2017 B2B Payments + WCM Strategies Survey Report · 2019. 5. 23. · 2017 B2B PAYMENTS + WCM...

2017 Survey Report

Sponsored by Written & Produced by

B2BPAYMENTS

WCMSTRATEGIES+

© 2017 Strategic Treasurer. All rights reserved. 2

2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT

TABLE OF CONTENTS | Introduction .............................................................................................................. 3

| Top Ten Statistics ............................................................................................... 4

| Summary of Key Findings .......................................................................... 5

| Analysis of Key Findings ............................................................................... 8

1 | The Corporate Landscape is Highly Globalized ............................................................................................8

2 | The Payments Landscape for Corporates is Heavily Complex ................................................................9

3 | AutomationandEfficiencyareIncrediblyImportantCorporateDriversforPayables .....................10

4 | And the Most Preferred Corporate B2B Payment Method is... .............................................................. 11

5 | Corporate Card Programs are on the Rise.. ................................................................................................. 13

6 | Payment Security is a Major Concern for Most Corporates ................................................................... 15

7 | PayableshaveBecomeaMajorInfluenceonCorporateBankingRelationships .............................16

8 | CorporatesIncreasinglyLooktoNon-BankProvidersforB2BPayments. ......................................... 17

9 | MostCorporatesareSatisfiedwiththePaymentServicesProvidedbytheirBanks ......................18

10 | B2BandWorkingCapitalSpendPlans .......................................................................................................... 19

| Final Thoughts ..................................................................................................... 20

| About the Organizations .............................................................................. 21



INTRODUCTION The B2B payments landscape is transforming. Continued economicglobalizationasorganizationslooktoexpandtheirfootprintsworldwideintroducesbothnewopportunitiesandnewthreats.Innovativepaymentstechnologiesintroducedtothemarketoverthepastseveralyearshavehugelyimpactedthefundstransferprocessesformanyorganizations.Notonlyarenewpaymentmanagementprocessesbeingadopted,butmany established payment processes are being left behind. Atthesametime,fraudiseverpresent,withfraudstersfindingnewwaystostealfromorinterceptpayments.Concernsregarding payment security are prompting many corporates torestructureorreevaluatetheirsecurityframeworks.Inthistimeofchange,corporatesandbankshavemovedfrommanagingsignificantcomplexityintobattlinghyper-complexityonmultiplefronts.

ButjusthowsignificanthastheevolutionoftheB2Bpaymentslandscapebeen?Howhasitimpactedcorporatesandbanks?Howareorganizationsadaptingandevolving?ThesewerethequestionsthatBankofAmericaMerrillLynch,BottomlineTechnologies,andStrategicTreasurersoughttoanswerastheydevelopedthe2017B2BPayments&WCMStrategies Survey. This survey captured the responses of 335 corporateandbankpractitionersregardingtheirviewsonnewpaymentstechnology,paymentsecurity,workingcapitalmanagement,andthecurrentregulatoryenvironment,aswellashowtheyarethinkingaboutpaymentsandworkingcapitaltodayandtomorrow.

Continued economic globalization as organizations look to expand their footprints worldwide introduces both

new opportunities and new threats.

As the payments landscape has evolved, corporates and banks

have moved from managing significant complexity to battling

hyper-complexity on multiple fronts.

The 2017 B2B Payments & WCM Strategies Survey polled respondents

over their payment strategies, practices, spend plans, and security, as well as their use of various types

of payment technology, their working capital management strategies, and their concerns regarding the current

regulatory environment.



TOP TEN STATISTICS

23%of corporates originate payments with11ormorebanks,and13%with21ormorebanks.

46%of corporates see ACH as the mostefficientformofpaymentoverwire,card,andcheck.

37%ofcorporateswereplanningtospend$100,000(£77,676)ormore on payments technology over the next year.

55%ofcorporatesweremakingmorethan half of their B2B payments electronically.

45%of corporates either had serious attempts made against them or suffered a loss on B2B payments duetofraudwithinthelastyear.

24%AT LEAST ofrespondentswere

operating in each of the majorworldregions.

1IN4MORE THAN corporates are increasing their

spend on card programs over the next year.

52%of corporates see the automation oftheAPprocessforefficiencyand productivity as a top driver.

45%ofcorporatesseeabank’sB2Bpayables offerings as being a very important or an extremely importantfactorinthebankselection process.

35%of companies indicated that theywouldpayafeeorextendadiscount to get paid earlier.



SUMMARY OF KEY FINDINGS1 | The Corporate Landscape is Highly Globalized.

Atleast24%ofrespondentswereoperatingin eachofthe10majorworldregionshighlightedin thesurvey,withthehighestpercentageoperating inNorthAmerica(89%).Additionally,67%ofcorporateswereoperatinginmorethanonecountry,and33%wereoperatinginmorethan20countries.

2 | The Payments Landscape for Corporates is Heavily Complex.

