or niche provider

Not currently moving towards any other model

Models

Aswasindicatedbythefindingsintheprevioussection,manybankingservicesprovidersaremovingtowardsaglobalbankingmodel.Morethanathird(36%)ofbankssaidtheyweremovingtowardsthismodelinthisyear’ssurvey,comparedwithaquarter(25%)lastyear.Meanwhile,fewerbanksaremovingtowardsaregionalbankingmodel(11%thisyearcomparedwith15%lastyear).

Thinking about your future growth strategy, which of the following models are you moving towards?(Percentage of Banking Services Providers)

Banksaremorelikelytobemovingtowardsanewbankingmodelthisyearthantheywerein2016–wherejustunderthree-fourths(73%)saidtheyweremovingtowardoneoffourmodelsaspartoftheirfuturegrowthstrategyin2016,83%saidsothisyear.

Localbankingwitheitherglobal/regionalmodelalsoappearstobegainingpopularityasapotentialbankingmodelforbanks.Athirdmorebankssaidtheyweremovingtowardthismodelthisyearthantheywerelastyear(15%in2016vs20%in2017).


Thinking about your future growth strategy, which of the following models are you moving towards?(Percentage Distribution of Banking Services Providers)


PacificNorth


Aglobalbankingmodel 36% 27% 38% 48% 36% 38% 46% 48% 41%

Aregionalbankingmodel 11% 17% 14% 8% 11% 16% 4% 8% 14%

Localbankingwitheitherglobal/regionalmodel

20% 19% 29% 17% 24% 13% 24% 17% 20%

Specialistornicheprovider 15% 23% 0% 2% 7% 18% 6% 6% 6%

Notcurrentlymovingto-wardsanyothermodel

17% 14% 19% 25% 22% 16% 20% 20% 20%


Business Strategy

Inanincreasinglycompetitivemarket,theprevailingopinionappearstobethatprovidingexcellentcustomerexperiencesisakeydifferentiatorforbanks.Asmorecompetitorscanbeefuptheirtransactionalcapabilities,itwillbethenatureoftherelationshipwiththeircustomersthatdetermineswhichbanksaremostsuccessful.

Thiswasreflectedinthefindingsofoursurvey.Innovationandcustomer experiencearethetwoprimaryconcernsforbanks’businessstrategiesthisyear,eachcitedbytwo-thirdsofrespondents(67%and65%respectively).Alongwithcustomerexperience,innovationholdsgreatpotentialfordifferentiation.

Innovationappearstobefarmoreimportantforbanksasanareaoffocusinbusinessstrategiesthisyearthanitwaslastyear.Where47%ofbankingservicesproviderssaidthattheywerefocusingitonitpredominantlywithregardstotheirbusinessstrategylastyear,67%didthisyear,a43%increaseyearonyear.

Areas of Focus in Business Strategies(Percentage of Banking Services Providers)

Banksarealsofarmorelikelytobefocusingoncybersecuritythisyearthantheywerelastyear,as26%citeditasapredominantfocusintheirbusinessstrategythisyearcomparedwithjust11%lastyear.

0% 10% 20% 30% 40% 50% 60% 70% 80%

Other

Geographical coverage plans

Cybersecurity

Integration of services

Cost efficiency

Compliance and regulatory change

Customer experience

Innovation

26%

7%

7%

28%

40%

44%

65%

67%


Thoseareasoffocusthatwereoveralldeemedaslessimportantthisyearthantheywerelastyearincludedcost efficiency,citedby55%ofbankslastyearcomparewith40%thisyear,andintegrationofservices(41%in2017,28%in2016).

