A recent survey by EY of more than 1,800 global CFOs and treasurers of corporate and commercial clients was unveiled at Sibos, revealing chances for banks to provide value-added services.
Treasuries’ top challenge is securing financial investments focused on environmental, social and governance (ESG) concerns. Matt Cox, EY Global Commercial and Commercial Banking Leader, says that while expecting an ESG retracement, the opposite was true, as participants around the globe all thought banking ESG products and services were lacking.
The three subsequent challenges are digitizing treasury functions, managing real-time data feeds for accurate reporting and benchmarking performance. “I think we pick up a sense that treasurers are feeling under some pressure to evolve how they run operations in the context of this new technology-driven, digital world,” Cox suggests.
Adding: “I think it presents a huge opportunity for banks and other institutions, as only one in four corporate treasurers thought that their company was capable of delivering that capability in-house.”
The fifth challenge is accessing capital funding from non-bank lenders. “We see a high proportion of corporates accessing finance now from non-banks, and we expect that to increase in the future, and this is also something banks could get involved in facilitating from private credit,” states James Sanky, EY EMEA Corporate, Commercial and SME Banking Leader.
“In our mind, there are a lot of opportunities where banks could provide managed services for clients,” Sanky continues. Of the top five opportunities for banks to enhance treasury solutions, the top three areas they are willing to outsource are treasury risk functions, payment processing and cash and liquidity management.
If treasuries were to outsource those operational functions, they could focus on more strategic things, such as more analytics and decision-making, which can really help drive business growth.
On data-driven insights, 87% of the respondents said they would be comfortable with strategic advice based on aggregated internal and external data. In comparison, 92% said they were comfortable incorporating artificial intelligence into treasury operations. The desire for sector-specific offerings driven by data and insights also polled 92%.
“Although treasuries are moving to more strategic functions, they are still seen more of a cost center, while banks spend and invest a lot in technology,” remarks Cox. “So, if they can actually deploy that out to their clients, they could monetize treasury management services.”