66%ofcorporatesoriginatepaymentswiththree ormorebanks,and23%with11ormorebanks. 13%ofcorporatesoriginatepaymentswith21+ banks.Similarly,63%ofcorporateswereoriginatingpaymentsinmorethanthreecurrencies,and40%in six or more currencies.

3 | Automation and Efficiency are Incredibly Important Corporate Drivers for Payables.

52% of corporates indicated that automating the AP processforefficiencyandproductivitywasthemostimportantdriver.Withregardstothisautomation,61%of corporates indicated that invoice delivery/capture wasthemostimportantcomponent,alongwith57%for invoice approval and 49% for payment approval.

4 | And the Most Preferred Corporate B2B Payment Method is…

Intotal,corporaterespondentssawACHasboththemostpreferredandmostefficientmethodofconductingB2Bpayments.Ontheotherhand,corporaterespondentssawchecksasboththeleastefficientandleastpreferredmethodofB2Bpayments.

The 2017 B2B & Working Capital Management Survey captured the

responses of 335 corporate and bank practitioners.

45% of corporate survey respondents were CFOs, 12% were treasurers, and

15% were assistant treasurers or head of treasury operations. An additional

23% were treasury/cash managers, and 9% were treasury analysts.



5 | Corporate Card Programs are on the Rise.

Whileasignificantproportionoforganizationsalreadyhadcardprogramsinplace,morethan1in4corporatesareplanningtospendmoreorsignificantlymore on card programs this coming year. At the same time,corporatesasawholewerelargelysatisfiedwiththe level of vendor adoption for their card programs.

6 | Payment Security is a Major Concern for Most Corporates.

16% of corporates had experienced losses from fraudonB2Bpaymentswithinthepastyear,withanadditional 29% experiencing serious but unsuccessful fraud attempts. 46% of corporates indicated that their payment security concerns are either higher orsignificantlyhigherthanlastyear.Furthermore,security-relatedconcernshadeitherastrongorverystronginfluenceontheplannedtechnologyspendfor61% of corporate respondents.

7 | Payables have Become a Major Influence on Corporate Banking Relationships.

Whenaskedhowimportantabank’sB2Bpayablesofferingswereaspartoftheselectionprocess,33%of corporates labeled it as a very important factor and 12%asanextremelyimportantfactor,whilst10%ofcorporatessawpayablesasunimportant.

8 | Corporates Increasingly Look to Non-Bank Providers for B2B Payments.

1in5corporatescurrentlyuseanon-bankproviderforB2Bpayments.Onasimilarnote,22%ofcorporatesindicatedtheywouldbewillingtouseafinancialtechnologyprovider’spaymentplatformforB2Bpayments. As the importance of payments innovation growsinthecorporateenvironment,morecorporatesareturningtofinancialtechnologyproviderstomeettheir payment technology needs.

42% of respondents to the survey had revenues

exceeding $2.5 billion.

97% of respondents were headquartered in either

North America or EMEA.

39% of corporate respondents had less than three treasury employees.

Conversely, 28% had more than 11 treasury employees.



9 | Most Corporates are Satisfied with the Payment Services Provided by their Banks.

Whenaskedhowwelltheirbanks’B2Bpayablesofferingsaddressedtheirneeds,41%ofcorporatessaidveryorextremelywell,comparedtojust7%ofcorporateswhosaidpoorly.Anadditional41%indicatedtheirbankadequatelyaddressedtheirB2Bpayablesneeds.Furthermore,46%ofcorporatesbelievedtheirbankswereinvestingininnovativeB2Bpayables offerings compared to just 9% that said no.

10 | B2B and Working Capital Spend Plans.50%ofcorporateswereplanningtospendmorethan $50,000(£38,350)onpaymentstechnologyinthenextyear,and28%wereplanningtospendmorethan$250,000(£191,750).

Corporates comprised 80% of the total survey respondent pool. Of all

corporate industries, manufacturing was the largest industry represented

at 12% of all total respondents.



ANALYSIS OF KEY FINDINGS1 | The Corporate Landscape is Highly Globalized. Morethan24%ofrespondentswereoperatingin eachofthe10majorworldregionshighlightedin thesurvey,withthehighestpercentageoperating inNorthAmerica(89%).Additionally,67%of corporateswereoperatinginmorethanone country,and33%wereoperatinginmorethan20 countries. These numbers lend credence to the fact that most businesses today have moved beyond theircountryoforiginandarelookingtoexpand internationally. Advancements in technology have made this expansion much easier. With the internet and other forms of communication readily available,corporatescancommunicatewiththeir businesspartnersacrosstheglobeinreal-time and have instantaneous connectivity to subsidiaries and clients regardless of location. Giventhetechnologyavailableattheirfingertips, corporatesarelimitingtheirgrowthiftheychoose toremainregionalortoonlyserviceaselectfew countries.Asthisrealityisrealized,corporatesare takingtheiroperationsglobalinincreasing numbers. Although the use of technology has made it easier for corporates to expand their global footprint,therearestillanumberofcomplications thatcanarise.Differentcountriesandregions havetheirowncurrenciesandsetsofregulations. Newbankrelationshipsandbankaccounts needtobeestablished.Ascorporatesexpand,the complexityoftheirpaymentoperationsgrows. Thus,giventhehighlyglobalizednatureoftoday’s businessenvironment,wewouldexpectmost corporatestobefacedwithafairlycomplex paymentslandscape.Aswewillseeinthenext section,thisisindeedthecase.