Thinking about your business strategy, which of the following areas are you predominantly focusing on?(Percentage Distribution of Banking Services Providers)


PacificNorth


Costefficiency 40% 47% 33% 33% 31% 46% 38% 41% 42%

Customerexperience 65% 59% 81% 73% 81% 57% 70% 78% 76%

Innovation 67% 66% 71% 73% 68% 72% 65% 72% 73%

Integrationofservices 28% 32% 33% 17% 28% 26% 34% 17% 16%

Cybersecurity 26% 21% 19% 35% 22% 30% 29% 33% 28%

Complianceandregulatorychange

44% 34% 38% 46% 42% 39% 49% 41% 44%

Geographicalcoverageplans 7% 11% 10% 6% 8% 9% 6% 6% 6%

Other 2% 4% 5% 0% 0% 7% 1% 2% 0%

Whencomparedwiththerestofthepack,customer experienceisamoreimportantconcernformid-sizedcompaniesandpublicorganizations,withmorethanfour-fifths(81%)fromeachofthesepredominantlyfocusingonthesebusinessstrategies.Cybersecurityismorelikelytobecitedasafocusforlargerorganizationsthanitisforsmallerormid-sizedbanks.


Mobile App Services

Nowthetreasurerhastakenonamorestrategicroleintheirorganization,theyaredemandingconstant,straightforwardaccesstotheproductstheyuseonaday-to-daybasis,sothattheymayworkmorenimblyandefficiently.Buthowmucharebankscommittingtoprovidingtheirservicesinawaythatcanbeaccessedonatabletorsmartphone?Inanewquestionforthisyear’sTransactionBankingSurvey,weaskedbankingservicesproviderswhatkindsofproductstheywereprovidingonmobile.

Banking Products Accessible via Mobile App(Percentage of Banking Services Providers)

Cash management services werethemostcommonlyofferedbankingproductviamobileapp,eitherasasingleproductormultiproduct,with83%ofbanksmakingthisaccessible.Thiswasverycloselyfollowedbyreporting,citedbyatotalof82%ofbanks.

Thethreeproductsleastlikelytobemadeaccessiblebymobileappareopen account (supply chain financing),withlessthanhalf(44%)thebankssurveyedprovidingit,investment banking/capital markets,providedby43%ofbanks,and‘tradefinance(lettersofcredit,collections),citedbyjust40%.

0% 20% 40% 60% 80% 100% 120

NoneMulti productSingle product


Investment banking / capital markets

Open account (supply chain financing)

Credit / lending

Depository services

Liquidity solutions (including pooling / netting)


Payables

Reporting

Cash Management Services 17%

18%

24%

39%

44%

47%

48%

56%

57%

60%

56%

50%

49%

43%

36%

34%

31%

29%

29%

28%

27%

32%

28%

18%

20%

19%

21%

15%

14%

13%


Competitive Differentiation

Banksappeartounderstandtheimportanceofbeingastrategicpartnertotheircorporateclients,andtheirunderstandingtheirclients’businessandoperations,astheareathoughttocreatethegreatestsourceofcompetitivedifferentiationcitedbymostbankingservicesproviders(81%)wasacting as a strategic partner to their corporate clients and working for longer term solutions.Thiswasfollowedbybank’s understanding of the organization’s business and operations,selectedby71%ofbanks.

Areas Thought to Create the Greatest Source of Competitive Differentiation(Percentage of Banking Service Providers)

0% 20% 40% 60% 80% 100%

Other

Conformance with industry standards

Banks provides credit

Excellent security record

Face to face relationship management

Ease of integration with existing systems and processes

Continually improving their products and services and provide innovation ideas

Digital servicing capabilities

Bank’s understanding of the organization’sbusiness and operations

Bank acts as a strategic partner andworking for longer term solutions 81%

71%

68%

67%

63%

48%

43%

37%

29%

2%


Areas Thought to Create the Greatest Source of Competitive Differentiation(Percentage Distribution of Banking Service Providers)

Actingasastrategicpartnertoitscorporateclientswasalmostuniversallycitedbylargerbanks(thosewithanannualrevenueof$5bnormore),with89%sayingitwillcreatethegreatestsourceofcompetitivedifferentiation.


