December 8, 2010
Corporate treasurers willing to switch banks for better facilities
A survey has found that two-thirds (68 percent) of corporate treasurers would be willing to change banks in return for better service in the areas of on-boarding, account maintenance and query handling.
In July-August 2010, online financial information site Finextra.com and U.S.-based financial IT firm Pegasystems surveyed corporate treasuries and banks worldwide, receiving 61 survey responses from 38 banks, and 37 from corporates, making a total of 98 respondents.
Finextra and Pegasystems say that, while banks are competing more and more for corporate clients, the critical issue is no longer about who offers the best fees but who gives the best customer service. The percentage of corporates willing to switch banks in return for better service has risen to 68 percent from 44 percent in a similar survey conducted in 2009.
The Finextra and Pegasystems survey also found that 57 percent of corporates have increased business with one or more of their banks within the last year. “Quicker turnaround time for requests and enquiries and better access to service and information channels were the primary reasons,” the survey says.
Over half (57 percent) of corporates said they would be prepared to pay higher fees for a sophisticated web portal that enabled them to manage their entire portfolio online, and 46 percent would pay higher fees for a consistent client service from their bank across lines of business, regions and channels.
“Interest rates and fees were considered less important reasons than a bank’s ability to use technology well to serve its clients,” Finextra and Pegasystems say. “This may stem from increased expectations of consumer technology that has become increasingly easy to use. These expectations have spread to the corporate world and spark frustration when services aren’t delivered effectively. Treasurers and cash managers know that the technology is available to provide the service they desire, and if it’s not delivered, they question the bank’s commitment to the client relationship.”
The survey says that it is a challenge for banks to deliver a consistent client service across lines of business, channels and regions. “But this can potentially save significant money for a corporate,” it argues. ‘Having a 360-degree view into their portfolio will allow them to make better and more informed decision on their cash and better optimize its use. Therefore it is a service they are willing to pay for.”
The good news from the survey was that more banks are investing in automating client on-boarding, enquiry management and channels, and that they expect to see a healthy return on their investment, Finextra and Pegasystems say.
When banks were asked where their client service improvement budget was most likely to be used, the top three areas mentioned were: on-boarding process automation (42 percent); end-to-end enquiry management systems (21 percent); and a sophisticated portal for corporate clients (21 percent)