0% 20% 40% 60% 80% 100%

Which Regions Does Your Company Operate in?

North America (Canada/US/Mexico)

Africa

Latin & South America

Eastern Europe

Western Europe

China

89%

39%

51%

34%

35%

24%

Our Business Operates in this Many Countries:

34%

12%

7%

4%

3%

7% 33%

1 21-402-20 41-60

61-80 >10081-100



2 | The Payments Landscape for Corporates is Heavily Complex.

Therewereanumberofdatapointsilluminatedthrough the survey that pointed to the complexity of thecorporatepaymentslandscape.Forinstance,

•• 66%ofcorporatesoriginatepaymentswith threeormorebanks.

•• 23%with11ormorebanks.

•• 13%with21ormorebanks.

Similarly,63%ofcorporateswereoriginatingpaymentsinmorethanthreecurrencies,and40%in six or more currencies. As corporates conduct largeramountsofbusinessglobally,thereisaneedtoestablishbankrelationshipsandopenadditionalaccountstoservicenewregionsorcountries.Thesamecanbesaidwherecurrencyisconcerned,asbusiness activity in Europe or Asia necessitates the use of the euro or yen rather than the dollar. As more banksandbankaccountsmustbemanagedandnewcurrenciesandregulationscomeintoplay,the complexityfacedbycorporateswiththeirpaymentsoperationsgrows.

Another factor contributing to the complexity of thepaymentslandscapeisthesheerfrequencyofpaymentsthatarebeinggenerated.Forexample,

•• 52%ofcorporatesgenerate10,000ormore payments globally every month.

•• 25% generate one million or more every month.

•• Atthetopendofthespectrum,13%of corporatesweregeneratingmorethan10 million payments monthly.

Whentakingintoconsiderationthatthese paymentsaredisbursedbetweenavarietyofbanks andbankaccountsallovertheworldandina varietyofcurrencies,managingthesehighvolumes of payments is easier said than done.

0% 10% 20% 30% 40% 50% 60% 70% 80%

How Many Banks Do YouOriginate Payments With?

3+ Banks

11+ Banks

21+ Banks

66%

23%

13%

0% 10% 20% 30% 40% 50% 60% 70% 80%

3+ Currencies

11+ Currencies

21+ Currencies

63%

27%

16%

How Many CurrenciesDo You Make Payments In?



3 | AutomationandEfficiencyare Incredibly Important Corporate Drivers for Payables.

The complexity faced by corporates along the paymentsfronthaspromptedmanytolookformethodsofautomating,streamlining,andsimplifyingtheirpaymentsprocesses.Infact,ontheAccountsPayable(AP)side,52%ofcorporatesindicatedthattheautomationoftheAPprocessforefficiencyandproductivitywasthemostimportantdriver.Thisoptionwasselectedbyasignificantlygreaternumberofcorporatesthantheotheroptions,suchascost-savingsat25%,vendorrelationshipsat10%,andsecurityat9%.Withregardstothisautomation,61%of corporates indicated that invoice delivery/capture wasthemostimportantcomponent,alongwith57%for invoice approval and 49% for payment approval.

APhashistoricallybeenstuckwiththemonikerof“cost-center”inthepast,andresultantlyisnotalwaysprovidedwiththesamebudgetinglevelsasotherfinance-relateddepartments.Becauseofthis,many corporates that have implemented treasury managementsoftwareorothertechnologyforhandling treasury payments and cash management processes have not adopted the same level of automationforthepayablesprocess.However,therehasbeenagrowingmovementwithinthecorporaterealm that emphasizes the role of AP in generating valueforthefirm.ThishaspromptedmanyorganizationstobeginviewingAPasa“profit-center.”A pivotal component of this movement has centered around the automation of the AP payments process tomoreeffectivelymanageworkingcapitallevelsandtotakeadvantageofearlypaymentdiscountsorrebates. The complexity of the payments landscape hashelpedtodrivethismovementevenfurther,asthegloballydistributednatureofpartnersandclientele,coupledwithhighpaymentvolumes,necessitatestheuseofmoreautomated,streamlined,andefficientpayables systems.