PacificNorth


Bank’sunderstandingoftheorganization’sbusinessandoperations

71% 65% 81% 75% 70% 73% 73% 71% 73%

Bankactsasastrategicpartnerandworkingforlongertermsolutions

81% 79% 76% 89% 83% 82% 86% 84% 88%

Bankprovidescredit 37% 42% 29% 40% 39% 40% 40% 44% 45%

Continuallyimprovingtheirproductsandservicesandprovideinnovationideas

67% 64% 67% 72% 67% 69% 72% 69% 73%

Easeofintegrationwithexistingsystemsandprocesses

63% 58% 62% 72% 66% 62% 78% 69% 67%

Conformancewithindustrystandards

29% 35% 19% 30% 26% 36% 35% 24% 26%

Digitalservicingcapabilities 68% 65% 76% 75% 66% 78% 73% 66% 71%

Facetofacerelationshipmanagement

48% 42% 62% 49% 46% 51% 47% 40% 46%

Excellentsecurityrecord 43% 46% 29% 53% 44% 49% 49% 48% 46%


Value Added Services

Inanewquestionforthisyear’ssurvey,weaskedcorporateswhatvalueaddedservicestheywouldbepredominantlylookingforfromtheirbankingpartners.

Value Added Services Sought by Corporates(Percentage of Corporate Practitioners)

Forcorporates,support in understanding upcoming regulations and changeswouldbeamostwelcomedservicefromtheirbankingpartner,withnearlytwo-thirds(62%)oforganizationscitingthis.Nearlyhalf(49%)ofcorporatesdesiresupport in leveraging new technologies such as blockchainasavalueadd.

Banksandcorporatesappeartoaligninwhatserviceswouldaddmostvalue.Wehavealreadyseenthatnearlyhalf(49%)ofcorporatescravesupport in leveraging new technologies, such as blockchain,fromtheirbankingpartners–thiswasthesecondmostcitedvalueaddedservicetheywerelookingforfromtheirbanks.Ourresearchshowsthatbanksunderstandthisneed,asoftheoptionswegave,itwasthevalueaddedservicemostoftencitedbybanks.

However,oneareathatmorebanksmayneedtoconsidermoreofapriorityintheirofferingtocorporatesissupportinunderstandingupcomingregulationsandchanges.Wherethisvalueaddedserviceemergedasthemostimportantforcorporates,with62%seekingitfromtheirpartners,just39%ofbankssaidthattheywerelookingtoofferthisasapriority.

0% 10% 20% 30% 40% 50% 60% 70% 80%

Other

Identity management for third-party services

Alternative originations / loans options

Alternative supply chain finance platforms

Embedding financial productsinto your business services

Security advisory services

Streamlined on-boarding / entitlement services

Enhanced working capital management

Support in leveraging newtechnologies e.g. blockchain

Support in understanding upcomingregulations and changes

4%

21%

26%

28%

31%

33%

41%

41%

49%

62%


Value Added Services Offered by Banks as a Priority(Percentage of Banking Service Providers)

Anotherareawherecorporatesandbanksmightnotbeseeingeye-to-eyeisenhanced working capital management.Morethanhalfofallbanks(55%)areofferingthisserviceasapriority,despitejust41%ofcorporatesseekingit.Similarly,where50%ofbanksareprioritisingembedding financial products into their customers’ business services,thisserviceisonlysoughtby31%oftreasurers.However,anareainwhichthetwogroupsalignagainisstreamlined on-boarding/entitlement services.Justovertwo-fifths(41%)ofcorporatesindicatedthiswasimportanttothem,comparedwithasimilarproportion(45%)ofbankswhoareprioritizingitsdelivery.

