The Two Things That CFOs and Treasurers Want From Working Capital Solutions

The economy is unpredictable, and companies are clamoring for on-demand working capital solutions that can be tailored to their unique needs.

Imagine a world where your bank knows your business as well as you do, providing the working capital solution you need right when you need it — no phone calls, no paperwork, just a push of a button.

That’s where the future of finance is headed, and the race is on.

The need for on-demand, friction-free access to working capital is rising, as companies demand solutions that match the speed and complexity of their industries.

Whether you’re a business owner seeking the perfect working capital solution or a bank scrambling to keep up, data in PYMNTS Intelligence’s “2024-2025 Growth Corporates Working Capital Index,” commissioned by Visa, revealed that flexibility and personalization aren’t just the future; they’re the new standard.

Still, the road to flexibility and personalization is paved with challenges. Legacy systems — those clunky, outdated tech stacks that banks rely on — aren’t compatible with the speed and agility that today’s market demands.

On top of that, regulatory hurdles are a headache, especially as banks race to implement these new tech-driven solutions. There’s also the cost of transitioning to cutting-edge artificial intelligence-powered platforms — no small feat for even the biggest players in the game.

Read also: Solving the Working Capital Goldilocks Paradox: 3 Best Practices for CFOs

The Growing Demand for Personalized Solutions

Data indicated that over 80% of chief financial officers and treasurers have used working capital solutions, marking a 13% increase year over year. However, these finance function leaders are no longer content with generic, one-size-fits-all offerings; they seek tailored financial services that align with their strategic growth agendas and operational realities.

No longer satisfied with the status quo, forward-thinking finance teams want solutions that cater to their specific industries, spending patterns and business requirements.

The approval process is a hurdle CFOs and treasurers face in securing working capital. Despite the common perception that the cost of capital is a concern, CFOs and treasurers report that approval speed is often a more critical factor.

Only 3% of middle-market firms reported smooth access to working capital solutions, illustrating the challenges companies encounter — making a fast and easy application process with minimal friction or wait time before approval a crucial consideration for working capital providers.

The demand is for digital-first, streamlined services with faster approval processes that remove bureaucratic obstacles and align with a company’s growth trajectory. Traditional working capital solutions, with their lengthy approval timelines and limited personalization, increasingly fall short of meeting these expectations.

The Features CFOs and Treasurers Value

Middle-market firms and dynamic businesses want more than traditional loan products; they value customized loan structures and payment schedules that align with their cash flow patterns. For CFOs and treasurers, flexibility and responsiveness in financial solutions are crucial. The ability to access funds just in time — without lengthy approval processes — can mean the difference between seizing growth opportunities and facing operational setbacks.

Innovative solutions like virtual cards are gaining traction for providing this flexibility. Virtual cards allow CFOs and treasurers to access funds as needed, eliminating separate approval processes. This on-demand access is essential for companies with fluctuating cash flows or those operating in sectors where financial agility is a competitive advantage.

Additionally, CFOs and treasurers value the assistance of relationship managers who possess lending experience and industry knowledge. This expertise enables bankers to design solutions tailored to specific industries and regions, ensuring that financing options align with business requirements. Beyond lending, companies also seek banks that offer integrated services, combining insurance, investment and banking solutions to provide comprehensive financial support.

For businesses operating in fast-evolving sectors, flexibility is paramount. These companies prioritize financial partners who can offer solutions beyond low-cost capital. They seek cutting-edge technologies and digital solutions that enhance operational efficiency, improve data analytics capabilities and integrate seamlessly with existing systems. This demand highlights a shift where technology is not only an enabler but a necessity for managing working capital effectively.

The Role of Banks in Addressing the Demand for Flexible Capital

To meet the evolving needs of CFOs and treasurers, banks must adapt their approach to providing working capital solutions. Customization is key. Banks can design loan products and payment schedules that accommodate the unique cash flow patterns and financing needs of each client. Corporate card solutions that automate expense tracking and integrate seamlessly with existing systems can enhance operational efficiency, a consideration for middle-market firms.

A streamlined, fast application process is another essential feature that banks must prioritize. CFOs and treasurers expect minimal friction and quick approvals. Digital solutions play a role here, as they can simplify the loan application process, enabling companies to manage expenses and access funds without delays. Advanced digital tools for tracking expenses, managing invoices and integrating these processes into broader financial systems offer businesses a valuable advantage in maintaining cash flow transparency and control.

Banks that incorporate a holistic approach — offering not just financing but also networking opportunities with suppliers, distributors and other companies — can add value. Such an ecosystem-based model strengthens relationships, enhances business efficiency and contributes to long-term growth.

“Take a look at the findings to see what your customers are telling us — and find the opportunities to provide greater access to working capital solutions to enable those businesses to grow in the ways in which they want,” Lauren Hewings, head of working capital solutioning at Visa told PYMNTS in an interview posted Oct. 21.

The Impact of AI on Personalization in Financial Services

AI is increasingly influencing the financial services landscape, particularly in personalization. For CFOs and treasurers, AI offers the potential for proactive cash flow management and liquidity planning. Banks that use AI can anticipate liquidity challenges and offer solutions before they become problems, ensuring businesses maintain operational continuity.

AI’s capacity to analyze vast amounts of data and identify patterns also supports the customization of working capital solutions. It enables banks to tailor products not only based on historical financial performance but also in real time, adapting to the changing needs and circumstances of a company. As CFOs and treasurers demand more precise and responsive financial solutions, AI’s role in enhancing personalization becomes increasingly critical.

Ultimately, what CFOs and treasurers want from their financial partners is a proactive relationship. They expect commercial bankers to not only provide flexible working capital solutions but also to act as strategic advisors, offering insights that help optimize cash flow and navigate liquidity challenges. This requires a shift from traditional, reactive banking practices to a more digital-first, client-centered approach.

Read the full report: 2024-2025 Growth Corporates Working Capital Index