BARCELONA -- A majority of corporate treasurers feel that real-time cross-border payments tracking is more important than whether the payments settle in real time, according to a new survey released at the EuroFinance International Treasury Management conference.
A new survey of 300 corporate treasury professionals from SWIFT and EuroFinance revealed that 64 percent put real-time tracking at the top of their wish lists. That’s because 54 percent of respondents named tracing payments when problems occur as the most pressing issues when it comes to cross-border payments. Also high on the list for treasury professionals are more consistency between bank payment processes and better visibility on banking fees.
Sebastian Rojas, corporate engagement manager for SWIFT gpi, told AFP that SWIFT and EuroFinance’s goal was to identify the both the challenges and the top priorities for corporate treasurers when they are making cross-border payments. “We confirmed some of the challenges that have existed for some time now, like the transparency that is missing from the moment corporates are sending a cross-border payment through their banks,” he said. “When the payment is leaving the corporate, it enters a sort of black box. This is a big challenge for corporates—trying to know where the payment is and what is happening with it.”
Meanwhile, only 42 percent of respondents said that they want to actually be able to make real-time payments. Rojas noted that there is an interest from corporate treasury professionals to go faster with cross-border payments, particularly when it comes to critical payments. “However, when we talk about real-time payments, the requirements are different,” he said. “The treasury processes of corporates are not running in real-time. A corporate treasury team is not working 24/7. So we pretty much understand from treasurers that payments that are done within the same day are achieving the most critical factor in cross-border payments.”
Magnus Carlsson, AFP's manager of treasury and payments, said that the survey findings more or less confirm some of the issues AFP is hearing from practitioners on an ongoing basis. “In fact, when I spoke at Payments International in London a couple of weeks ago, I addressed the very pain points this new survey highlights—particularly the uncertainty, and the inconsistencies in amounts sent and received due to bank fee structures,” he said. “It's a good thing that these pain points are brought out in the open so they can be addressed. Swift gpi sounds promising, especially if it doesn't require corporates to make any changes to internal systems. But questions still remain regarding transaction costs—will using gpi be more expensive?”
Fintech: Still not a treasury priority
Meanwhile, even though the entire payments world is abuzz over fintech solutions, treasury professionals’ interest is much more muted. Only 30 percent of respondents cited payment innovation as a priority when selecting a bank. Furthermore, only 8 percent said they are currently using an alternative payment provider. Lastly, the majority of practitioners surveyed said they have no plans to explore alternative solutions.
“We asked them about new payment providers and actually we discovered that the majority of corporates are not necessarily interested,” Rojas said. “The concerns are around security and compliance with regulations. They don’t want to take risks when they are making critical payments, like mergers and acquisitions.”
However, fintech startups shouldn’t throw in the towel on the corporate treasury sector just yet. “We see that some corporates are starting to talk to those providers to see how those providers can help them in their day-to-day business,” Rojas said.