0% 10% 20% 30% 40% 50% 60%

Corporate AP Drivers

Automation of the Process for Efficiency & Productivity

Invoice Delivery/ Capture

Invoice Approval

Payment Approval

Reconciliation

ACH, Card Payments

Cost-Savings

Vendor Relationship

Security

52%

25%

10%

9%

0% 10% 20% 30% 40% 50% 60% 70% 80%

AP Automation:Most Important Components

61%

57%

49%

43%

42%



4 | And the Most Preferred Corporate B2B Payment Method is…

TherewerefourspecifictypesofB2Bpaymentsthatcorporaterespondentswerepolledon:Check,ACH,Card(AP,Purchasing,etc.),andWire.Respondentswereaskedtwoquestionsregardingthesepaymenttypes:

•• Rankthefollowingpaymentmethodsfrom leastefficienttomostefficient,and

•• Rankthefollowingpaymentmethodsfrom least preferred to most preferred.

TheresultingspreadsawcorporatesasawholeviewingACHpaymentsasthemostefficientandmostpreferredB2Bpaymentmethod.Intotal,54%ofcorporatessawACHastheirmostpreferredmethod,and46%labeledACHasthemostefficientmethodofpayment.Ontheotherhand,corporaterespondentssawchecksasboththeleastefficientandleastpreferred method of B2B payments. Regarding efficiency,59%ofcorporatessawchecksastheleastefficient.Forpreferability,54%sawchecksasleastpreferred.WhilecheckshavehistoricallybeenthepredominantformofB2Bpaymentsforcorporates,theintroductionofelectronicpaymentmethodslikeACH,wire,andcardhavegraduallysurpassedchecksintermsofbothpreferabilityandefficiency.

0%

10%

20%

30%

40%

50%

60%

Check

1 = Least Preferred

4 = Most Preferred

Ranking = 2

Ranking = 3

ACH WireCard (AP Card, P-Card, Etc.)

54% 54%

22% 22%25%

30%

23%

27% 28%

40%

15% 15% 15%17%

9%

4%

Organization’s B2B Payment Methods(Rankings from 1=Least Preferred to 4=Most Preferred)

Corporate respondents as a whole viewed ACH as both the most

preferred and most efficient method of conducting B2B payments.

Conversely, checks were labeled as both the least preferred and least

efficient method of B2B payments.

80% of surveyed bank respondents indicated support of NACHA (ACH) as

a standard offering for payment origination



Atthispointintime,morethanhalfofcorporatesaremaking50%ormoreoftheirB2Bpaymentselectronically via ACH or card. We expect this number tocontinuerising,andthenumberofcorporatesusingchecksforB2BpaymentstocontinuedroppingconverselywiththeincreaseduseofACH,wire,andcard payments.

B2B Payment Preferences: Regional Trends Fordeeperanalysis,theresponsesregardingmostpreferredandmostefficientpaymenttypesweresplitintotwocategories;respondentsfromNorthAmericaandrespondentsfromEurope.NotabledifferencesbetweentheregionssawEuropefarmoredissatisfiedwiththeuseofchecks,with78%rankingitastheirleastpreferredmethodcomparedto47%ofNorthAmericanrespondents.Althoughbothregionssawchecksastheleastpreferredpaymentmethod,EuropeiswidelyconsideredtobeaheadofNorthAmericawiththeiradoptionofelectronicpayments,especiallygiventheprominenceofnetworkssuchasSWIFT,SEPA,andBacs.Thus,Europe’slowpreferabilityforphysicalpaymentmethodslikechecksmakessense.However,withNorthAmericancorporatesconstantlyincreasingtheiruseofelectronicpaymentmethods,thegrowingobsoletenessofchecksinthepaymentslandscapelookstobeconsistentacrosstheboard.

Regardingthemostpreferredpaymenttype,asurprisingfindingfromtheEMEA/U.S.breakoutwasthatACHrankedasthemostpreferredpaymentforbothNorthAmericanandEuropeanrespondentsabovewires,cards,andchecks.WhiletheuseofACHpaymentswouldonlyapplytoEuropeancorporatesthroughanyoperationstheyhaveintheUnitedStates,theirpreferenceforACHismostlikelycorrelatedwiththeiruseofBacs,SEPA,andotherfasterpaymentnetworksinEurope.However,EuropeanrespondentsdidsplitwiththeirNorthAmericancounterpartsregardingefficiency.ForEurope,wireswererankedasthemostefficientpaymentmethodandACHas2ndmostefficient,whileinNorthAmerica,respondentsrankedACHasthemostefficientandcardsasthe2ndmostefficient.

[North America] Your Organization's B2B Payment Method Rankings

52%

[EMEA] Your Organization's B2B Payment Method Rankings

0%

10%

20%

30%

40%

50%

60%

47%

58%

10%

20%

28%

17% 18%

5%

Check ACH Card (AP Card, P-Card, Etc.)

Wire

Least Preferred

Most Preferred

52%

0

10

20

30

40

50

60

70

80 78%

44%

6% 3%

16%13%

38%

3%

Check ACH Card (AP Card, P-Card, Etc.)

Wire

Least Preferred

Most Preferred



5 | Corporate Card Programs are on the Rise.

