What Will it Take for Corporates to Prepare Their Global Payments Processes for the Future?
By Luc Belpaire, Director of Product – Payments, FIS
For the sixth year running, FIS has surveyed corporate treasury and finance professionals globally – and once again, many departments are battling the same challenges as they faced in 2014. So, what will finally prompt them to modernise their operations for the future?
Of the corporations surveyed, 84% have already centralised their payments. However, most companies are still working in extremely complex payments and bank connectivity environments. Almost half (48%) are managing more than 100 bank accounts and 19% work with at least 11 banks. This explains why so many corporations are still dealing with fraud risk, high costs, little control and a lack of visibility into cash.
Notably, not many have taken the next step towards making their payments future-ready by implementing a payment factory solution. According to the report, only 10% rely on a payment factory to originate and deliver payments to banks.
What opportunities are corporations missing?
Corporations are missing out on leveraging transformative technology, such as a payment factory or bank integration solution that can help them centralise and standardise their payments processes.
Of the respondents, the 79% which have implemented a payment factory have achieved payback within or under two years, and 67% achieved a return on investment (ROI) of more than $100,000, with 15% achieving an ROI of more than $1m.
A payment factory performs these functions:
- Consolidates data feeds from multiple payment systems such as accounts payable (AP) or enterprise resource planning (ERP) into a single view of payments
- Automates and assigns workflows for the payments processes across the entire organisation, from AP to HR to treasury
- Puts controls in place so payments don’t leave the organisation due to human errors or fraud
- Converts payment messages into formats that the banks require
- Connects to global banking networks such as SWIFT to help streamline connections to the multiple banks with which a corporation deals
- Takes advantage of the latest trends around real-time payments and other services that banking application programming interfaces (APIs) and SWIFT gpi have to offer
- Acts as an in-house bank, helping reduce banking fees
Look for these eight returns on investment (ROIs) when building a business case for a payment factory:
1. Improved control and compliance
2. Simplified integrations and workflows
3. Reduced payment fraud
4. Greater visibility and insights
5. Centralisation and automation
6. Increased productivity
7. Lowered costs
8. Flexibility and real-time readiness