B2B Payments

How Businesses Trust The Blockchain, Their Banks And Themselves

A wave of data from last week offers a few highs and a few lows. Take a dive into the stats about how corporations trust the blockchain, operate with their banks and tackle finances themselves. New research shows the state of cash reserves among corporations and who tops the list of targets for cybercriminals. All the numbers are here in the PYMNTS B2B Data Digest.

The Future Of Payments Rails

The buzzwords “blockchain” and “bitcoin” often go hand-in-hand, but these days it seems talk of blockchain technology is shining on its own. New analysis from Greenwich Associates appears to confirm that, with a survey that found 73 percent of financial services experts agree that the blockchain is not dependent on bitcoin to make an impact on the market.

[bctt tweet=”73% of financial services experts agree that the blockchain is not dependent on bitcoin.”]

Still, it’s less of a consensus as to whether that will actually happen. Greenwich’s research found about one-third of survey respondents say legal and compliance officials will view blockchain technology as reliable, and about 38 percent believe compliance officials will “eventually” come around to accepting the technology.

“For the blockchain or another distributed ledger to provide this clarity to the market, market participants and the legal system would all have to recognize the ledger as the golden copy of who owns what,” the report concluded. “This is technically possible but not a reality just yet.”

Small Business Stats

Last week, PYMNTS spoke with payroll service provider Paychex to discuss the impact of small businesses taking care of their own payroll and HR operations. The conversation stemmed from the company’s recent research, the Paychex Small Business Survey, which discovered that the majority of SMEs — 56 percent — tackle payroll themselves.

[bctt tweet=”The majority of SMEs — 56% — tackle payroll themselves.”]

That’s not great news, Paychex VP of Marketing Andy Childs told PYMNTS.

“With small businesses, generally those with fewer than 20 employees, there are usually three ways they are going to be doing payroll, and that is software, manually or the third way is outsourcing,” he said. “And with those first two, there is the higher level risk of errors. Especially in the case where they are doing it manually, there is the danger, and sometimes the reality, when executives are not calculating the payroll properly or the taxes properly.”

Separate data came out last week that spells more bad news for the small business crowd: More than half of SMEs in the U.S. have been hit by a cyberattack. That figure came out of the “Hacked: The Realities of a Cyber Event” recently held in Washington, D.C., said reports in PropertyCasualty360.

The event was hosted by Travelers, whose enterprise leader for cyber insurance at the firm, Tim Francis, dropped some more data — mainly, one in two companies reported being the victim of a cyberattack last year, and about 60 percent of those attacks landed on SMEs.

Every day, he added, there are 34,529 known “computer incidents,” according to reports — scary stuff.

Corporate Cash Management

Companies are not very pleased with the treasury services provided by their banks, according to new findings from the Transaction Banking survey published last week by the Association for Financial Professionals.

Here are the numbers:

  • 23 percent of finance executives are in the midst of renegotiating their banking contracts
  • 25 percent are “either actively seeking new banking partners … or have plans to move their business accordingly.”

The statistics weren’t all bad; the research found that the majority of financial executives, 68 percent, are “highly satisfied” with their bank partners.

[bctt tweet=”The majority of financial executives, 68%, are “highly satisfied” with their bank partners.”]

Analyses uncovered some other insights into the minds of today’s corporate financial executive. For example, the majority (62 percent) are making cash management their top priority. Nearly half (48 percent) say their main focus is payment products.

Further, 45 percent said foreign exchange is their main concern, a finding that analysts said can be attributed to recent volatility in the global economy.

On the other hand, the good news is that corporations have more money for their banks to help manage. A new report by Forbes Insights and Northern Trust released last week found that businesses today have more cash than they did just before the financial crisis of 2008.

“Cash Rich: Are You Prepared to Handle the Risks?” found that two-thirds of corporations surveyed now have more cash today than they did in 2008, while nearly half said they are working towards more aggressive cash investment practices.

Analysts were quick to offer a reality check to these findings, however. While more corporations have more cash, a minority (30 percent) of the senior corporate executives surveyed said they are progressively working to implement new controls and policies of cash management and investment.

“This report indicates that the strategic value of treasury is increasing,” said Bruce Rogers, Forbes Media Chief Insights Officer, in a statement. “But for many companies, it may be time to review short-term investing practices.”

To recap: Financial executives have (some) faith in the blockchain, are a bit iffy with their banks but have more cash today than before the financial crisis of 2008. And when it comes to small businesses, SMEs should think twice about tackling payroll alone and are also more often the target of cyberattacks.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the February 2019 PYMNTS Digital Fraud Tracker Report

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