2017 b2b payments + wcm strategies survey report · 2019. 5. 23. · 2017 b2b payments + wcm...
TRANSCRIPT
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
© 2017 Strategic Treasurer. All rights reserved. 3
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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.
© 2017 Strategic Treasurer. All rights reserved. 4
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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.
© 2017 Strategic Treasurer. All rights reserved. 5
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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.
© 2017 Strategic Treasurer. All rights reserved. 6
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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.
© 2017 Strategic Treasurer. All rights reserved. 7
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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.
© 2017 Strategic Treasurer. All rights reserved. 8
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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
© 2017 Strategic Treasurer. All rights reserved. 9
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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?
© 2017 Strategic Treasurer. All rights reserved. 10
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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%
© 2017 Strategic Treasurer. All rights reserved. 11
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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
© 2017 Strategic Treasurer. All rights reserved. 12
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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
© 2017 Strategic Treasurer. All rights reserved. 13
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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.
© 2017 Strategic Treasurer. All rights reserved. 14
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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%
Very Satisfied/Satisfied
Neutral
Dissatisfied/ Very Dissatisfied
N/A
0% 10% 20% 30% 40% 50% 60%
59%
28%
3%
9%
Very Satisfied/Satisfied
Neutral
Dissatisfied/ Very Dissatisfied
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%
© 2017 Strategic Treasurer. All rights reserved. 15
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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
© 2017 Strategic Treasurer. All rights reserved. 16
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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%
© 2017 Strategic Treasurer. All rights reserved. 17
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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.
© 2017 Strategic Treasurer. All rights reserved. 18
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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.
© 2017 Strategic Treasurer. All rights reserved. 19
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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)
$100K - $250K (Equivalent)
$50K - $100K (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.
© 2017 Strategic Treasurer. All rights reserved. 20
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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.
© 2017 Strategic Treasurer. All rights reserved. 21
2017 B2B PAYMENTS + WCM STRATEGIES SURVEY REPORT
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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