SWIFT - Working with the Corporate Treasury Community
by Marc Delbaere, Head of Corporates and Supply Chain Markets, SWIFT
In this article Marc Delbaere, the newly appointed Head of Corporates and Supply Chain Markets at SWIFT, answers some key questions on the latest trends to affect corporates, including the advent of fintech companies, and explains how SWIFT can help multi-banked corporates with particular reference to the SWIFT for Corporates program.
What are some of the latest trends impacting corporates?
There is a lot going on in in the cash management industry. Overall, the business context remains complicated. First, you have low interest rates effectively putting pressure on easy returns especially as there is very little appetite for risk on the treasury. Then, as businesses grow internationally, you need to get familiar with an increasing number of regulations. On top of that, you need to cater for cyber-crime and effectively take the right cyber-security measures.
Of course, there are also ample opportunities: there is clearly a new wave of standardisation which is leading to innovation opportunities, new concepts like virtual accounts are emerging and are being picked-up on a very large scale, and new technologies like blockchain, while still at an early stage, also have a lot of potential.
The industry answer so far has been a keen desire for simplification. Most corporates have embraced a centralised and global approach to cash management, enabling a single, consolidated view into cash positions from multiple banking partners around the world. At the end of the day, corporates want to work as efficiently as possible with their banks and across networks using the latest tools and technologies.
How will the fintech eruption impact corporates?
First of all, it is clear that technology will play a critical role to move the industry forward. Some of this technology will come from established players or be assimilated by them very quickly while some might remain in the hands of disrupting fintech players. Technology is just one part of the equation. What will matter will be to be able to bring this technology to market with the right business models, the right customer reach and the right support for market regulation. Practically, this will require alliances and partnerships and the existing financial institutions are in a very good place for this. We at SWIFT believe that fintech represents a great opportunity for the industry. With programmes like the Innotribe Startup Challenge, we are helping bridge the gap between startups/entrepreneurs and the finance industry. Now, most institutions realise that partnerships with the right fintech provider could yield positive results.
If you look at trade finance for example, the potential for digitisation is immense and I expect quite a lot of innovation in this area in the coming years.
With that, we cannot discount the perceived fears and risks that are still associated with fintech. Some banks or institutions fear they may end up on the wrong side of a provider that is operating outside of the system – maybe being a little too disruptive for the greater good. However, many startups and established fintech providers seem to realise the benefit of working collaboratively with banks, corporates and financial institutions and for that matter, being part of the system. I also see the banking community opening itself up more to these partnerships, particularly as these new technologies get tested within the industry. Generally, most, if not all, are keen to incorporate new ideas into dated processes, especially if it enhances the end user experience.