Community
In 2013 banks will concentrate on producing results after the period of evaluation and investments in areas like SCF, Regulatory compliance, SEPA, integration of cash and trade.
Banks will work to empower their corporate counterparty (e.g., the treasurer) while creating conditions to generate volumes for revenue growth.
Transaction banking must give way to relationship banking, but conditions do not allow this paradigm shift and banks will still be caught in the middle between the willingness to become more customer-centric and the practical impossibility to change on the fly organization, processes and technology infrastructure.
Banks will start wondering whether it is still worth for them to keep doing business in relatively new areas for corporations like Supply Chain Finance (SCF). The credit crunch and consequent economic crisis made business perspectives look good to banks. Large and small corporations were (and still are) all in demand for liquidity and improved working capital, so the provision of advanced cash in the form of approved payables or receivables finance appeared as a “no brainer” to most banks. Yet, bank-driven supply chain finance programs take longer than expected to run and the sales cycles take longer time than expected making costs rise and results lag.
Apparently corporate executives are suspicious of bank-driven SCF programs for several reasons:
Bottom line: Expect banks to start looking for clear roadmaps for implementation to minimize costs and start reaping the benefits of recent investments. IT solution vendors will soon begin to deploy Readiness-Maturity models that measure the readiness of a company to embark in a SCF program and the maturity of a bank’s organization to profitably and successfully deliver the program. Corporate users will privilege banks that approach them with a clearly articulated SCF program roadmap models. Banks will rely on IT solution vendors and business process outsourcing service providers to build such models.
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Rolands Selakovs Founder at avoided.io
14 February
Sergei Grechkin Chief Risk Officer at AIFM Cayros Capital
Katherine Chan CEO at Juice
Laurent Descout CEO at NEO Capital Markets
13 February
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