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Corporate Treasurers Want More From Their Bankers

Efficiency is a big priority for U.S. corporate treasurers this year and banks are in their line of vision.

Novantas recently conducted a survey of treasurers at a variety of companies and found that many of them are frustrated with their banking relationships. They said that the financial institutions should work harder to make their companies operate more smoothly. Interactions with banks are often redundant, manual and not in the client’s best interest, they said.

Key areas of frustration include fee visibility, operating complexity and the evolution of payment technologies — all of which may ultimately make banks vulnerable to disruption from technology companies.

Novantas followed up the survey with in-depth interviews and conversations with the respondents.

The results should serve as caution to commercial bankers that their customer relationships aren’t iron-clad. Corporate treasurers have a wealth of choices for their financial needs and they appear ready to explore those options if their bank isn’t up to snuff.

One of the primary gripes coming out of the corporate treasury department is the difficulty in managing hundreds or even thousands of bank accounts. The process gets even more challenging when the accounts are tied to antiquated back-office systems that rely on too much paper and too many emails.

“We need fewer bank accounts and more automation with a better TMS (treasury management solution),” said one executive at a financial company. Others said they want more visibility and control of payments and receivables.

Banks can address this problem by bundling services that rationalize accounts with solutions that address cybersecurity and payment fraud. This can help banks reduce exposure to risk — a key goal of account reduction.

Banks that don’t address the concerns are at risk of seeing corporate deposits walk out the door. Indeed, two executives in the Novantas survey said their companies are considering setting up an in-house bank to help eliminate some of the frustrations they encounter with their existing providers.


Many of the treasury executives who participated in the Novantas research said they want to get a better handle on cash management and forecasting in order to boost interest income and maximize working capital and liquidity management. As a result, they are pursuing more data analytics and automation software to optimize cash-management practices.

Banks can take this opportunity to provide corporate clients with more accurate and frequent data that will help them meet these goals. By demonstrating their advanced technology, they will help solidify the corporate relationship.

Corporate treasurers also expressed frustration with the siloed nature of banking, saying that they are frequently providing the same data to different divisions within the same bank. Such efforts are inefficient and costly.

“We need streamlined KYC account-opening and banks need to make this easier. Banks have different divisions and they can’t seem to share the data,” said a treasury executive at a software firm.


The lack of transparency around bank fees is another concern as treasurers try to rein in costs. A number of corporate treasurers said they are exploring tools to help figure out what services they are paying for and how much they are paying for them.

In a related matter, shared-services centers are at the top of the list as a way to pare costs. Many executives said they are already involved in shared-services centers within their companies and are looking to expand those activities, particularly for back-office processes. In addition to cost reduction, such programs can help mitigate risk.

New payment platforms represent one of the bright spots in banking for corporate treasurers, who are adopting technologies like Zelle and Apple Pay for recurring payments.

“Lower credit-card fees fall right to the bottom line,” said an executive at an information-services firm.

Some worry, however, that technology is advancing so rapidly that these new platforms may become obsolete. “We are concerned about betting on the wrong new payment horse and wasting 12-18 months” said the treasurer of a major insurer.

In the end, executives acknowledged that they sometimes stay with their banks because it would be difficult and costly to disentangle the relationship. The company’s credit relationship with the bank also can play a role, they said.

“Banks make it difficult to move. There is IT, connectivity, encryption and interfaces — what do we know about that?” said an assistant treasurer at a manufacturing company.
But it’s a losing strategy to retain customers only because it is difficult for them to move elsewhere. Corporate mergers-and-acquisitions activity is booming, which means that combined companies will work aggressively to streamline their banking relationships.

Furthermore, a state of poor satisfaction is ripe for disruptive technologies. Banks should expect intense competition from fintech companies that simplify the complexity of managing corporate cash and offer lower fees.

Banks that want to be on the winning side of those bake-offs need to prove that they can help corporate clients navigate challenges and become more profitable. Those that can’t are likely to get pushed to the side by nimble competitors.

As one treasury executive put it, “Banks are constantly selling services and not solutions. They aren’t looking at the issues. Banks need to get their acts together or else all these non-bank financial institutions are going to take their business.”

Jeff Diorio
Director, Chicago

Paul LaRock
Director, Chicago

Mike Rice
Managing Director, Chicago

For more information, contact Novantas Marketing

+1 (212) 953-4444

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