B2B Payments

How Data Disruption Is Changing The Way Treasurers Shop For Tech

Corporate treasurers within large enterprises may have the advantage of having relatively more resources to invest in technology, but between high transaction volumes, complex workflows and multiple banking relationships, finding a third-party treasury management tool is largely out of the question for many teams.

Instead, the tradition has been to build proprietary internal systems, a process that introduced a slew of new friction points for Joerg Wiemer, CEO and co-founder of Treasury Intelligence Solutions (TIS). As a former head of treasury at a multinational organization, Wiemer said he experienced the friction of using multiple banking solutions that lacked a holistic, integrated approach to money management — despite a lengthy and expensive IT initiative.

Today, corporate treasurers' cash management and payment needs are only growing more complex, leading to a shift in the way treasurers shop for technology, Wiemer told PYMNTS. But despite significant disruption in the market, the core needs of treasurers and corporate finance executives remain constant.

As a result, he said, FinTech solutions must embrace the opportunities that a new ecosystem of faster payments and data integration presents to the modern treasurer — without losing sight of what's really important to these professionals.

Unlocking The Power Of Data

"One thing we clearly see is that our clients want to do a lot more with the data they are generating," Wiemer said of the biggest opportunities that treasurers see in technology offerings. "Some of the ideas we are exploring with our customers revolve around open data."

He pointed to data sharing between corporates and their business partners as an area of low-hanging fruit, even in markets like the U.S. where open banking regulatory mandates don't exist.

Open banking frameworks and application programming interface (API) connectivity will continue to become even more important to the corporate treasurer as these professionals adjust their strategies to back-office digitization. One of the biggest shifts that has occurred in this space in recent years is the migration away from building clunky, proprietary treasury management solutions in favor of embracing third-party solution providers.

"Unbundling has also been a big trend, not only in retail," Wiemer noted. "Choosing the best, most pertinent product or service from a variety of providers has spilled over from consumer banking into wholesale."

As a result, however, those service providers must ensure their technologies can connect seamlessly into clients' back offices, including with the array of other third-party apps and tools they've deployed, while remaining focused on offering a best-of-breed product — a shift that he described as "unchartered territory" for financial service providers used to treasurers taking a "one-stop shop" approach to procuring technology.

A Faster Payments Future

In a payments ecosystem of accelerating change and innovation, corporate treasurers are also tasked with overhauling their payments and cash management strategies to reflect a market that demands transaction transparency and speed. For their solution providers, understanding how treasurers interact with their existing bank and other finserv partners will be key to adequately addressing their payments needs.

"When it comes to corporate payments, treasury has the dilemma of wanting to maintain their banking and processing setup, while preferring just one vendor to provide the connectivity for payments and bank account information," explained Wiemer.

Treasurers seek a bank-agnostic tool so they can streamline their payments flows across platforms and across financial institutions.

FinTechs like TIS, which recently announced a $20 million funding round, must also be ready for more changes ahead, he said, particularly as real-time payments gain traction around the world.

Today, treasurers tend to maintain their batch payment processing approach. But as real-time transacting becomes the norm, that shift will introduce disruption to legacy workflows — although, noted Wiemer, "the benefits will be tangible."

"Risk reduction and increased liquidity are powerful arguments" to embracing real-time payments within the treasury function, he said, noting that this is a significant opportunity for third-party FinTechs as banks continue to "drag their feet" at supporting instant corporate payments and data integrations.

Preserving The Treasurer's Role

Although disruptive, the shifts occurring in how treasurers wield data and prepare for a real-time payments world are likely to introduce a host of benefits to how corporates manage money. Indeed, while technological innovation has presented the opportunity for treasurers to update their strategic role within the enterprise, at their core, the goal of the corporate treasurer has remained the same.

"If we look at what has really changed in cash management and cash forecasting in the past 10 years, the answer is: not much," Wiemer said.

Even amid a global pandemic, the core needs of treasurers have remained the same — although, he noted, the coronavirus has likely illuminated the biggest friction points of a lack of visibility and connectivity for many treasurers today.

For third-party service providers, acknowledging the value of data integration as treasurers adjust their tech purchasing habits will be paramount. For the corporate treasurers themselves, understanding that internal IT projects aren't the only avenue for modernization is also important. The alternative, warned Wiemer, will lead to stagnant and stale back-office processes.

"Even with good ideas and intentions, many corporate treasuries have trouble moving forward given the lack of IT capacity or domain knowledge for new projects,” he said. “Whatever the reason, the outcome is usually 'doing nothing.’ Digitalization and innovation are necessary — and yet, firms do not need to do everything themselves."

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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