The use of cards has seen elevated adoption among thecorporatelandscape,especiallyincircumstanceswherehighlevelsofpaymentortransactionvolumesareoccurring.Inthesecases,usingcardscanreducethenumberofdaysinthepaymentcycle,cutbackonthenumberofinvoices/paperwork,andprovidemorevisibilityintocertaintypesofspend.Specifically,theuseofcardscanbeadvantageouswhentransactingfrequentlywiththesamevendor,frequentlypurchasingthesametypesofsuppliesormaterials,orforthesametypeofservice/activity(suchasT&Ecards).

Overall,thepercentageofcorporaterespondentswithcardprogramsinusewashigh.Regardingthespecifictypesofcardprogramscorporateshadinplace:

•• 43%wereusingpurchasingcards.

•• 37%wereusingTravel&Expense(T&E)cards.

•• 36%wereusingcorporateall-in-onecards.

•• 14%wereusingghostcards.

•• 13%wereusingvirtualcards.

•• 13%wereusingAPcards.

Corporate/Combined/

All-in-One Commercial Card AP/Payables

Card Virtual Card

Ghost CardP-CardT&E Card Unsure

What Card Programs Do You Have or Plan to Have in the Next Year?

0%

5%

10%

15%

20%

25%

30%

35%

40%

32% 32%

27%

39%

17% 17%20%

Overall, the percentage of corporate respondents with card programs in

place was high. Furthermore, 26% of corporates plan to spend more or significantly more on card programs

in 2017 compared to 2016.

51% of banks indicated that their clients either often or always leverage

the least costly payment method for B2B payables.



While the use of card programs is already commonplaceamongmanycorporategroups,datapointstoasignificantriseininvestmentforcorporate card programs over the next year. When polled on their spend plans for card programs in 2017 comparedto2016,26%ofcorporatesindicatedanintenttospendmoreorsignificantlymore,comparedto just 5% planning to spend less.

Ascorporatecardprogramsgainmomentum,onemajorfactorthatwillcontributeheavilytotheirsuccesswillbethewillingnessorabilityofvendorsto accept cards as a viable payment option. While cardsmaynotbemostvendors’idealchoiceofpayment,dataobtainedthroughthesurveyshowsthat,asawhole,thelevelofvendoradoptionforvarious corporate card programs is very promising. Whenaskedabouttheirsatisfactionregardingthelevelofvendoradoptionforvariouscardprograms,thepercentageofsatisfiedorverysatisfiedcorporaterespondentsrangedfromalowof51%forghostcardstoahighof76%forvirtualcards.Conversely,thepercentageofcorporatesdissatisfiedwithvendoradoption for their card programs ranged from a lowof1%forT&Ecardstoahighof15%forAPcards.Viewingthisdatainaggregate,corporatesarewell-positionedtoincreasetheuseoftheircardprograms,especiallythroughinteractionswiththeirvendors,andareclearlygearinguptodosooverthecourse of the next year.

0% 10% 20% 30% 40% 50% 60%

How Satisfied Are You With the Level of Vendor Adoption for:

51%

30%

11%

7%

P-Cards

Ghost Cards

Very Satisfied/Satisfied

Neutral

Dissatisfied/ Very Dissatisfied

N/A

0% 10% 20% 30% 40% 50% 60%

54%

23%

15%

8%


Neutral


N/A

0% 10% 20% 30% 40% 50% 60%

59%

28%

3%

9%


Neutral


N/A

AP CardsExpectations for Spending on All Card Programs in 2017 vs 2016

0% 5% 10%-5% 15% 20% 25%

Significantly More

More

Significantly Less

Less 3% 21%

2% 5%



6 | Payment Security is a Major Concern for Most Corporates.

Ascorporatesbattlecomplexitywithinthepaymentslandscape,anotherstruggleisoccurringalongthesecurityfrontierascriminalsseektodefraudcompanies out of thousands if not millions of dollars. This fraudulent activity has begun to increasingly targetthepaymentsprocess,ascriminalsrealizethat money in motion represents a major exposure pointformostcorporates.Infact,datafromtheStrategic Treasurer and Bottomline 2017 Treasury Fraud and Controls survey found that 65% of organizationshadexperiencedpaymentfraudwithinthepast12months;a9%jumpfromthepreviousyear.AspartofourB2Bsurvey,wefoundthat16%ofcorporates had experienced losses from fraud on B2B paymentswithinthepastyear,withanadditional29%experiencing serious but unsuccessful fraud attempts.

The magnitude of this fraud activity has had a clear effectoncorporates,as46%ofcorporatesindicatedthat their payment security concerns are either higher orsignificantlyhigherthanlastyear,comparedtojust2%whohavelowersecurityconcerns.Furthermore,security-relatedconcernshadeitherastrongorverystronginfluenceontheplannedtechnologyspendfor61% of corporate respondents. With fraud continuing tohaveaverystronginfluenceontheprioritiesandconcernsofcorporates,weexpectpaymentsecurityto continue being an area of increased spend and emphasisforcorporatesastheyseektoprotectthemselves from future losses. This is a reality that mustbeidentifiedbybanksandfinancialtechnologyprovidersthatofferpaymentsolutionsandservices,assecuritynowranksasoneofthemostimportantfactorsforcorporateslookingtoadoptnewpaymentsolutions.

