The demand for cash management services by corporates is not new for our banks. However there is now more pressure than ever on transaction banks to provide more comprehensive cash management solutions covering everything from liquidity management, payments, receivables, delivery channels, etc. - with a specific focus on seamless implementation and the provision of consistent, high-quality ongoing customer service. 

As Corporates look to rationalise the number of bank relationships, banks now see themselves operating in a new era where the demand for their services as a provider of cash management services is under increasing pressure. Not only must they be financially attractive, but they need to be innovative, agile and timely with their delivery of services, albeit with reduced margins on their traditional banking service, brought on of course by increasing competition.  This competition is often coming from new entrants, particularly in the area of payments where providers are appearing on the scene and making quite an impact - eating into what was once very traditional banking business revenue streams with efficient, easy to use services, delivered using new technologies, which are often cheaper and where these savings are reflected in new pricing models.

Corporates are often global businesses with supply chains that are complex, diverse and multi-country.  They are also operating in competitive environments, sourcing new and different products and services to ensure they can meet their customer demands.  Their requirements for banking services to help them balance payments, receipts and financing across multiple countries and multiple currencies, notwithstanding the challenges presented by needing to manage business relationships in areas where political upheavals and economic conditions can be volatile is certainly calling for banks that can bring local knowledge and experience.

It’s quite a tall order for banks who have evolved over centuries to keep pace with the ever increasing change of pace at the front end, the end that really matters, where they transact with their customers and earn their keep – it’s not just a matter of putting up a bright new shiny interface and promising to meet the needs of every customer.

Often it comes back to the infrastructure behind the new customer engagement models, which makes sure that all the “dots” can be connected.  For example, there is no getting away from the need to access data – which could be customer information, or more technically-centric data required to define and pass transaction messages from one system to another, or data required for compliance and regulatory laws.  There are many aspects to transaction banking activities.

Banks won’t be throwing away their existing systems and technologies, policies, procedures, data – their legacy.  BUT, they have acknowledged the need to embrace entirely different approaches to serving customer requirements – in fact if they don’t, the very existence of their business will be threatened. 

We see new roles within banks to lead this innovation.  It may seem like a hill to climb but it’s also an extremely exciting time to be involved in the opportunity to rise to the occasion and take full advantage of the expertise, skills and new technologies in order to grow their business.  There is a whole new way of thinking, new generations of customers with different demands, different challenges of their own and it presents banks with a tremendous opportunity to reach out to the market and take advantage of the work done by groups ranging from clever, creative individuals to work done by teams in universities, groups supporting new ideas and ingenuity, who provide an environment for nurturing and testing new ideas. 

Whilst banks and the industry as a whole move forwards on a continual evolution of embracing change and turning this into tangible products and services that can be delivered to benefit their customers, we still have to keep the system ticking along to support the everyday needs of the business community.

We have to take the important and incremental steps forward in automation and process improvement.  Every opportunity to improve and streamline the transaction processing model will help us to meet the needs of today and provide a healthy support network for the rapid adoption of new models of customer service delivery that Corporates need and allow banks to not only be competitive but continue to be the reliable, trustworthy and agile participants in the financial industry of the future.