Corporate treasurers face a state of transition and, in many ways, uncertainty. Rapid organizational expansions and rising payment volumes are stressing many existing processes and driving the market need for more efficient and far more frictionless payments experiences. While real-time payments and simple and mistake-free straight-through processes remain the goal, a host of specific challenges and emerging opportunities will shape the year to come.
Here are nine things corporate treasurers should anticipate going into 2020:
1) The categorical rise of real-time banking.
To meet increasing demand for more streamlined and B2C-esque corporate payments experiences, real-time banking will continue to make major strides in 2020 by delivering immediately-available funds, instant confirmation, settlement finality, and faster communication flows. Corporate treasurers will increasingly embrace newer strategies that simplify key processes and reduce the time it takes to implement and manage payments.
2) Business growth – both global and organizational – will force the issue when it comes to reducing payment friction.
Corporations are becoming global at an ever-increasing rate and coming up against all the associated frictions of doing so, such as cross-border payments. A recent (and broad) survey of treasurers conducted by the consultancy Strategic Treasurer finds that 37 percent of firms operate across 11 countries or more. At the same time, 34 percent of corporations utilize six or more banks, and 39 percent generate payments in six or more different currencies. Conducting business across multiple countries and currencies calls for payment systems that operate efficiently and seamlessly while interacting with a wide array of portals, accounts, formats, and clearing systems.
Compounding these challenges, many corporations are also growing through acquisitions of either domestic or international entities – which then require integrations of payment systems with those new IT infrastructures. These integrations often include severe challenges when it comes to managing dispersed payment data stores and resolving conflicts. I predict the increasing prevalence of these growth challenges will drive many more corporations to seek newer payment solutions and adopt friction-reducing alternatives in 2020.
3) Corporate treasurers will set explosive new records for the volume of payments managed.
Corporate payment volume is experiencing rapid acceleration: the Strategic Treasurer survey also discovered that 45 percent of corporations now generate more than 10,000 payments globally each month. Just over half of corporate treasurers are also responsible for maintaining 100 bank accounts of more. While these professionals navigate vast and complex payment systems and harness straight-through processing to expedite payments, it’s all too common for that system complexity to lead to formatting errors, resulting in delayed payments and increased fee costs. In the face of this trend, expect corporations to step up their pursuit of more streamlined payment methods.
4) Fear of fraud and security breaches will increase.
An admittedly unsurprising prediction given the incredible volume of corporate payment transactions and the wider attack surface they present, but corporate treasurers will be increasingly on edge over security. Going back to the Strategic Treasurer study: 60 percent of treasurers acknowledged their payments security concerns are higher than in previous years. With nefarious techniques including account takeovers and spearphishing attacks growing in effectiveness, treasurers responsible for addressing vulnerabilities and safeguarding payments systems will only become more vigilant and eager for long-term ways to stay out for-the-wrong-reason headlines.
5) New regulations will present challenges and opportunities.
From oversight by the National Automated Clearing House Association (NACHA) in the U.S. to the Second Payment Services Directive in Europe, new compliance regulations worldwide are putting a lot more pressure on corporate treasurers to understand their responsibilities under the law and to bring payment operations into full compliance. While these ever-expanding regulations demand proactive work, the benefits are worth it for businesses evolving their payment processes: increased on-demand data access, better fraud prevention, and more effective long-term security.
6) Open banking and API-based services will drastically simplify corporate payments.
Banks are pursuing open banking and the potential of APIs to provide platforms that offer real-time and on-demand connectivity for faster and simpler payment processing, as well as robust self-service options. Expect corporate treasurers to more heavily leverage these offerings in 2020 to further optimize their payments operations.
7) The growth of settlement networks for handling real-time payments will only accelerate.
Banks and fintech providers will increasingly band together in real-time payments settlement networks. The transaction amounts those networks are capable of sending will also continue to rise. Given this opportunity, corporations will increasingly utilize these (fewer and more streamlined) networks for more efficient payment processes.
8) Treasurers will achieve fully-transparent cross-border payments with SWIFT gpi’s universal tracking.
SWIFT gpi has now introduced universal tracking with the promise of alleviating cross-border payment challenges by providing treasurers with full visibility into payments as they proceed through each stage of processing. Expect a far greater number of corporate treasurers to embrace this capability throughout 2020 – and to realize faster payment processing as a result.
9) Payment approvals and other key capabilities come to mobile.
For corporate treasurers responsible for initiating and tracking numerous payments – which are being processed globally and across borders on a 24/7 basis – the efficiency gains made possible through mobile access will be tremendous. Those tools will arrive and see heavy adoption in 2020.