0% 10% 20% 30% 40% 50% 60%

Other

Security advisory services

Alternative originations / loans options

Cloud services

Identity management for third-party services

Alternative supply chain finance platforms

Support in understanding upcomingregulations and changes

Streamlined onboarding / entitlement services

Embedding financial products into yourcustomers' business services

Enhanced working capital management

Support in leveraging new technologiese.g. blockchain 57%

55%

50%

45%

39%

38%

23%

22%

19%

16%

5%


Value Added Services Offered by Banks as a Priority(Percentage of Banking Services Providers)

Smallerbanks(thosewithannualincomesoflessthan$500m)appeartounderstandthedesireforsecurityadvisoryservicesfromtheirclientsbetterthanmid-sizedandlargerbanks.Wehavealreadyseenthatsecurity advisory servicesaresoughtbyathird(33%)ofcorporatesfromtheirbanks.Butjust10%ofmid-sizedbanksand15%oflargebanksareprioritizingitasavalueaddedservices,comparedwith25%ofsmallerbanks.

Generallyspeaking,thelargerthebank,themorelikelyitistoprioritiseenhanced working capital managementasavalueaddedservice,whichmissestosomeextentwhattheircorporateclientsseek.However,largerbanksarealsomorelikelytobefocusingonsupportingtheirclientsinleveragingnewtechnologies,whichindicatesanunderstandingoftheirclients’needsinthisarea.

When thinking about creating new revenue streams from value added services, which services are you looking to offer corporates as a priority?


PacificNorth


Enhancedworkingcapitalmanagement

55% 55% 62% 65% 67% 57% 71% 66% 62%

Alternativeoriginations/loansoptions

19% 25% 10% 10% 14% 22% 19% 14% 16%

Alternativesupplychainfinanceplatforms

38% 42% 33% 46% 40% 50% 50% 45% 38%

Streamlinedonboarding/entitlementservices

45% 42% 43% 42% 50% 35% 41% 39% 39%

Securityadvisoryservices 16% 25% 10% 15% 8% 26% 16% 11% 13%

Identitymanagementforthird-partyservices

23% 21% 29% 23% 18% 30% 18% 20% 20%

Supportinunderstandingupcomingregulationsandchanges

39% 43% 43% 40% 39% 39% 41% 27% 37%

Supportinleveragingnewtechnologiese.g.blockchain

57% 55% 62% 67% 58% 63% 64% 63% 56%

Embeddingfinancialprod-uctsintoyourcustomers’businessservices

50% 55% 57% 42% 50% 54% 46% 36% 45%

Cloudservices 22% 30% 14% 15% 14% 28% 23% 19% 48%

Other 5% 6% 5% 2% 6% 2% 3% 3% 1%


Other Partnerships

Toimproveoperationalperformance,improvespeed,serviceandefficiency,andtosavecosts,bankingservicesmayoutsourcesomeoftheirnon-strategicfunctionstospecialistcompanies.Weaskedbankingrespondentswhichbackofficeservicestheywouldconsideroutsourcing,orpartneringwithotherbanksorserviceproviderstofulfil.

Theareabanksweremostlikelytoconsideroutsourcingtootherserviceprovidersisopen account supply chain finance,citedby67%ofbanks.Thisisasignificantrisefromlastyear,whenjust51%ofbanksconsideredoutsourcingthisbackofficeservice.Asimilarproportionofbankswouldconsideroutsourcingpaymentstootherserviceproviders,with65%citingthis,asimilarproportiontolastyear(67%).

Aswasthecaselastyear,ofthesixoptionsinthesurvey,theareathatbanksareleastlikelytoconsideroutsourcingisFX(54%).Thisfiguredoeshoweverrepresentamodestrisefromlastyear,when50%consideredoutsourcingtheservice.

Bank Office Services Considered Outsourcing to Other Service Providers(Percentage of Banking Services Providers and Corporate Practitioners)

0% 20% 40% 60% 80% 100% 120

NeitherTo service providersTo banks

FX

Corporate treasury management services

Trade finance services

Customer / supplier onboarding

Payments

Open account supply chain finance 29% 38% 33%

32% 33% 35%

22% 42% 36%

28% 30% 41%

26% 32% 43%

31% 23% 46%


Transaction Services

Aswasthecaselastyear,paymentsisthetransactionservicemostbankingservicesprovidersthinktobemostvaluabletothemifdeliveredinanintegratedandstandardizedway,citedby85%ofbanks,aseven-pointincreaseonlastyear.

