spotlight on payment factories
TRANSCRIPT
Spotlight on Payment Factories
John Farrell Senior Vice President, Financial Services Nasreen Quibria Payments Subject Matter Expert
© Logica 2012. All rights reserved No. 2
US Economic Landscape
Survey Methodology
Logica Findings
Key Takeaways
Logica Resources
Questions?
Agenda
© Logica 2012. All rights reserved No. 3
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
IV I II III IV I II III IV I II III IV I II III
2007 2008 2009 2010 2011
US Economic Landscape P
erc
en
t C
han
ge in
Re
al G
ross
Do
me
stic
Pro
du
ct
SOURCE: US Bureau of Economic Analysis, National Bureau of Economic Research
Great Recession December 2007 – June 2009
2012
?
No. 4 © Logica 2012. All rights reserved
Company Size* Job Titles
Survey of 157 companies In North America and Europe
*2% No Response
7%
38% 53%
Midsize ($25 million to $1 billion)
Large $1 billion and over)
Small (less than
$25 million)
Survey Profile
27%
36%
14%
6%
8%
4% 5%
Managing Director Other
C-Level Manager
Staff Employee
Director
Treasurer / Assistant
Treasurer / Controller
No. 5 © Logica 2012. All rights reserved
Survey Profile – Industry Type
3%
6%
6%
9%
10%
13%
13%
17%
22%
0% 5% 10% 15% 20% 25%
Transportation
Healthcare (including Pharmaceutical, Biotech)
Government/Public Sector
Business Services/Consulting
Retail (including Wholesale/Distribution)
Energy and Utilities
Other
Banking / Financial Services / Insurance
Manufacturing
*1% No Response
No. 6 © Logica 2012. All rights reserved
Driving Forces for a Payment Factory
4%
11%
25%
24%
36%
3%
6%
24%
29%
38%
0% 10% 20% 30% 40% 50%
Other
Consolidation of banking relationships / Reduction of bank accounts
Improve transparency and reduce risk e.g., fraud, payment errors
Improve visibility into cash (internal business operations and external financial value chain)
Reduce internal costs
North America Europe
No. 7 © Logica 2012. All rights reserved
Catalysts Based on Company Size*
6%
35%
18%
18%
24%
2%
14%
41%
21%
21%
3%
21%
19%
22%
34%
0% 10% 20% 30% 40% 50%
Other
Improve transparency and reduce risk e.g., fraud, payment errors
Consolidation of banking relationships / Reduction of bank accounts
Improve visibility into cash (internal business
operations and external financial value chain)
Reduce internal costs
Large Midsize Small
No. 8 © Logica 2012. All rights reserved
Implementation Stage
40%
15%
7% 3% 2%
32%
2%
29%
14%
9% 4% 0%
45%
0%
36%
15%
8%
3% 1%
36%
1%
0%
10%
20%
30%
40%
50%
North America Europe Total
Business Case in
Live Under Consideration
In Implementation
Stage
Selection Process of
Consultants and/or
Solution Providers
No Plans Considered and
Development Rejected
38% 62%
Source: Logica, December 2011
No. 9 © Logica 2012. All rights reserved
Implementation Model
62%
13% 10% 8% 8%
77%
12% 9%
0% 5%
66%
9% 9% 6% 7%
0%
10%
30%
50%
70%
90%
Plan to
implement
system in - house
Outsource to a
payment
processor
Undecided Outsource to
our bankers
Other
North America Europe Total
No. 10 © Logica 2012. All rights reserved
44%
34%
13% 10%
55%
31%
7% 7%
47%
33%
11% 9%
0%
10%
20%
30%
40%
50%
60%
Important Very important Not relevant Not important
North America Europe Total
Counterparty Risk - Importance of De-Risking the Supply Chain
11%
39%
50%
8%
33%
59%
0% 20% 40% 60%
Not important
Very important
Important
No. 11 © Logica 2012. All rights reserved
47%
28%
18% 7% 0%
66%
11% 13% 7% 4%
54%
22% 16%
7% 1%
0%
20%
40%
60%
80%
Good – our bankers seem to
have a good
understanding of our issues
Excellent – we fully trust our bankers
to advise us on this
issue
Average – they understand some
of our issues
We don't consult our bankers
Poor – they don’t seem to
understand what
we need
North America Europe Total
Rate Banks
No. 12 © Logica 2012. All rights reserved
Rate Banks by Company Size
18%
9%
73%
7%
17%
51%
25%
5%
2%
17%
54%
22%
0% 20% 40% 60% 80%
We don't consult our bankers
Poor – they don’t seem to understand what we need
Average – they understand some of our issues
Good – our bankers seem to have a good understanding of our issues
Excellent – we fully trust our bankers to advise us on this issue
Large Midsize Small
No. 13 © Logica 2012. All rights reserved
View of Single Euro Payments Area (SEPA)
Opportunity for
business benefits
Unsure what it means for our
business
Seen as a burden or cost
with little or no
benefit
Not relevant to our business
13%
43%
32%
13%
Can SEPA provide competitive advantage?
No. 14 © Logica 2012. All rights reserved
Opportunity for
6%
68%
17%
9%
View of Same Day ACH
business
benefits e.g.,
improve cash
flow
Unsure what it
means for our
business
Seen as a burden or cost with little or no
benefit
Not relevant to
our business
No. 15 © Logica 2012. All rights reserved
Not relevant to our business
56%
Business case
development
17%
Live
In implementation
stage Review /Selection
process of technology providers
11%
14%
36%
39%
0% 10% 20% 30% 40%
Business case in
Review / Selection process of technology providers
In implementation stage
Live
development
in
16%
5% 6%
International ACH Transaction (IAT)
No. 16 © Logica 2012. All rights reserved
Key Takeaways
Educate and advise your corporate customers - Help them with their choice of transaction banking partner
Provide a clear message
Engage and educate your key internal stakeholders
Provide value add - Structure optimal combination of payment and collection instruments; offer choices of new payment channels and services
No. 17 © Logica 2012. All rights reserved
Logica Resources
http://www.logica.us/we-are-logica/media-centre/brochures/2011/payments-have-advanced/ Logica All Payments Solution (LAPS)
Related Products
http://www.logica.us/we-work-in/financial-services/related-media/articles/2012/recent-financial-services-perspectives-from-logica/ Payments Factory
Same Day ACH
Thought Leadership
No. 18 © Logica 2012. All rights reserved
Thank You…
John Farrell – Senior Vice President, Financial Services
781.373.8545
Nasreen Quibria – Payments Subject Matter Expert
781.373.8554