0% 5% 10% 15% 20% 25% 30%

Corporate Fraud Experience in the Past Year

29%

16%

0% 10% 20% 30% 40% 50%

Current Payment Security Concerns

2%

46%

Experienced Serious But Unsuccessful Fraud Attempts

Experienced Losses

0% 10% 20% 30% 40% 50% 60% 70% 80%

Security Concerns Influenceon Current/Planned Technology Spend

61%

4%

Strong or Very Strong Influence

None or Limited Influence

Lower Security Concerns

Higher/Significantly Higher Security Concerns



7 | Payables have Become a Major InfluenceonCorporateBanking Relationships.

Asthepaymentslandscapetakesongreaterimportancewithinthecorporaterealm,weareseeingashiftincorporateprioritieswhenevaluatingtheirbankrelationships.Thatis,whilecreditandprovidingaccess to capital have long been the driving force behindcorporatebankingrelationships,moreandmore corporates are beginning to place emphasis ontheirbanks’paymentservices.Whenaskedhowimportantabank’sB2Bpayablesofferingswereaspartoftheselectionprocess,33%ofcorporateslabeled it as a very important factor and 12% as an extremelyimportantfactor.Intotal,45%ofcorporatessawB2Bpayablesasaveryorextremelyimportantfactorinthebankselectionprocesscomparedtojust10%ofcorporatesthatsawpayablesasunimportant.

Thisdataisontrackwithresultsobtainedthroughother Strategic Treasurer surveys that have seen payments playing an increasing role in corporate bankingrelationships.Aspaymentcomplexityincreases,corporatesarerealizingtheimportanceofrobust,efficientpaymentstechnologyandastreamlined and secure payments process. For example,justafewyearsago,onlyaselectfewbankswereofferingmobilebankingapplicationsfortheirclients.Today,almosteverybankhasamobilebankingapp,and55%ofcorporatesseemobilebankingapplicationsasimportantorveryimportantbankingservices.Thesetypesoffunctionalitieshaveadirectinfluenceonthebankrelationshipsselectedbymanycorporates,totheextentthatcorporatesmayevenendupselectingabankbasedonthestrengthoftheir payments and payables services. This is forcing bankstomaintainupdatedB2Bpaymentstechnologyin order to stay competitive.

Unimportant

Slightly Important

Very Important

Extremely Important

Unsure

How Important are B2B Payables Offerings When it Comes

to Selecting a Bank?

0% 5% 10% 15% 20% 25% 30% 35%

12%

11%

33%

34%

10%

Yes, Very Important/Important

No, Not Important

I Don’t Know

Is it Important to You That Your Bank(s) Invest in Commercial/

Corporate Banking Applications For Mobile Devices?

0% 10% 20% 30% 40% 50% 60%

55%

33%

12%



8 | CorporatesIncreasinglyLook toNon-BankProvidersfor B2B Payments.

1in5corporatescurrentlyuseanon-bankproviderforB2Bpayments.Onasimilarnote,22%ofcorporatesindicatedtheywouldbewillingtouseafinancialtechnologyproviders’paymentplatformfor B2B payments. As the importance placed upon paymentsgrowsinthecorporateenvironment,corporatesareincreasinglyturningtofinancialtechnology providers to meet their payment technologyneeds.Withinthepastdecade,non-bankproviders have burst onto the scene in a number of keymarketsegmentsthathavetraditionallybeendominatedbybanks.Theseincludethepaymentsrealmandthesupplychainfinancelandscape,wherefinancialtechnologycompaniesaregarneringanincreasingmarketsharethroughtheprovisionofinnovative,oftenSaaS-basedtechnology.

Forpayments,financialtechnologyproviderscannottakeoverdirectbankingservices.Instead,theseprovidersserveasthemiddlemanbetweenacorporateandtheirbanks,andhandleallincomingand outgoing payments and reporting functionality. Thebenefithereisthatcorporatescanuseasingleportalforviewingandmanagingtheirpaymentactivity,ratherthanhavingtogothroughdifferentportalsforeachoftheirbankpartners.Withthehigh volumes of payments being generated through multiplebanks,itmakessenseforcorporatestosimplify their payment operations through the use of a central payments platform. As complexity in thepaymentslandscapepersists,weexpectfurthermigrationalongthisfronttowardstheadoptionoffinancialtechnologyproviders’paymentsolutions.

Do You Use a Non-Bank Provider for B2B Payments?

69%

11%

20%

Unsure NoYes

Within the past several decades, financial technology providers have burst onto the scene in a number of

key market segments that have traditionally been

dominated by banks.



9 | MostCorporatesareSatisfied with the Payment Services ProvidedbytheirBanks.

