Reflections on the revolution in fintech

The fintech revolution has swept through the financial services, not only modernising archaic processes but redefining what banking means in the 21st Century. Consumer payments are just one example – we can now make payments and split bills in an instant by tapping phones, watches or even rings on card machines.

At the heart of this transformation is a new wave of challenger banks that have created a smarter, more personalised banking experience. They go beyond just providing a place to store our money or take out a loan. Now, with analytics we can see a breakdown of where our money is going, and we can split our funds across multiple pots to save for specific things. Couple this with sleek onboarding processes, beautiful interfaces and agile infrastructure, and it barely feels like banking at all.

While the customer experience is second to none in our everyday banking, this revolution is yet to reach the corporate treasury space. In many regards, treasury management remains hindered by increasingly outdated and fragmented processes, and is inaccessible to SMEs. This becomes all the more apparent as other areas of finance move ahead in terms of efficiency, customer satisfaction and cost-saving benefits resulting from fintech adoption.

What fintech offers to the SME treasurers

Today, people want their banks and financial institutions to provide them with the same streamlined user experience they receive from their everyday apps. While the proliferation of challenger banks in recent years has met that need for individuals, corporate solutions are lagging behind.

A 2019 Citibank survey echoes this. There’s a clear appetite amongst treasurers to engage with the latest innovations in technology to remedy historical shortfalls. But the technology to-date either hasn’t been sufficiently robust, easy-to-use, cost-effective or addressed the key concerns of treasurers. Of the 400 treasurers surveyed, 54% called for continuous improvement in operational treasury efficiency, with cost and integration of technologies seen as the biggest hurdles to overcome.

Take international payments and bank accounts, for example. In an increasingly globalised world, very few companies operate using a single currency. However, making international payments remains a costly and cumbersome process, while multi-currency accounts remain inaccessible, require manual input to operate and take weeks to open.

To address these issues, treasurers have sought to utilise different platforms and integrated technology systems to ramp up efficiency and automation, while reducing costs. But this has only created layers upon layers of complex technology systems, processes and plugins.

This approach is not sustainable – it increases maintenance costs and hinders operational stability in the long-term. If one cog in the machine breaks down, the knock-on effects could be incredible disruptive for a business.

Overcoming the barriers 

Buying your way out of a problem that has hampered SME treasurers for decades is not the answer – it’s not the number of plugins, add-ons and systems that will bring corporate treasury into the twenty-first century, but the functionality, interoperability, security and ease of use of a treasury management system. This has become even more critical as treasurers become accustomed to working remotely.

Without a solution tailored to their evolving needs, small businesses are left with no choice but to resort to using services that were never designed for them. This means coughing up high transaction fees and accepting payments systems that take several days to settle, creating significant uncertainty.

Put simply, enabling treasurers to perform all of their key functions without having to switch between different platforms and technology providers is crucial. The days of plugin tangles and convoluted processes need to end.

One-stop-shop for SME banking

Rather than relying on a collection of different software and plugins that each perform different functions, creating layers upon layers of complex technology systems, businesses need a solution that allows them to complete all their key functions in a single place.

There is a huge opportunity to streamline existing processes and access all of the key services treasurers need multi-currency IBANs, automated payments and collections, FX hedging and risk management and enhanced security – from one comprehensive dashboard. With the technology and knowledge available today, such services recognise the digital and global requirements of a modern, global corporate treasury division.

It’s time to bring the customer-first mindset that has been driving this revolution in the consumer space into the corporate banking space and work towards more accessible payments and banking for businesses of all sizes.