Corporate treasurers want fewer and deeper online relationships with their banking suppliers and are calling for wholesale services much more in tune with their actual requirements than those offered at present, according to a new survey by TCA Consulting.
In a survey of 60 major companies on both sides of the Atlantic, 70% of respondents indicate their willingness to use the Internet to buy banking services in the future, yet only a little over a fifth of them believe that their banks are actually taking the Internet delivery channel seriously.
Jon Sweet, associate director at TCA Consulting says: "There is a significant gap in terms of customer service expectations that wholesale and investment banks simply must fill or risk losing some of their largest commercial customers to more nimble e-enabled competitors."
The key message corporates are sending out is that they require the market in banking services to be demand, rather than supply-led, says Sweet. "Too many wholesale banks appear to be largely ignoring the needs of their corporate customers," he observes. "This present state of affairs is creating much disquiet which will almost certainly lead to upheaval."
Nearly a fifth of respondents to the survey (19 per cent) believe that their banks do not possess an Internet strategy. Over a third of corporate treasurers (67 per cent) do not agree with the assertion that banks are "concentrating on developing the Internet as a major delivery channel for wholesale services."
The survey reveals that corporate treasurers are ready to use a range of services via the Web - 60 per cent of respondents say they anticipate using the Internet to buy foreign exchange service, with 28% saying they would like to have loans and other lending arranged electronically. Exactly a fifth of respondents say they would take advantage of online clearing services, while 43 per cent are seeking an e-cash management facility.
The survey reveals that non-bank providers of wholesale banking services are looking to steal a march on banks by pitching for their corporate business in increasing numbers. Sixty per cent of respondents say they have been recently targeted by institutions other than banks for commoditised services - especially in the foreign exchange arena. In contrast, only 40 per cent of treasurers have been approached by banks to buy into their online provision.
Says Sweet: "At this stage, take-up from banks to new entrants to the wholesale scene is low, but banks clearly have determined rivals for corporates' affections."
In qualitative responses to the survey, a number of corporate treasurers express disquiet at attempts to bind them into purchasing banks' proprietary interfaces and software. All too often these interfaces are not consistent, leading to a lack of straight through processing. At the same time, these multifarious technologies require costs and time to build and maintain.
Ian Dando, associate director at TCA Consulting comments: "Clearly many corporates are dissatisfied with their banks' approach to technology. Many of our respondents commented that they felt that banks appear to regard it as the clients' role to interface with their systems, rather than the other way round. This runs counter to how it should be. In our opinion, the successful banks of the future will be those who provide the technology services that their customers require rather than trying to tie their hands. Online services provide corporates with an opportunity to view the whole transactional life-cycle at last - this alone makes it absolutely vital that banks cease the stonewalling and listen to what their corporate customers want - and act accordingly."
Exactly half of all respondents to the survey indicate that they feel a reduction in the number of wholesale banks with which they have an active relationship is desirable. More than three in four of respondents have relationships with up to 20 banks already, with 38% having between 11 and 20 global banking partners.