Whilesomecorporatesarelookingtoadoptfinancialtechnologyproviders’paymentsolutionstoreducetheirpaymentscomplexity,mostorganizationsarecontentwiththelevelofpaymentsfunctionalitytheyarecurrentlyreceivingfromtheirbankingpartners.Whenaskedhowwelltheirbanks’B2Bpayablesofferingsaddressedtheirneeds,41%ofcorporatessaidveryorextremelywell,comparedtojust7%ofcorporateswhosaidpoorly.Anadditional41%indicatedtheirbankadequatelyaddressedtheirB2Bpayablesneeds.Furthermore,5xmorecorporatesbelievedtheirbankswereinvestingininnovative B2B payables offerings compared to those thatthoughttheyweren’t.

Inanalyzingregionaltrends,Europeappearstobemoredissatisfiedwiththeirbanks’performancethanNorthAmerica. 3x more European corporate respondents didnotbelievetheirbankswereinvestingininnovativeB2BpayablesofferingscomparedtoNorthAmericancorporates,andnearly4xmoreEuropeancorporatesindicatedtheirbanks’B2Bpayablesofferingspoorlyorverypoorlyaddressedtheirneeds.However,bothregionsasawholewerestillstronglypositiveregardingtheirbanks’performanceintheB2Bpayableslandscape.

Given the intense scrutiny placed upon the payments landscape,thefactthatmostbanksaremeetingtheirclients’expectationsinthepayablesarenaisapositivesign.Inthepast,wehavewitnessedadisconnectbetweencorporatesandbanksregardingwhichpaymenttechnologiestopursueandwhichpaymentservicesweremostimportant.Thisdisconnectalsowasapparentwhenviewingwhatbanksthoughttheircorporateclients’toppaymentprioritieswerecomparedtowhatcorporatesactuallylabeledastheirtoppriorities.However,thatdoesnotseemtobethecasehere,where,despiteacomplexpaymentslandscape,mostcorporatesarehappywiththeirbanks’B2Bpayablesservices. Given the emphasis that corporates are placingonpaymentswhenselectingabankingpartner,itappearsthatbankshaverisentothechallengeandaremakingsuretobuildouttheirpaymentsofferingstomeet client demands and expectations.

0% 10% 20% 30% 40% 50%

How Well do Your Bank’s B2B Payables Offerings Address

Your Needs?

7%

11%

41%

41%

0% 10% 20% 30% 40% 50%

Do You Believe Your Bank(s) are Investing in Innovative B2B

Payables Offerings?

9%

46%

Poorly/Very Poorly

No

Yes

Adequately

Very/Extremely Well

N/A

6x more corporates indicated their banks were addressing their B2B payables needs well or very well versus those whose needs were

poorly addressed.



10 | B2BandWorkingCapital Spend Plans.

Regardingcorporaterespondents’overallspendplans,50%ofcorporateswereplanningtospendmorethan$50,000onpaymentstechnologyinthenextyear,and28%wereplanningtospendmorethan$250,000.Thesespendplanswerebeinginfluencedbyseveralfactors.Forinstance,61%ofcorporatesindicated that security concerns had a strong or very stronginfluenceontheirspendlevels.With72%ofcorporatesconcernedaboutexternalsystemhacksand61%worriedoverthethreatofsocialengineeringfraudlikebusinessemailcompromise(BEC)schemes,the emphasis currently being placed by corporates on securitywillplayacrucialroleintechnologyspend,especiallywithpayments.

Additionally,26%ofcorporateswereplanningtoincrease their spend levels on card programs over the nextyear,comparedtojust5%decreasingspending.With electronic payment programs beginning to replacechecksandothermoremanual/physicalpaymentforms,cardsareplayinganincreasedroleinthe B2B payments landscape and are seeing steady adoption.

Finally,theareaoffasterpaymentsingenerallookstoseeimmensegrowthoverthenextseveralyears.48%ofcorporatesindicatedtheywerealreadyusingsame-daypayments.Ofthosethatwerenotusingsame-daypayments,31%indicatedtheyareinterested.Whenaskedforwhichareastheywouldbeinterestedinadoptingsame-daypayments,57%indicatedAP/B2Bpayments,56%asanalternativetowiretransfers,and55%foremergencypayments.46%alsoindicatedinterestinusingsame-daypaymentsforcashconcentrationactivity,and43%forpayroll.

$1M+ (Equivalent)

$500K - $1M (Equivalent)

$250K - $500K (Equivalent)



<$50K (Equivalent)

Payments Technology Spend Plans for the Next Year(Excludes Staff Costs & Consumer

Card Payments)

0% 5% 10% 15% 20%

8%

6%

9%

14%

13%

18%

The spend plans of corporate respondents for payments technology

focused primarily on payments security, increased use of card

programs, and the adoption of various faster

payments services.



FINAL THOUGHTS Thepaymentslandscapefacedbycorporatesandbankstodayis heavily complex. Factors such as continuous economic globalization,increasedfraudactivity,andhighpaymentvolumes are causing many corporates to restructure their paymentprocesses.Overthenextseveralyears,continueddevelopments along the faster payments and payments securityfrontswillallowthemarkettoadoptmoreefficientandsecure payment practices.

