There’s growing demand from commercial customers for levers to improve their treasury operations, but equally, a silent exodus towards fintech providers threatening banks’ hold over their treasury business.Value addition requires different propositions from banks for SMBs, Commercial and Corporate customers. However, there are some common levers which can help banks grow their treasury business through successful collaboration and participation in the ecosystem.
Five levers to grow banks’ treasury business
- Self-service account management
Rather than reducing friction, carefully designed self-service portals can eliminate friction from the banking process for commercial customers. Customers need no longer depend on longwinded processes and unnecessary bureaucracy to carry out their common banking services, especially after the increased reliance on digital banking post-pandemic.
- Transaction banking APIs
Several banks have begun to cocreate innovative solutions for their commercial customers by launching APIs that connect their banks in real-time with other ecosystem players. This helps them provide common treasury services in areas such as payments, foreign exchange, bank accounts and virtual account management. The tech-savvy banks are already witnessing millions of API calls through open banking experiences, with their services being embedded seamlessly into ERP and other treasury management systems.
- Prepare to be truly “real-time” and “on-demand”
Batch processes, EOD balances, host-to-host file transfers and the likes are dying a slow death with the advent of real-time services like instant payments and access to real-time data. There is an imperative for a faithful adoption of the “real-time” theme at banks. It doesn’t make sense to offer real-time payments when the statuses cannot be updated in real-time. Payments, accounts, reports, FX rates and dashboards should be “real-time” and “on-demand” in nature. Without the right technology, real-time is but a distant dream.
- All payments rails through a single API integration
It is now, more than ever, essential to stop posing the inefficiencies and shortcomings of the existing mechanics of banks’ payment infrastructure as cumbersome customer experience to the corporate treasurer. Simplification, especially in payments, is crucial to offer a great experience to treasury customers. The frontrunners can offer all payment types – ACH, domestic and international wires, instant payments and multi-currency payments using a single API integration through investments in payment hubs that take care of smart routing to the appropriate rail, rather than burdening the customer with constraints and time windows.
- “-as-a-Service” readiness
As treasuries become more operationally efficient, they expect their banks to provide “as-a-service” models. Goldman Sachs Transaction Banking is a great example of how these models are avenues for revenue generation at banks. Banks that run on real-time platforms and central operating systems can easily offer these without the need for middleware.
These five levers can get any bank not just started, but have them lead the way in offering world-class product and service portfolio to their treasury customers.