Commercial and Enterprise Payments Advisory Service Newsletter - July 2016
Welcome to the July 2016 edition of the Commercial and Enterprise Payments Advisory Service newsletter, which focuses on our most recent research, including detailed reviews of supply chain finance techniques and systems as well as digital payables.
Supply Chain Finance Is Coming of Age
Corporations have become aware, particularly in the past 10 years, of the critical importance of optimizing the way they manage working capital. The increasing borderlessness of the world’s economies creates new financial management challenges driven by economic conditions, government policies, regulations, and geopolitical risk. CFOs and treasurers must navigate this complex ecosystem with greater diligence, using ever-evolving modern technology tools to gain more control and visibility into both internal financial operations and critical international supply chain.
Banks can enhance relationships by helping to provide and integrate these capabilities (which are clearly needed and in demand) in addition to the funding opportunities. Digitally connected end-to-end processes, including sourcing and procurement, to payables, receivables, and treasury, allow for more intelligent and better-executed financial decisions. Benefits include reduced operational costs, improved risk management, better cash forecasting, and greater returns.
See more at: Supply Chain Finance Is Coming of Age
Tracking Fintech Innovation for Corporate Banking
Among private fintech investments (of which Mercator Advisory Group estimates that financial institutions represent between 15% and 20%) and all the other innovation efforts that have been announced, it is apparent that corporate banking innovation breakthroughs have yet to occur. There are ongoing product enhancements and improvements in digital delivery of payments services, but these are neither easily identified nor directly tied to the innovation era in progress.
Mercator believes that identifiable and tested corporate banking innovation will begin to appear more readily in blockchain, trade, and payment schemes, mobile services, risk management, and capital markets. As these innovations start to appear in 2016, they will begin attracting more focus and investment than consumer initiatives.
See more at: Tracking Fintech Innovations for Corporate Banking
Digital Corporate Payables: A Complicated and Changing Landscape
Payables automation for corporations of all sizes is a complicated topic, with multiple solutions and approaches to achieving better results. Banks have many of these solutions, but not all, and as the fintech world of payments technology continues its rapid advance, partnerships with fintech solutions providers can have real value for financial institutions. Banks should find the time well spent to understand how their solutions fit into the procure-to-pay business flow and how this fits with the part icular profile of a corporate client’s needs.
Fintech payables-related capabilities are now essentially ubiquitous across the spectrum, so banks have plenty of opportunity to partner where advantageous. In the meantime, they should be considering how best to deliver automation through their own infrastructure, with either self-developed centralized payments services or cloud-based delivery where appropriate.
See more at: Digital Corporate Payables: A Complicated and Changing Landscape
During the remainder 2016, we will be addressing various topics such as, commercial cards in the USA, including mobile and security developments.
As always, feel free to reach out to Mercator Advisory Group to talk about anything payments and potential research topics that would be of interest to you and your team.
Thanks, and feel free to send a message any time. My email is email@example.com. You can also call me at (781) 419-1710.
Director, Commercial and Enterprise Payments Advisory Service