Ascorporateslooktoupdatetheirpaymentstechnology,theuseofACHpaymentslookstobethemostpreferredmethod,whileasignificantportionofcorporatesarealsolookingtoincreasetheirinvolvementwithcardprograms.Whileoverhalfofcorporaterespondentswerealreadysending50%+oftheirpaymentselectronically,thisnumberwillonlyincrease.Conversely,itisexpectedthattheuseofchecksforB2Bpaymentswilldecreaseasmoreefficientformsofpaymentsincreasinglydominatethelandscape.Atthesametime,corporate payment practices such as participating in discount orrebateprogramsareexpectedtoincrease,whilethepractices of delaying payments and pushing lengthier payment terms onto vendors should see reduced use.

Ascorporateslooktoenhancetheirpaymentprocesses,asignificantnumberareturningtowardstheuseoffinancialtechnology payment solutions that aid in simplifying and streamliningtheirbankrelationships.Thesesolutionsprovidea central platform for managing payment activity and maintainingvisibilityacrossallbanksandpaymentchannels.However,theincreasedadoptionoffinancialtechnologysolutionsisnotduetodissatisfactionwithbanks.Infact,mostcorporatesarecomfortablewiththeservicetheyreceivefromtheirbanks,andareonlyusingfinancialtechnologyplatformsasanaddedlayerofautomationandforstraight-through-pro-cessing(STP)withtheirinternalsystems.

Aspaymentcomplexitycontinuestoposeasignificantproblemforcorporates,itisexpectedthatthenumberofcorporatesusingfinancialtechnologypaymentsolutionsorother3rdpartysystemsformanagingpaymentswillcontinuetoincrease.However,banksareacriticalpieceofthepuzzle,providing insight and advice to their corporate clients and often leadingthewaywithR&Dalongthepaymentsfront.Movingforward,banks,financialtechnologyproviders,andtheircorporateclientsmustworktogethertoreducethecomplexitythatisboggingdownthepaymentslandscape.

Factors such as continuous economic globalization, increased fraud

activity, and high payment volumes are causing many corporates to

restructure their payment processess.

While over half of corporate respondents are already generating

more than 50% of their B2B payments electronically, we expect this number

to continue increasing conversely with a drop in the use of checks.

Moving forward, banks, financial technology providers, and their

corporate clients must work together to reduce the complexity

that is bogging down the payments landscape.



ABOUT THE ORGANIZATIONSBank of America Merrill LynchBankofAmericaMerrillLynchoffersintegratedfinancialguidanceandsolutionstosmallandmid-sizedbusinesses,municipalitiesandgovernmentagenciesintheU.S.andlargecorporateclientsaroundtheworld.Wearealeadingproviderofcardsolutions,workingwithclientstounderstandtheiruniquepayments processes and deliver integrated electronic solutions designedtoincreaseefficiency,visibilityandcontrol.Weoffercard technologies that deliver easier and faster access to consolidatedglobaldata,andproductstotargetandincreasesupplieracceptanceandbenefits,helpingclientsreducecosts,increaseworkingcapitalandimproveprocessefficiencies.

Bottomline TechnologiesBottomlineTechnologies(NASDAQ:EPAY)helpsbusinessespayandgetpaid.BusinessesandbanksrelyonBottomlinefordomesticandinternationalpayments,effectivecashmanagementtools,automatedworkflowsforpaymentprocessingandbillreviewandstateoftheartfrauddetection,behavioral analytics and regulatory compliance. More than 10,000corporations,financialinstitutions,andbanksbenefitfromBottomlinesolutions.HeadquarteredinPortsmouth,NewHampshire,wedelightourcustomersthroughofficesacrosstheUnitedStates,Europe,andAsia-Pacific.

Strategic TreasurerSince2004,StrategicTreasurerhashelpedhundredsofcorporateclientsfacerealworldtreasuryissues.Ourteamofseniorconsultantsiscomprisedofformerpractitionerswithactualcorporatetreasuryexperiencewhohave“hoppedthedesk”tosupporttheirformerpeersfromtheconsultingside.StrategicTreasurerconsultantsareknownnotonlyfortheirexpertiseinthetreasuryspace,butalsofortheirresponsivenesstoclientissues,thoroughfollow-throughoneachproject,andgenerallikabilityastemporaryteammembersofyourstaff.

Ourfocusasafirmcentersonmaintainingtrueexpertiseinthetreasuryspace.Throughconstantlyrefreshingourknowledgeandintentionallylearningaboutleadingsolutions,weensurethatour understanding is both global in scope and rich in detail.

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2017 B2B Payments + WCM Strategies Survey Report · 2019. 5. 23. · 2017 B2B PAYMENTS + WCM...

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Transcript of 2017 B2B Payments + WCM Strategies Survey Report · 2019. 5. 23. · 2017 B2B PAYMENTS + WCM...