Receivablesisbecominganincreasinglyimportanttransactionserviceforbanks.Itwasthesecondmostcitedservicethisyear(61%).Thismarksa10-pointincrease,placingitsecondinalistofthesevenserviceswegave,aleapfromfifthpositionin2016.

Transaction Services Thought to Deliver Most Value(Percentage of Banking Services Providers)

0% 20% 40% 60% 80% 100%

Other

Forecasting

Open account

Trade finance

Payables

FX

Receivables

Payments 85%

61%

57%

57%

56%

40%

32%

2%


Security

Thisyear,weintroducednewquestionsinordertocomparebankingservicesproviders’andcorporatepractitioners’perspectivesonsecurity.Theresultsindicatethatcorporatesandbanksaresomewhatalignedintheirviewsonwhichgroupshouldoverseeeachresponsibilityconcerningsecurity.Themajorityofbothcorporatesandbanksagreedthatbanksshouldtakeresponsibilityforreal-timepayments.

Themajorityofrespondentsfromeithergroupalsofeltthatbothcorporatepractitionersandbankingservicesprovidersshouldberesponsibleforalmostalloftheoptionswegave.Whenitcametocyberattacks,morethanfour-fifthsofallrespondentsthoughtthatbothgroupsshouldberesponsibleforprotectionfromcyberattacks(82%ofcorporatepractitioners,86%ofbankingservicesproviders).

Respondents were asked: Thinking about security, who do you think should be responsible for the following?(Percentage of Corporate Practitioners)

However,whilemorethanhalf(51%)ofbankingservicesprovidersthoughtthatitwasthemthatshouldberesponsibleforsecurityrelatedtoKnow Your Customer and on-boarding processes(withjust4%ofthisgroupbelievingitshouldbetheresponsibilityofcorporatetreasurers),justathird(33%)ofcorporatesthoughtthatitshouldbebanks’responsibility,with16%sayingthatitshouldfallundertreasurers’remit.

Anothersmalldifferenceofopinionemergeswhenweconsiderprotection from identity theft.Where24%ofcorporatetreasurersfeelthisshouldbethebanks’responsibility,just13%ofbankingprovidersthisway.

0% 20% 40% 60% 80% 100%

BothBankCorporate

Protection from cyber attacks

Adequate screening and timely notificationof questionable / fraudulent transactions

Understanding upcoming regulations

Protection from data theft

Protection from identity theft

Encryption of sensitive and customer data

Know Your Customer and On-boarding processes

Real-time payments

82%

79%

75%

71%

68%

62%

51%

46%

13%

14%

21%

20%

24%

27%

33%

5%

7%

4%

8%

8%

11%

16%

52%

1%

57

Thinking about security, who do you feel should be responsible for the following?(Percentage of Banking Services Providers)

Whereas81%ofbankingservicesprovidersthoughtthatbothcorporatesandbanksshouldberesponsibleforprotection from data identity theft,just71%ofcorporatesthoughtthesame.

0% 20% 40% 60% 80% 100%

Both Bank Corporate

Protection from cyber attacks

Protection from data theft

Protection from identity theft

Adequate screening and timely notificationof questionable / fraudulent transactions

Understanding upcoming regulations

Encryption of sensitive and customer data

Know Your Customer and onboarding processes

Real-time payments

86%

81%

80%

79%

70%

65%

45%

38%

12%

15%

13%

18%

27%

32%

51%

2%

4%

7%

3%

3%

3%

4%

57%5%


PSD2: The Revised Directive on Payment Services

WithjustafewmonthstogobeforeallEUmemberstatesmustcomplywiththeSecondPaymentServicesDirective(PSD2),whichcomesintoforceinJanuary2018,wewereinterestedtoseewhatbankingservicesprovidersaremostconcernedaboutwhenitcomestothelegislation,andwhethertherehavebeenanyshiftsinattitudesincelastyear.WeaskedbankswhattheirprimaryconcernssurroundingtheimplementationofPSD2were,andtoselectallthatapply.

