Regulation & Changing Customer Expectations in Treasury Services

by Jonathan Camhi


How regulation and the retail banking experience are driving innovation in treasury services.

Corporate banking is usually considered a slow-moving market innovation-wise. Corporate and treasury banking lag far behind retail banking in mobile and multi-channel capabilities, and retail banking has been impacted far more by technology brands like Apple, Google, and Amazon. But two factors — regulation and changing customer expectations — are spurring innovation in back-end data management and front-end customer experience in treasury and corporate banking.

In data management, regulation is requiring banks to provide better, cleaner data more quickly. And it’s not just regulators who want to see that data. Treasury clients are asking banks for better data so they can improve their cash forecasting and payment tracking.

“Four to six years ago there were new regulations coming in, and there was a lot of regulatory concern. In conversations over the past few months, we’re hearing that regulatory requirements are enabling innovation,” Robert Flynn, managing director at Accenture, said recently. “Banks are asking, ‘How can regulatory requirements help us run the business better?’ They’re improving data quality and better able to prove data lineage. That allows them to better understand the corporate customer, and helps the customer better understand their business. Understanding the data helps the customer and helps the bank internally.”

While regulation is helping satisfy the needs of treasury customers through better data collection and management, those customers are also demanding a more seamless customer experience that retail consumers are used to thanks to developments in mobile and multichannel.

“Those [corporate] customers are also retail clients. So their expectations are influenced by [retail banking]. They expect smartphone and tablet capabilities to be complementary. They expect to get alerts through mobile. They want to be able to capture trade finance documents with the [device] camera,” Alastair Brown, head of e-channels for Royal Bank of Scotland’s Global Transaction Services, noted. “It won’t be different for very long between the corporate and retail experience. It’s wearing thin.”

Tailoring that seamless experience to the needs of treasury clients is a challenge banks are still trying to figure out, Brown added. “What kind of dashboard and tools do you offer these customers, who have not traditionally been users of those tools?”

Also, in contrast to data management, regulation is making it difficult to create the seamless front-end experience on the corporate side that already exists on the retail side. For instance, KYC regulations make it difficult to deliver a seamless, multichannel onboarding experience for new customers, Judd Holroyde, head of Wells Fargo’s global product team, noted.

“That’s a key differentiator — how fast can you onboard the customer. We want to be the easiest bank to do business with. But opening a new account can be a painful process. With the regulations and risks around KYC, you can forget about the customer experience. But then you’re starting off [with the customer] on the wrong foot,” he explained.

Frustrations with the customer experience could push clients to look elsewhere for alternative financial services providers. A recent electronic payments survey of corporate treasurers conducted by Temenos found that 47% of the European respondents have looked into alternative payments providers.

“There is a shadow of non-bank competition [in treasury payments],” Nick Brewer, director of product strategy for Misys, observed. “Banks need to combine the different views of different businesses into a single sign-on portal… to serve the corporates the data that they’re looking for. That’s where banks can make a really sticky relationship with their corporate clients.”