Treasurers, CFOs Raising Their Payments Expectations

Corporate treasurers and chief financial officers are on the hunt for a better way to make payments, especially internationally.

That’s according to corporate software firm FIS, which published the findings of its latest survey on corporate payments needs last week. According to the data, more than half (53 percent) of treasurers said they have standardized at least three-quarters of their payments volumes.

Still, corporate payment practices are spread out. More than 40 percent of companies surveyed said they operate with more than five cash management banks; a third said they are working with more than 20 banks.

The majority of corporations also said they manage more than 100 accounts, a feature that “makes it very difficult to implement consistent payment processes, controls and formats, adding significantly to the cost and risk associated with payments,” FIS concluded.

Across the globe, FIS found that 83 percent of treasurers have achieved at least some level of centralization within their payments processes, though cross-border transactions are posing a major obstacle in this effort.

FIS said a rising number of finance managers are looking to in-house banks, payments-on-behalf-of and collections-on-behalf-of in an effort to strengthen their centralization initiatives.

According to FIS SVP of Mid-Market Treasury, Payments and Messaging Jerome Albus, along with President of Treasury Software Solutions Andrew Bateman, the U.S. is lagging behind its EU peers when it comes to payments centralization.

“What we see in the U.S. is less centralization in payment processing activities,” the executives recently told Banking Exchange. “As a result of that decentralization, you see less standardization in payment processing activities.”

Treasurers across the board, however, have clear goals in mind when it comes to their motivations behind payments centralization. Improving controls and reducing fraud were cited by the majority of respondents as their motivation, though FIS said reducing costs remains a top priority.

“Controls and fraud mitigation are a priority everywhere now,” said Albus and Bateman. “Recent merchant card processing breaches, coupled with the SWIFT hacks, cyberattacks and phishing, have treasurers on their toes.”

“Treasurers are trying to understand how they can do more to manage fraud,” the executives continued. “What role can the treasurer play in security? Treasurers are trying to understand how their systems can add more value beyond traditional segregation of duties, reconciliation and other fraud detection measures.”