Primary Concerns Surrounding the Implementation of PSD2(Percentage of Banking Services Providers)

Itlooksasthoughalthoughayearhaspassed,thesameconcernsaboutPSD2exist,andoftentoaslightlygreaterextent.

Onceagain,andwithexactlythesamepercentageofbanksselectingit(45%),themostcitedconcernaboutPSD2wascost of implementation.Thiswascloselyfollowedbylastyear’ssecondplacedconcern,security and cyber risks,citedby44%ofbanks.

0% 1%0 20% 30% 40% 50%

Other

Increased long-term costs

Not relevant / don't know

Prospect of increased competition

Reduction of existing revenue streams

Increased complexity of the payments sector

Variations in cross-border payments/country interpretation

Security and cyber risks

Cost of implementation 45%

44%

38%

36%

35%

32%

23%

21%

3%

59

Primary Concerns Surrounding the Implementation of PSD2(Percentage of Banking Services Providers)

FutureGrowthStrategy

SmallerbanksaremorelikelytobeconcernedaboutthecostofimplementingPSD2thanmid-sizedorlargerbanks,asmorethanhalf(54%)citedthisasaprimaryconcern(comparedwith24%ofmid-sizedbanksand44%oflargerbanks).Thiswasbyfarthemostcitedconcernforbanksmakinglessthan$500mayear,followedbyreduction of existing revenue streams, variations in cross-border payments/country interpretationandsecurity and cyber risks,eachcitedby39%ofsmallerbanks.

Ofthethreeincomebands,itisthemid-sizedbankswholooktobetheleastconcernedaboutcost of implementation,withjust24%ofbanksearningbetween$500mand$4.9bncitingthisasaconcern.

Mid-sizedbanksaremorelikelytobeconcernedabouttheincreasedcompetitionPSD2mightbringtothefield,as43%selectedit,makingitthemostcitedconcerninthisincomeband.Variations in cross-border payments/country interpretationwasjustonepointbehindthis,with43%ofmid-sizedbanksselectingitasaconcern.

Forlargerbanks(thosewithanannualincomeofmorethan$5bn),security and cyber risksarethemostpressingconcern.With60%ofbanksselectingthis,itwasthemostcitedconcernintheincomeband.RespondentsalsonamedlossofdataawarenessandclientsrushingtoPSD2withoutfirststreamliningtheirprocessesasconcernsaboutthedirective,thoughonesaidtheysawitasanopportunity.


PacificNorth


Costofimplementation 45% 54% 24% 44% 43% 47% 49% 37% 39%

Increasedlong-termcosts 21% 29% 14% 21% 18% 31% 26% 24% 21%

Prospectofincreasedcom-petition

32% 33% 43% 29% 24% 42% 36% 32% 37%

Increasedcomplexityofthepaymentssector

36% 33% 19% 48% 32% 42% 40% 35% 39%

Reductionofexistingrevenuestreams

35% 39% 38% 40% 32% 51% 41% 38% 42%

Variationsincross-borderpayments/countryinterpretation

38% 39% 43% 44% 31% 58% 47% 48% 47%

Securityandcyberrisks 44% 39% 38% 60% 43% 53% 51% 48% 54%

Notrelevant/don’tknow 23% 17% 33% 15% 25% 11% 15% 19% 11%

Other(pleasespecify) 3% 2% 0% 2% 3% 2% 0% 2% 3%


About the Survey

GTNewsconductedthe2017CGITransactionBankingSurveyfromJunetoJuly2017.ThesurveywassenttoGTNewscorporatepractitionersubscribersandbankingservicesproviders.Theprimarypurposeofthesurveywastobetterunderstandattitudesandemergingtrendsinbankingservicesandalsotoidentifyhowbankingservicesaremeetingtheneedsoffinanceprofessionals.

Morethan300responseswerereceivedfromabout140corporatepractitionersworkingintheirorganization’streasuryorfinancefunctionand240bankingservicesproviders.Duetothesamplesizeobtained,regionalanalysiswaslimitedtoresponsesfromthosefinancialprofessionalswhosebusinessesoperateintheAsiaPacific,NorthAmericaandWesternEuroperegions.

GTNewswouldliketothankCGIforitsunderwritingsupportofthe2017TransactionBankingSurvey.

Thetablesbelowpresentthedemographicprofileofsurveyrespondents.

Type of Organization(Percentage Distribution of Organizations)

Corporatepractitionerworkinginmyorganization’streasury/financefunction 37%

Bankingservicesprovider 63%

Ownership Type(Percentage Distribution of Organizations)

PubliclyHeld 32%

PrivatelyOwned 50%

Non-Profit 4%

Government(orgovernment-ownedentity) 15%

Annual Revenue (USD)(Percentage Distribution of Organizations)

Under$50million 22%

$50-99.9million 5%

$100-24.9million 7%

$250-499.9million 8%

$500-999.9million 6%

$1-4.9billion 19%

$5-9.9billion 9%

$10-20billion 9%

Over$20billion 16%

61

Geographic Region(Percentage Distribution of Organizations)

AsiaPacific 62%

Central&EasternEuropean 47%

Latin&SouthAmerica 33%

MiddleEast&Africa 42%

NorthAmerica 53%

WesternEurope 56%

Industry Sector(Percentage Distribution of Corporate Practitioners)

Banking/Financialservices 9%

Businessservices/Consulting 12%

Construction 1%

Energy(includingutilities) 8%

Government 8%

HealthServices 8%

Hospitality/Travel 4%

Manufacturing 9%

Non-profit(includingeducation) 3%

Realestate 5%

Retail(includingwholesale/distribution) 8%

Software/Technology 11%

Telecommunications/Media 1%

Transportation 1%

Other 11%

Disclaimer:Forallquestionsinthissurveythedatarecordedhasbeenroundedtothenearestwholenumberforclarity.Forthisreason,totalresponsesforanumberofdatafieldsmaytotal99%or101%.

6262

Conclusion

63Conclusion

Conclusion

Thisyear,theTransactionBankingSurveygoestopressjustbeforeawaveofsignificantchangeinthebankingsectorandbeyond,withtheintroductionoftheregulationsPSD2inJanuary2018,andGDPR,whichwillgoverndataprotection,inMay.

Thechallengespresentedbytheseregulatorychangeswilldemandstrongrelationshipsbetweenbanksandcorporates,however,asthefindingsinthisyear’ssurveysuggest,banksandcorporatesarenotentirelyalignedwiththeirprioritiesgoingforward.Forexample,therewasamismatchbetweenwhichservicesaremostsoughtbycorporates,andwhichwereofferedbybanksasapriority.Whileathirdofcorporatesseeksecurityadvisoryservicesasapriority,just16%ofbanksareofferingit.

Onamorepositivenote,however,thesurveyfindingsindicatethatbanksunderstandtheimportanceofcustomerexperienceasakeydifferentiator,afactorthatwillbecomeyetmoreimportantwiththepredictedinfluxofnon-bankplayersenteringthemarketafterPSD2.Asincumbentbanksmaystruggletocompetewithnimblerchallengerbanksinsomerespects,providingexcellentcustomerexperienceswillkeepthemahead.

ItisworthaddingherethatPSD2could,asonerespondenttothesurveynoted,presentgreatopportunitiesforbanks,asanopenAPIstandardcanenablethehigherqualitycustomerexperiencesthatarenowexpected.It’spromisingthatthepercentageofbanksofferingopenAPIshasmorethandoubledoverthelast12months,foraswenotedinlastyear’sreport,itisthosewhoembracetheOpenAPIEconomywhowillsucceed.Indeed,thenext12monthswillbecrucialforallplayersinvolved.

Documents

Transaction Banking Survey 2017 - cgi.com GTNews Transaction Banking survey, which offers critical insight into the corporate-to-bank relationship. While 2016 ... , file formatting